3.5.7 Environmental Challenges: Economic Viewpoint

Disease, pollution, resource shortages and climate change are major challenges that affect economies and are affected by them.  Their impact crosses borders: countries affect each other.  No country is immune from the possibilities of the rest of the world passing on diseases or swamping it in pollution.  And climate change affects the whole planet.

The economic impact of these four challenges is considered here.  The most appropriate response is partly a moral question (, but economics constrain what is possible.  The decision-making is largely political (6.7.5), taking account of economic and moral considerations, and it highlighted the effectiveness of different styles of political leadership (6.3.4).

●  The COVID-19 coronavirus pandemic had a huge economic impact around the world in 2020 as governments tried to save lives by shutting down parts of their economies.  A BBC article, Coronavirus: How the pandemic has changed the world economy, reported falling stock markets, rising unemployment, changing habits in shopping and travel, and increased pharmaceutical company profits.

●  Air pollution has also damaged people’s health.  As Rebecca Solnit wrote in The Guardian, There’s another pandemic under our noses, and it kills 8.7m people a year.  Although this is a bigger and older problem than COVID-19, it has received much less attention because people have become used to the pollution – whereas the impact of the newer disease was sudden and dramatic.

●  Resource shortages are potentially an economic problem but, as noted earlier (3.2.6), many can be resolved by finding substitutes or new sources of supply.  That argument, however, doesn’t apply to water shortages.  It is possible to convert seawater to drinking water, but this can only be cost-effective for countries with hot climates and access to the sea.  Less wasteful use of water should be encouraged.

●  Climate change will render some parts of the world uninhabitable, as agricultural land turns to desert.  Populations might try to move to safety, or compete for resources.  Emigration might be the only option for people in some less wealthy countries unless something can be done to help them.  The impact of large-scale migration cannot solely be expressed in economic terms; it damages the lives of people who have to move, and it can put stress on the places they flee to.

Collective action to solve global economic problems requires a joint approach.  Individual governments commit to targets for implementation of collective goals.  The Millennium Development Goals have now been replaced by a UN Resolution: Transforming our world: the 2030 Agenda for Sustainable Development:

“The 17 Sustainable Development Goals and 169 targets which we are announcing today demonstrate the scale and ambition of this new universal Agenda. They seek to build on the Millennium Development Goals and complete what they did not achieve. They seek to realize the human rights of all and to achieve gender equality and the empowerment of all women and girls. They are integrated and indivisible and balance the three dimensions of sustainable development: the economic, social and environmental.

The Goals and targets will stimulate action over the next 15 years in areas of critical importance for humanity and the planet.”

This resolution was adopted by the UN General Assembly on 25 September 2015.  Its environmental goals, which very broadly aim at preservation, are addressed in this section.   Economic policies for developing countries are in the next section (3.5.8).

Climate change, largely caused by increased carbon-dioxide in the atmosphere, is the most difficult of the global economic challenges itemised above.  As described in the following sub-sections, addressing it is a matter of urgency and there are choices to be made:

●  There should no longer be controversy about how high a priority it is (  People who oppose taking immediate action, for short-term economic and political reasons, are gambling with the future of the planet.

●  There is now broad agreement to try mitigate climate change, by cutting the rate of carbon emissions (

●  Some adaptation ( will be needed, to defend people against the unavoidable changes in climate (depending on how successfully the temperature rises can be limited).

●  Suitable economic measures, such as carbon taxes, are needed – to change people’s behaviour and to incentivise countermeasures (

●  Alternatives to fossil fuels are already available (  These include hydropower, wind, solar, biomass, geothermal and hydrogen.

●  Further innovations in the energy industry are possible (, for example nuclear fusion, but more research is needed.

●  ‘Geoengineering’ – removing carbon from the atmosphere or reducing the sun’s warming effect – can also help to reduce global temperatures (



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This page is intended to form part of Edition 4 of the Patterns of Power series of books.  An archived copy of it is held at https://www.patternsofpower.org/edition04/357.htm