What is economic sustainability?
Economic sustainability is a way of thinking. It includes putting in place practices that support long-term economic growth without having negative impacts on social, environmental, and cultural aspects. We can relate this to the “recycling resources” plan whose target is to recycle and then reproduce all the materials that have been used by people, using the notion of a Circular Economy – a system that makes all products anew, ‘x’ times as functional and effective.
Economic sustainability does not simply refer to gross national product, exchange rates, inflation, and profit, but it relates to the production, distribution, and consumption of goods and services (Mohamed and Antia, 1998). However, the movement and transfer of goods and services have a noteworthy effect on environmental ecosystems because those ecosystems are the source of unmanufactured or unused materials and the stockrooms for rejected goods.
Organizations and sustainable development (SusDev)
Short financial gains have been the motivation behind much of the un-SusDev that has happened. Organizations will adopt SusDev concepts if it is demonstrated that sustainable solutions are not costly. To evaluate SusDev, we must consider the economic losses due to the reduction and degradation of the environmental ecosystem used and develop a plan to mitigate both short-term and long-term environmental impacts. Traditional decision-making analyses account for only the costs and benefits of resource exploitation and do not consider the inherent cost of the environmental degradation of air, water, or soil, nor do they consider the cost of discarding an item after the end of its useful life, which includes that of the remediation a society has to incur, which limits its financial resources (United Nations et al., 2003). Once a shift has occurred in economic cost-benefit analyses that would account for environmental costs, SusDev would be recognized to be of more economical benefits than current solutions and designs (Paleologos, 2008).
SusDev and the protection of the environment
In view of Principle 4 of the Rio Declaration and Development, environmental protection is an essential part of the SusDev process. This is unlike out-of-date models that first emphasize the financial aspects of the project and then develop remedial measures to the resultant environmental problems. Such a process is shown in Fig. 1.2 (Mohamed and Antia, 1998), in which “(1) the ambient physical environment, ecosystem, and natural resources represent the natural system (NatSys), and (2) the features of production of goods and services represent the economic system (EcoSys).” As a result, the typical use of the NatSys by the EcoSys would lead to a substantial reduction in natural resources and an upsurge in environmental problems and associated costs, such as air pollution, surface water, and groundwater pollution, marine and ecosystems pollution, the generation of solid and liquid waste, and above all, greenhouse gas and global warming. The resultant impacts on the NatSys would vary as a result of the geographical location; the existing environmental status involves the natural environment and the current economy.
From Mohamed, A.M.O., Paleologos, E.K., 2018. Foundations of Geo-Environmental Engineering – Basic Soil Properties of Relevance to Different Remedial Techniques, Elsevier, New York, NY, ISBN: 978-0-12-804830-6, pp. 688; Mohamed, A.M.O., Antia, H.E., 1998. Geoenvironmental Engineering. Elsevier, Amsterdam, The Netherlands, pp. 707.
Re-defining Economics Sustainability (EcoSus)
In addition, as noted by Goodland and Daly (1995), EcoSus involves the consumption of interest rather than capital and is defined as the amount one consumes during a period and still be as well off at the end of the period. Notably, the preceding description focused only on man-made capital; however, it could be extended to include the natural capital. Therefore, by integrating the economy with the environment, the EcoSus could be redefined (Mohamed and Antia, 1998) as the maintenance of capital in general, both man-made and natural. The word “environment” currently means integration of the environmental system with the economic system in which current economic principles apply. Researchers are adopting environmental values that are external to the classic economic system and developing innovative methods to account for monetary values on intangible non-market (and non-marketable) components of the environment.