8.2 Definition and general nature of environmental sustainability

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8OPTION 4: Economics and the environment

UNIT 2 AREA OF STUDY 2 Applied economic analysis of local, national and international economic issues OPTION 4: Economics and the environment OUTCOME 2 Explain the factors that affect two economic issues at a local, national and international level and evaluate actions to address the issues. LEARNING SEQUENCE 8.1 Overview ......................................................................................................................................................................2 8.2 Definition and general nature of environmental sustainability .................................................................4 8.3 Measures of the environmental sustainability of economic activity ......................................................7 8.4 The reasons why environmental sustainability is of importance to Australia and globally ........20 8.5 The economic factors influencing the extent of environmental sustainability ................................24 8.6 Different perspectives about the issue of environmental sustainability ............................................31 8.7 The responses by economic agents to improve environmental sustainability ...............................36 8.8 Review ........................................................................................................................................................................47 UNCORRECTED PAGE PROOFS

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8.1.1 Introduction Like most people, you probably take our natural environment for granted and hence give little thought to how much we depend on it. In fact, we wouldn’t even be here without it, since it provides the things essential for survival such as rain, sunshine, clean air and water. However, in recent years, it has become obvious that collectively we are changing the environment for the worse. Global economic growth (mostly since the 1970s and especially in high-income countries) has created an array of severe environmental problems that are difficult to ignore. These include: • climate change and global warming that are causing an increase in the number and severity of extreme weather events • climate change and global warming that are causing an increase in the number and severity of extreme weather events • rising sea levels of more than 20 centimetres since 1900 due to the melting of polar ice caps and glaciers, leading to the displacement of island and coastal communities forcing migration • extreme temperatures, reduced air quality and shifts in the distribution of dangerous diseases that pose threats to life and health • reduced agricultural productivity by more than 2 per cent over the last 60 years, weakening food security, increasing food prices, and adding to poverty • the poisoning of rivers, soils, and oceans, and the over clearing of land have caused the destruction of important biosystems needed for the earth to repair the damage we have inflicted. While economic growth has been important to help satisfy the needs and wants of the world’s ever-growing population (now over 7.9 billion), it has come at an enormous cost to the environment. Some economic activities now seriously threaten current and future living standards.UNCORRECTED PAGE PROOFS