The environmental sciences have documented some of the most worrisome earth changes in the climate, loss of biodiversity, change in nutrient cycle, and depletion of the natural resources. These environmental changes have brought negative consequences for the future of human society and overall life on earth. It raises the question if our lifestyle and global civilization growth is in the “sustainable” direction or are we consuming “a lot” by depleting the natural resources and causing an imbalance in nature.
It is recorded that the economic activities and decisions have increased the negative impact on the environment that has finite resources – from major demographic changes to urbanization. Also, some people are consuming too little. Nearly 10% of the planet’s total population lives in extreme poverty with millions being malnourished. This unequal distribution of resources calls has further caused a threat to sustainable development and calls for the immediate development of economic policies.
Role of economics in sustainable development
The discipline of economics plays a significant role in meeting the sustainable development challenge. The important question with ecological economics is how to allocate the scarce resources to the current generation to meet the desired goals, without depleting resources for the future generations.
This is because economics primarily focuses on the production, distribution and consumption of food, housing and other requirements. Here, we understand that economics, combined with the concepts of environmental sciences and business is crucial to understand how can it be possible to create a shift in consumerism and research in sustainable development.
Understanding the correlation between environment and economic concepts
Land, water and natural resources are the most important input for production. These resources frequently change from country to country. Natural resources for economic activities are either renewable or non-renewable – this distinction is important to know as it influences the way the resources are managed. The inputs from the environment are processed and used in the manufacturing sector to develop products and services for customers.
The health of the environment also impacts businesses in many ways
Since businesses are the backbone for any economy, economic policies of the particular region would also impact the way businesses are carried. As climate changes continue to get worse, the costs are only meant to go up. This also includes the cost of doing the business. When the environmental issues become quite urgent, all the businesses suffer.
The rising sea level and changing climate are threatening the business as usual. The demographic shift due to climate change has made it increasingly difficult for businesses to locate the demographics.
The shift in the food supplies
Agriculture and fisheries also see a massive shift and heavily depend on climatic conditions. The warming of the sea is bringing a shift in the ocean ecosystem. If you have a food-based business, climate change can bring changes in the price or the food menu, which can make it more difficult for you to manage your supplies.
Climate change also affects the crops in the area and the quality of produce. Shortage of food supply and resources can also disrupt the businesses that are dependent on it. It is recorded that in the next few decades, global warming will harm crops and livestock. The farmers will be forced to either adjust to the changing weather conditions or change the way the crops are grown.
The first two points indicate that with the change in environment, there will be an increase in the cost of food and goods. This will also cause inflation, which will also affect the other sectors and aspects of the economy.
The choice is not to sacrifice one for another, but to make the economy work to safeguard the environment and work for the environment to safeguard the economy.
There is huge uncertainty about climate change and its impact on the economy. With businesses unable (and unwilling) to reduce greenhouse gases, the future of society remains uncertain. The type, timing, and magnitude of changes due to global warming will make it difficult for businesses and the economy to predict and prepare for the future.
Civil unrest is likely to increase with the growing urgency of climate change. The compounding seal level rise with changing temperatures, draughts and new diseases are most likely to disrupt businesses as usual. The businesses would either face physical destruction or get affected by disruption in other businesses and the economy in general as everything is intertwined. The global environmental crisis will trigger fear, uncertainty and change the survival instincts.
How does ecological economics save businesses?
The above problems can only be solved if there is a better harmony between the economy and the environment. This urgency has resulted in focused specializations of economics like ecological economics, which specifically focuses on economic research that’s based on sustainable development.
- Ecological economics includes a concept of ecological footprint that measures the environmental impact of business and individual actions on the economy. This can be useful for businesses to measure their impact on the environment.
- Since it is an application-oriented specialization, it looks into practical aspects of the economic processes that are discussed in the research.
- It looks into different management systems of the businesses and other economic activities that affect the environment and suggests measurable actions that can help quantify and solve a specific environmental problem.
Part of the motivation for ecological economics was dissatisfaction with the shallowness of sustainability and resource economics. These techniques apply to normal economics to environmental issues. They do so without taking into account crucial environmental issues about inputs, outcomes, and pollution.