Consumption And Sustainable Development

Political and economic liberalization have spread rapidly around the globe in the past decade. Few argue that democratization is inconsistent with sustainable development. Many, however, have a less sanguine view of economic liberalization. In their view, market-led economic growth has yielded levels of consumption in developed countries that cannot be sustained, much less attained by developing countries. Consumption is seen as being inherently linked to environmental degradation and resource depletion. The hypothesis that environmental degradation is linked to private consumption, while seemingly logical, is not supported by cross-country data on air and water pollution compiled since the early 1970s by the Global Environmental Monitoring System or by cross-country data on forest cover for 1980-90 compiled by FAO. Nor do data on mineral reserves support the argument that consumption is undermining development prospects by leading to escalating depletion of energy and other natural resources. There is therefore no inevitable tradeoff between private consumption and environmental quality or resource availability. This should not be surprising. The root cause of environmental degradation is not the level of consumption, but rather market and policy failures that lead consumers and producers to ignore the full social costs of their decisions. Attention should focus not on capping consumption levels, but rather on addressing these market and policy failures. Economic and political liberalization, combined with environmental policy reform, is the way to do this.