Sustainable Economic Development Essay

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Question 1

One of the key challenges and needs identified by the ISC team is financing. The other challenges include, collaboration, making the case for prosperity through sustainability, taking a comprehensive approach to green empowerment, and data (Institute for Sustainable Communities – ISC, 2011, p. 7). As the authors point out, “transitioning to a sustainable economy will require significant investments from both public and private entities…” (ISC, 2011, p. 6). It should, however, be noted that funding is a finite resource. Further, the very nature of the said transition makes actual costs uncertain – effectively meaning that there could be a mismatch between the actual costs and the funds allocated. This brings about what is referred to as a cost overrun or cost underrun risk, which in essence is a situation whereby an undertaking’s costs either go above or below the initial cost estimate (Boyd, 2012, p. 314). The achievement of optimal outcomes is complicated by the inherent challenges associated with defining tradeoffs in undertakings of this nature. Given the scarcity of means, “choices have to be made between means or between ends” (Wantzel, 2016, p. 36). It is for this reason that ISC calls for more innovative funding models. Some of the considerations that ought to be highlighted in this case include the establishment of dedicated funds tailored to engage both traditional and new partners. Traditional partners have in the past comprised of the government, foundations, and wealthy persons. On this front, local wealth could also be taped. This particular approach could be effective as such persons are very familiar with their local settings and therefore support initiatives whose progress they can easily track and be part of. In basic terms, it should be noted that to meet development goals, more funds may be required. In the end, however, innovative financing ought to play a complimentary role – and no attempts should be made to limit (or replace) government involvement.

Question 2

Pezzey and Toman (2002) point out that “a sustainability objective or standard… is more than a simple PV criterion” (p. 29). The implications of their seemingly simplistic statement are profound. Decision makers face unique challenges when it comes to the assessment of how desirable projects and policies are. This is more so the case with the full realization that today’s undertakings and choices have consequences in the long-term.

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With this in mind, it therefore follows that the assessment of the viability of policies with long-term benefits and costs using PV could prove challenging. Thus what Pezzey and Toman mean with the statement highlighted above is that sustainability goals go beyond the maximization of the present utility of outcomes. As a matter of fact, it has been pointed out that “one variant of the weak sustainability measure is that the present value of development benefits should be positive” (Pearce, Barbier, Markandya, 2013, p, 4). Pezzey and Toman (2002) point out that from time to time, a conventional PV standard or objective drives the investment behavior in the market (p. 10). In the past, various texts have queried the “moral underpinnings of the PV criterion and drawing attention to other moral criteria (such as concepts of environmental justice and stewardship) that are important for intergenerational resource allocation” (Pezzey and Toman, 2002, p. 10). In essence, sustainable development ought to address present needs while at the same time ensuring that the ability of the coming generations to confront resident or emerging needs at that time is not compromised. Larson (2007) suggests that future generations ought to be offered some form of compensation for resource depletion (p. 235). In the final analysis, it is important to note that as Pezzey and Toman (2002) note, the intergenerational equity debate is effectively foreclosed by PV optimality, thus effectively advancing all the rights to resources to the present-day generation (p. 15).

Question 3

The Environmental Kuznets Curve is, in essence, “a hypothesized relationship between various indicators of environmental degradation and income per capita” (Stern, 2004, p. 1422). As the author further points out, this model argues that an increase in income per capita first leads to a rise in environmental degradation indicators, and then a descent in the same (Stern, 2004, p. 1422). Thus in general, an initial phase of economic development is likely to be accompanied by environmental deterioration, more specifically as pollution increases. This is because economic empowerment and growth is often (at least initially) accompanied by what Barbier and Markandya (2013) refer to as increased energy combustion, and hence increased Co2 emissions from factories and motor vehicles and over-utilization of….....

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