3.5.7 Environmental Challenges: Economic Viewpoint

Pollution, disease, 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 swamping it in pollution or passing on diseases.  And climate change affects the whole planet.

The economic impact of these 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.

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.

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.

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  The Millennium Development Goals have now been replaced by a UN Resolution: Transforming our world: the 2030 Agenda for Sustainable Development: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.  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 (
  • There is now broad agreement to try mitigate it (
  • Some adaptation ( will be needed, depending on how successfully the temperature rises can be limited.
  • Suitable economic measures are needed, to change people’s behaviour and to incentivise countermeasures (
  • Alternatives to fossil fuels are already available (
  • Further innovations in the energy industry are possible, 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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