Introduction
Integration of environmental changes into most of the development aspects is crucial in the current economy due to disruptions of progress recently. Sustainable development contributes to satisfying the present generation’s needs and protecting the future generation. Lack of coordinated action to balance the development aspects can affect the quality of the environment. Sustainable social and economic development is characterized by economic well-being in a country. Also, the quality of life of individuals shows the extent to which environment and development approaches have been utilized. This report will discuss the environmental impact the world economy has had on developed and developing countries and whether sustainability is a practical feasibility for nations. Further, it will discuss why national environmental concerns in developing countries are likely to focus increasingly on urban problems in the future.
a) What are some of the environmental impacts on the world economy that have had several major adverse impacts in many developed and developing countries?
Resource scarcity and fluctuations in prices
The overreliance on non-renewable resources has led to the near depletion of natural resources such as freshwater, causing scarcity and increased price volatility. The reason is that adverse environmental impacts increase the demand and supply gap, increasing the costs of bridging the rift. This impacts prices due to the law of demand and supply; less supply than demand increases the prices of a commodity or service. For instance, in Mozambique, between 2014-2018, 67% of the country’s population experienced water scarcity due to the negative impacts of climate change (Daniel Delgado, 2020). Also, in the United States, there has been a surge in oil prices due to the depletion of oil reserves with less supply, especially with the sanctions on Russia. This has led to a price rise to $4 (Krauss, 2022).
Shift in Consumer Behavior
There has been increased consumer awareness of issues regarding climate change, which has influenced consumer preferences when purchasing products. The growing influence of sustainability on consumers has resulted in customers purchasing from sustainable brands and boycotting unsustainable brands (Habib et al., 2021). For example, 2/3 of Americans in America prefer shopping with sustainable brands, adopt sustainable practices in their daily lives, and are willing to change their consumption habits to support the course (Hansen, 2022). This is also evident in South Africa with some of the population acknowledging sustainability and putting it into consideration before purchasing an item (Hattingh & Ramlakan, 2022). The smaller percentage is also attributed to the low standard of living; hence, price becomes a major decision-making factor compared to sustainability.
Inability to achieve sustainable development goals
The world economy has made it challenging for developed and developing countries to achieve sustainable development goals (SDGs). This is due to the intensification of industrial and human activities in the quest to achieve economic development. For example, in Greece, there are increased climate conditions that affect the natural as well as cultural heritage of individuals (United Nations, 2019). Despite the efforts developed and developing countries put into attaining and maintaining sustainable business practices, the world economy disruptions affect the way of conducting business while preserving the environment. Trade imbalances influence sustainable development in developed and developing countries in the world economy. Exporting more products that a country imports causes issues of trade deficits, leading to increased debts and economic instabilities. When developing countries accumulate high debt levels, it becomes difficult to achieve sustainable development. This is because settling debts diverts resources. Also, the world economy has recently faced economic disruptions such as the COVID-19 pandemic, making it difficult to balance pursuing economic recovery and sustainable development initiatives, for example, in Saudi Arabia (Singh et al., 2022). As a developing nation, Saudi Arabia emphasizes economic sustainability; however, the economic and financial crises in the current economy disrupt the agenda because it has affected economic growth, job opportunities, and the people’s living standards.
Reduced Productivity
The world economy has reduced productivity for developed and developing countries due to economic cycles (United Nations, 2017). The world economy is characterized by growth and recession cycles, which shape the extent of production. Economic downturn exposes businesses to challenging situations that can force them to change their investment patterns, slowing production. Also, demographic changes, especially in developed countries, affect productivity. This is because the aging population generates reduced labor, thus, low productivity rates; for example, in Iran, labor productivity dropped 2022 by around 0.24% (CEIC Data, 2022). Developed and developing countries have income inequalities due to the unfair distribution of wealth. These inequalities limit equal access to accelerators of production, such as education services. Also, social and political instabilities such as the recent Russia-Ukraine war negatively impact production levels globally. Equally, the world economy has affected production costs. Firms in developed and developing countries experience high production costs due to increased prices for raw materials.
b) Is Sustainability a Feasible goal for nations
Sustainability is a feasible and practical goal for nations. However, achieving sustainability has its own challenges that need redesigning the traditional approaches to conducting business and living life. According to a report by the United Nations (2023), the new research the body has conducted proves that sustainability is achievable. However, it will require major changes in energy, food, water, and other resources.
First, sustainability is an achievable goal for nations as nations have the resources needed to achieve it. The reason is that sustainability supports the efficient utilization of resources to meet the current generation’s needs without compromising the needs of future generations. To achieve environmental sustainability, nations are required to switch from non-renewable sources of energy, which are the main sources of climate change, to renewable sources of energy, which are abundant and available in each nation (Destek & Sinha, 2020). According to a report from the United Nations (2023), renewable sources of energy are stated to be available in abundance on Earth since they are provided by heat from the Earth, waste, water, wind, and sun, which get replenished by nature all the time without having the need to exploit non-renewable resources that have a negative impact on the environment. Therefore, sustainability is a feasible goal for each nation since they all have renewable energy sources.
Second, sustainability is a feasible goal for nations as they can re-strategize the economic models. Nations can readjust their economic models from linear to circular economy models, which are more efficient and sustainable. Nations can set aside a budget for achieving sustainability to fund green initiatives such as sustainable transportation, energy efficiency, and green infrastructure. According to research by the International Monetary Fund, it was found that public adaptation costs will range around 1% of a nation’s gross domestic product; however, for developing countries, the cost will exceed 1% of the nation’s gross domestic product (Georgieva et al., 2022). Also, encompassing other factors such as drought, heat waves, and sea level rise that differ from countries, it is evident that some countries will need a much higher budget than others to achieve sustainability. However, since it is mandatory to achieve sustainability and it is a global agenda, the international communities will fund vulnerable and poor countries to reach the goal. For example, the IMF and World Bank offer financial aid to these countries to assist them in achieving the set goals within the stipulated time (Georgieva et al., 2022). This is evidenced by the International Monetary Fund providing Enhanced Structural Adjustment to countries such as Kenya, Albania, India, and Korea among others (IMF, 2022).
Third, sustainability is a feasible goal as nations can introduce regulations and policies to support sustainability. The purpose of governmental regulation is to create an environment that will support sustainability in regulating business and population consumption. According to Peleg Mizrachi & Tal (2022), encouraging eco-friendly regulations accelerates the speed of achieving sustainable goals. The reason being these regulations will control the dynamics of the economic environment that discourage the achievability of sustainability. For example, supply and demand and business competitiveness. This is supported by classical economic analysis between safety/health and environmental regulations and competitiveness, which shows that stringent governmental regulation fosters sustainability. Stringent regulations will also foster the adoption of sustainability as they will discourage engagement in activities that have been banned due to potential legal consequences that they can face. According to Atalla et al. (2022), governments can increase taxes on non-sustainable activities, introduce tax rebates and subsidies to boost the demand for green services and products such as EV vehicles and set new environmental standards and certification for pollutants, emissions, and energy performance. For example, America has enacted Executive Order 14057, which is catalyzing the use of clean energy by industries as it aims for net zero carbon footprint and emissions by 2050 (Federal Sustainability Plan, 2023). Therefore, sustainability is a feasible goal for nations since governments have the mandate and authority to introduce new policies and regulations supporting sustainability.
Fourth, sustainability is a feasible goal for nations that have been provided with the necessary guidelines for achieving sustainability and an estimated time to achieve the goals. The Sustainable Development Goals have provided countries with a blueprint for achieving sustainability by providing a set of 17 goals, each with the aims and objectives of achieving the overall goal. The time to achieving the goals is down to less than a decade; however, there has already been noticeable over the years, especially in the transportation sector. According to a report by the United Nations (2020) using indicators to assess the 12 environment-sustainable development goals, there has been a 67% positive trend, which is a good indicator as it shows the commitment nations are making towards achieving sustainability. However, in a report on sub-Saharan Africa, there is still enormous progress yet to be made as the countries in the region show a 20% positive trend in achieving sustainability. Morocco, however, has managed to implement renewable energy sources, setting a $5 million fund to ensure 50% of its energy from renewable sources (Papathanasiou, 2022). Therefore, sustainability is a feasible goal for nations as it has a clear blueprint with outlined time to achieve, progress monitors, and there is also evidence showing it is achievable by nations.
Fifth, sustainability is a practical goal for nations as it will benefit the country with progress both in the short and long term. According to UNEP (2021), sustainability offers balanced economic growth for countries by ensuring economic progress without comprising or exploiting the environment. Also, it will prevent the exploitation of the country’s exhaustible resources, which will reap its value in the future. This ensures the protection of key natural resources of the country for not only the new generation but also the future generations. In addition, countries will benefit from increased innovation development, which is set to disrupt the linear economy, which is destructive in the long term. Therefore, sustainability is a practical goal for nations as it results in the comprehensive betterment of the country both in the current and future.
c) Why are national environmental concerns in developing countries likely to focus increasingly on urban problems in the future?
Urbanization and population growth
National environmental concerns in developing countries are likely to focus increasingly on urban problems in the future because the countries are experiencing rapid urbanization, increased population, and poor environmental management and governance, thus increasing urban environmental problems. Recent research reveals developing countries are currently facing a threat of more pressing environmental challenges due to the urbanization trend (Ameen & Mourshed, 2017). Topic 5&6 highlights that urban cities offer opportunities that attract a broad range of individuals. Although these opportunities contribute to the welfare and well-being of individuals through job opportunities, they result in increased environmental challenges. This is due to increased dependency on natural resources to maintain economic opportunities for individuals. Developing countries are low-income countries that depend on internal natural resources. This results in the overexploitation of natural resources and increased environmental challenges due to the release of increased greenhouse gases. Moreover, rapid urbanization in developing countries has triggered increased rural-urban migration, hence population growth in the urban cities. For example, in African cities, the population growth level ranges from 6-7% (Topic 5 & 6). The high population increases the demand for goods and services such as housing and social services, resulting in the overutilization of natural resources. Also, the demand in urban cities exceeds the supply, thus increasing the potential for environmental challenges. For example, the quality of housing services in developing has shifted to poor housing, such as slums. For example, the slum density in Asia is approximately 72 households out of 100 (Topic 5&6). The higher the population in the urban centers, the higher the environmental degradation challenges. This is due to increased energy usage, consumer goods and services, and infrastructure.
Climate change and pollution
Climate change globally is associated with urban cities’ activities, which release increased greenhouse gases into the atmosphere. The UN Environmental Programme estimates that urban centers release around 75% of environmental emissions (UN et al., 2023). climate change affects urban life, and the main causes are transportation and increased buildings. It has resulted in high global temperatures, causing a rise in sea levels, change in weather conditions, and adverse consequences, such as floods and droughts, for example, Greece (United Nations, 2019). These factors affect the provision of basic services, health, and living standards of individuals in urban centers. Therefore, there is a need for a coordinated approach to manage the environmental concerns in urban centers. Making urban cities the most integral part of addressing environmental concerns has the potential to transform the situation at the local, regional, and national levels. Also, water and air pollution challenges are intensified in urban centers due to increased industrial activities and high energy consumption rates (Kuddus et al., 2020). The negative externalities generated by increased pollution affect the well-being of individuals in the environment. Also, it affects the survival of many species and the lack of habitat. The pollution extends to rural areas, thus increasing negative consequences. Controlling the activities in the urban centers will likely reduce environmental issues by adopting renewable energy sources and limiting emissions.
Inadequate governance and focus on economic development
There is a decline in environmental governance in most of the developing countries. The UN system reveals that good governance guarantees environmental concern and successful management of environmental challenges (Ding et al., 2019). Despite enforcing the laws and policies towards ethical and environmental practices, developing countries face the challenges of the implementation gap, especially in the urban centers. The countries lack the financial and technical resources to ensure a healthy environment. Poor governance has resulted in overconsumption and overexploitation of the available resources. This is especially true in the urban centers, which have a higher demand than the rural areas. Also, the informal sector in developing countries is gaining momentum in developing countries. The informal sector involves the creation of sole proprietorships and small-scale production. It attracts rural-urban migration, and it can result in negative environmental consequences. For example, the informal sector in Indonesia. In addition, the informal sector involves a misguided government that lacks the ability for urban organization and planning to mitigate the environmental issues; for example, in Nairobi in Kenya during the colonial period, constructing a house cost $ 3,500, and 2/3 of the land was occupied by 10% of the population (Topic 5&6). The existing poor environmental practices are associated with poor governance as the countries focus on economic development, hence less effort in controlling the industrial activities in the urban centers. According to Hanushek (2013), most developing countries pursue economic growth, thus increasing the production and consumption of goods and services. Their economic development is accompanied by economic changes, which can negatively impact the environment. For example, increased economic activities increase the disposable income for individuals, enabling them to afford goods such as cars, which can increase their carbon footprints. Also, industrialization increases ecosystem strain, thus increasing pollution.
Development of infrastructure
There is increased demand for infrastructure in urban cities, for example, in Ghana (Gurara et al., 2018). This will likely increase environmental challenges, raising the urgency for environmental concerns. Roads, utilities, and housing services are insufficient in some developing countries, such as Chile. These countries strive to ensure that they have improved infrastructure to satisfy the needs and requirements of the growing population. The construction sector in urban centers is increasingly booming, raising the demand for construction raw materials. Excessive extraction of materials such as steel will likely affect the prices of raw materials in the future (Gurara et al., 2018). The construction sector uses non-renewable materials, resulting in environmental issues. Focusing on urban problems in the future will ensure that the intensive energy consumption in the construction sector is under control to reduce the environmental impacts.
Conclusion
In conclusion, an intertwined relationship between the development of countries and environmental sustainability is inevitable. Sustainable development offers countries a blueprint for ecological well-being while ensuring economic propensity in the current and future. The reason is that sustainability ensures a clean planet but also will ensure the long-term prosperity and long-term development of nations, which is strategic.
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