Growth, environment and Islam

The environmental devastation that today confronts not only human-beings but all life forms on the planet earth has brought up the concept of sustainability contextual to growth-oriented development. Western though in origin and understanding, the implications of sustainable development extend to Islam in which, as in the other Abrahimic faiths, one can find an essence of this idea. Several economists have in recent years have examined the debate on the meaning of sustainable development in Islam and attempts to explain the Islamic position on environmental issues the world now faces. This Chapter examines the debate on several interpretations of sustainability and attempts to expound upon a concrete, Islamic definition for sustainable development. It argues that development is intricately linked to the environment as any definition of sustainability ends with environmental concerns. Such linkage assumes importance contextual to Islamic finance as the developmental funding is now being increasingly used to serve environmental ends. Islamic Finance is so far based essentially upon a negative-screen methodology, relying upon averting investments and actions contrary to Islamic law rather than positive investment in socially responsible concerns. While organizations such as the Islamic Development Bank do engage in development projects, positivism, and particularly the environment, is absent in most of the criteria of Islamic financial institutions. The development of a definition for Islamic sustainable development this chapter presents implies another opportunity for convergence between Islamic Finance and other ethical investments. With the growing popularity of socially responsible investment principles in the world of conventional finance, perhaps an Islamic counterpart would provide an opportunity for collaboration, particularly given the great liquidity of the Gulf region, for it could provide the framework for a positive-screen methodology. Finally, we take a brief look at the sort of environmental problems and the solutions suggested to resolve them, especially the viability of the Coase theorem.