Sustainable Development

ABSTRACT

Achieving Sustainable Development should be a very compelling target for each economy, given the fact that our planet has suffered enough by human intervention during previous centuries.

This thesis starts with a references’ synthesis relevant to the examined topic.

30 Scientific published papers have been chosen according to their relevance and they have been shorted in three categories:

  • Decoupling between GDP and Labor Productivity
  • Decoupling between GDP and Resource Productivity
  • Decoupling between GDP and Energy Consumption

Studying on these papers resulted a references’ synthesis chapter which is presented in this thesis.

Upon completion of the references’ synthesis we  proceed in the empirical analysis of data for 30 countries in order to determine whether the necessary conditions of sustainable development, as defined by the theory, are met. 10 high-income countries, 10 middle-income countries and 10 low-income countries around the world are selected, based on the classification designated by the World Bank, according to Gross Domestic Product per capita of each country.

At the first stage of empirical analysis the required indicators are calculated in order to determine the relationship “Growth rate of LP < Growth rate of GDP < Growth rate of RP”, which according to the By Zeenat Niazi, Anshul S. Bhamra (2015 ) needs to be satisfied in order to achieve conditions for sustainable development in an economy.

At the second stage of empirical analysis the required decoupling  indicators are calculated in order to determine the extent of the environmental burden caused by economic growth. The following indexes are calculated:

  • Elasticity ECO2-GDP : The response rate of CO2 emissions related to GDP changes.
  • Elasticity ECO2-TEC : The response rate of CO2 emissions related to Energy Consumption changes.
  • Elasticity ETEC-GDP : The response rate of Energy Consumption related to GDP changes.
  • Elasticity EEP-GDP : The response rate of Energy Productivity related to GDP changes.
  • Elasticity ELP-GDP : The response rate of Labour Productivity related to GDP changes.
  • Elasticity ERP-GDP : The response rate of Resources Productivity related to GDP changes.

These indexes are also calculated for the long-term period 1980-2010.

Finally, results and conclusions are presented and future fields of analysis are proposed.

Keywords: Sustainable Development, Decoupling, GDP, Energy, Resources.

Full dissertation file (in greek) here

Indicative figures

2-countries

Figure 1: High-Income countries, Indexes for the long period 1980-2010fig-1

Figure 2: Middle-Income countries, Indexes for the long period 1980-2010fig-2

Figure 3: Low-Income countries, Indexes for the long period 1980-2010fig-3

Table 1: Elasticitytotal-1

Table 2: Elasticity in the long period 1980-2010total-2

Conclusions

The main conclusions after the completion of the References’ Synthesis are the following:

  • It is extremely difficult to define dynamic models for determining the factors which are crucial and decisive for achieving sustainable development.
  • The more accurate models are those based on the environmental Kuznets curve, since over time demonstrated that the assumptions lead us to safe estimates for the viability of an economy.
  • The connection failure of productivity growth by strengthening real incomes questions the typical clichés that economic productivity growth automatically translates into higher living standards.
  • It is important effect of inflation to increase profits by increasing productivity.
  • Lower inflation accompanied by an increase in productivity is generally a happy coincidence for income growth, but it is critical to mention the findings regarding the unequal distribution of the profits of the top 10% benefiting from increased productivity.
  • The impact of innovation on economic growth varies in intensity and duration, between countries.
  • There are now enough data to support the view that the increase in income positively affect environmental quality.
  • For the transition to a more sustainable global economy, resource sustainable management requires policies that promote decoupling resource exploitation and environmental burden compared to GDP growth, with emphasis on the need for an absolute reduction of resources utilization in developed economies and relative decoupling in developing economies.
  • As is clear from the references’ synthesis, it is concluded that in order to achieve sustainable development of economy, it is desirable to meet three conditions:
  1. No Decoupling (or at least at very low levels) between GDP and Labor productivity.
  2. Decoupling (or at least relative) between GDP and Resource Productivity.
  3. Decoupling (or at least relative) between GDP and Energy Consumption.

The main conclusions after completion of the empirical analysis are the following:

  • The results of the empirical analysis in this study are consistent with the environmental Kuznets curve philosophy.
  • Countries with low and high income appear to have lower environmental impact and middle-income countries in strong growth phase appear to have a higher environmental burden (eg Turkey, China, India).
  • The results of the first empirical analysis stage are confirmed by the findings and the calculations in the 2nd stage of the empirical analysis.
  • Within High-Income Countries Decoupling between GDP and Environmental impact appears in the richest countries (France, Switzerland, USA) whilst relative decoupling appears in other countries.
  • Within Middle-Income Countries Decoupling between GDP and Environmental impact appears only Bulgaria whilst relative decoupling appears in other countries, with high environmental impact.
  • Within Low-Income Countries Decoupling between GDP and Environmental impact appears in the richest countries (Ethiopia, Zimbabwe), whilst relative decoupling appears in other countries, with low environmental impact.
  • In Low-Income Countries Energy productivity is extremely low, whilst it is extremely high in high-income countries. In Middle-income Countries Energy productivity varies according to the economic growth.
  • In all countries within the three categories relative Decoupling between GDP and Labor productivity appears, but at low levels. In most countries, the monotony of the graphs is very similar.
  • The examination of decoupling indexes for long period, in most countries, shows an improvement of environmental indexes towards sustainable development.
  • The results from the empirical analysis, especially for the long run, provide us with important findings, regarding the indexes that must be improved towards sustainable development.
  • Financial crisis must not be a cause of slowing the efforts for sustainable development. Instead, it should be crystal clear that we, more than ever, need to focus on new methods and policies in order to combine economic growth with the lowest impact in the environment.