Growth has, for a long time, been seen as a crucial enabler in fighting poverty and the social injustices that come with it. In order to achieve the Millennium Development Goals (MDGs), the desired growth pattern was set to be sustained, inclusive and equitable. However, when looking at the post-2015 era and the Sustainable Development Goals (SDGs), Mr. Pingfan Hong, Director of UN DESA’s Development Policy and Analysis Division, saw the need for a new kind of growth pattern where sustained growth has to be replaced by sustainable growth, whereby the value of the environment is fully considered.
The sustained, inclusive and equitable growth pattern has been an effective path towards reaching the MDGs. During the MDG era, 700 million people were freed from extreme poverty. Hunger was reduced, access to healthcare was improved, more people were afforded primary education and there was an increase in the political participation of women.
In a Development Policy Seminar on 11 February, Mr. Hong presented his analysis of growth patterns and their role in the transition from MDGs to SDGs. He explained that while the strife for equitable and inclusive growth still will be effective in the SDGs era, the concept of sustained growth will not be sufficient in reaching the objectives.
“From the lens of sustainable development, a horizon of two or three decades is myopia,” Mr. Hong said, referring to the shortsightedness of a sustained growth pattern and its impact on the environment as well as some economies.
“The current pattern of growth in the world economy is not sustainable”
Director of UN DESA’s Development Policy and Analysis Division
“The current pattern of growth in the world economy is not sustainable. For instance GDP per capita growth has been closely associated with increase in carbon dioxide emission.”
Mr. Hong also explained how in some countries, the cost of environmental damage is contracting the GDPs of many developing countries, so that the aim to reduce poverty with a sustained economic growth actually becomes counterproductive.
“The environmental toll in many developing countries has reached three to ten percent of their GDP. So, if the economy grows less than three percent in developing countries, there is no gain, if you take into account the cost of the environment.”
In Mr. Hong’s view, the desired growth pattern must change from sustained into sustainable. “Sustainable growth means that growth still needs to be robust and stable but this growth should not compromise environmental sustainability.”
In the seminar, Mr. Hong presented some important steps in transforming sustained growth into sustainable growth. “The first important thing is to count the full value of the environment in the measurement of the national wealth. We have to include the true value of the environment.”
Mr. Hong suggested mainstreaming SEEA (System of Environmental-Economic Accounting) a multipurpose conceptual framework for understanding the interactions between the environment and the economy. He also stressed the need for governmental action in acknowledging environmental costs, in order to change the behavior of businesses and consumers.
“Markets alone cannot price environmental goods and services properly because environmental goods and services have the nature of public goods and high degree of externality. It is up to the government to use taxes and regulations to get the prices of environmental goods and services right so that the businesses and consumers will take these prices into account in their decision-making. Change their behavior and change an unsustainable pattern of production and consumption.”