Article

Sustainable Development Triangle

Abstract and Figures

Describes the economic, social and environmental dimensions of sustainable development and their interactions and linkages. Balancing and harmonizing these three dimensions is an essential pre-requisite for achieving sustainable development.
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Sustainable development triangle http://www.eoearth.org/view/article/156365/
Published: January 29, 2007, 1:54 pm
Updated: March 21, 2013, 4:43 pm
Author: Mohan Munasinghe
Author: Munasinghe Institute for Sustainable Development
Topic Editor: Cutler J. Cleveland
Topics:
SustainableDevelopment
United Nations Conference on Sustainable Development - Rio 2012 (Source: By Presidencia de la Nación Argentina [CC-BY-
SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons.)
Note: The author welcomes comments, which may be sent to MIND.
Economic aspects
Figure 1: Sustainable development triangle key elements
and interconnections (corners, sides, center). (Source: adapted from Munasinghe 1992a, 1994a)
Economic progress is evaluated in terms of welfare (or utility) measured as willingness to pay
for goods and services consumed. Thus, economic policies typically seek to increase
conventional gross national product (GNP), and induce more efficient production and
consumption of (mainly marketed) goods and services. The stability of prices
and employment are among other important objectives. Mainstream (neoclassical) economics
provides the concepts underlying this framework.
At the same time, the equation of welfare with monetary income and consumption has been
challenged for many years. For example, Buddhist philosophy (over 2500 years old) classified a
comprehensive list of human desires and stressed that contentment is not synonymous with
material consumption [1]. More recently, Maslow [2] and others have identified hierarchies of
needs that provide psychic satisfaction, beyond mere goods and services. Alkire [3] provides a
detailed review of the widely varying dimensions of human development in the literature (see
section on indicators).
At the macro level, some researchers have highlighted the role of economic forces like
international trade to explain differences in growth rates among nations [4].
Economic sustainability
The modern concept underlying economic sustainability seeks to maximize the flow of income
that could be generated while at least maintaining the stock of assets (or capital) which yield this
income [5]. Fisher[6] had defined capital as “a stock of instruments existing at an instant of
time”, and income as “a stream of services flowing from this stock of wealth”. Hicks [7] argued
that people‟s maximum sustainable consumption is “the amount that they can consume without
impoverishing themselves”. Economic efficiency plays a key role in ensuring optimal
consumption and production.
Many argue that unrestrained economic growth is unsustainable, and point out practical
limitations in applying the economic sustainability rule without additional environmental and
social safeguards. Problems arise in defining the kinds of capital to be maintained (for example,
manufactured, natural, human and social capital have been identified) and their substitutability
(see next section). Often, it is difficult to value these assets and the services they provide,
particularly in the case of ecological and social resources [8]. Even key economic assets may be
overlooked e.g., where non-market transactions dominate. Uncertainty, irreversibility and
catastrophic collapse also pose difficulties [9].
Many commonly used microeconomic approaches rely heavily on marginal analysis based on
small perturbations (e.g., comparing incremental costs and benefits of economic activities). From
the viewpoint of resilience theory, such a mildly perturbed system soon returns to its dominant
stable equilibrium and thus there is little risk of instability. Thus, marginal analysis assumes
smoothly changing variables and is not appropriate for analyzing large changes, discontinuous
phenomena, and rapid transitions among multiple equilibria. Economic system resilience is
better judged by the ability to deliver key economic services and allocate resources efficiently in
the face of major shocks (e.g., 1973 oil price shock or severe drought). More recent work is
exploring the behavior of large, non-linear, dynamic and chaotic systems, in relation to system
vulnerability and resilience.
Environmental aspects
Unlike traditional societies, modern economies have only recently acknowledged the need to
manage scarce natural resources in a prudent manner because human welfare ultimately
depends on ecological services [10]. Ignoring safe ecological limits will increase the risk of
undermining long-run prospects for development. Munasinghe [11] reviews how economic
development and the environment have been linked in the literature since Malthus. Dasgupta and
Maler [12] point out that until the 1990s, the mainstream development literature rarely
mentioned the topic of environment [13]. More recent examples of the growing literature on the
theme of environment and sustainable development include books by Faucheux et
al. [14] describing models of sustainable development, and Munasinghe et al. [15] addressing the
links between growth and environment. Several researchers argue that environmental and
geographic factors have been key drivers of past growth and development [16].
Environmental sustainability
The environmental interpretation of sustainability focuses on the overall viability and health of
living systems defined in terms of a comprehensive, multi-scale, dynamic, hierarchical
measure of resilience, vigor and organization [17]. These ideas apply to both natural (or wild)
and managed (or agricultural) systems, and cover wilderness, rural and urban areas. Resilience is
the potential of a system state to maintain its structure/function in the face of disturbance [18].
An ecosystem state is defined by its internal structure and set of mutually re-enforcing processes.
Holling [19] originally defined resilience as the amount of change that will cause an ecosystem
to switch from one system state to another. Resilience is also related to the ability of a system to
return to equilibrium after a disruptive shock [20]. Petersen et al[21] argue that the resilience of a
given ecosystem depends on the continuity of related ecological processes at both larger and
smaller spatial scales. Adaptive capacity is an aspect of resilience that reflects a learning element
of system behavior in response to disturbance. Natural systems tend to be more vulnerable to
rapid external changes than social systems the latter may be able to plan their own adaptation.
Vigor is associated with the primary productivity of an ecosystem. It is analogous to output and
growth as an indicator of dynamism in an economic system. Organization depends on both
complexity and structure of an ecological or biological system. For example, a multicellular
organism like a human being is more highly organized (having more diverse subcomponents and
interconnections among them), than a single-celled amoeba. Higher states of organization imply
lower levels of entropy. Thus, the second law of thermodynamics requires that the survival of
more complex organisms depends on the use of low entropy energy derived from their
environment, which is returned as (less useful) high entropy energy. The ultimate source of
this energy is solar radiation.
In this context, natural resource degradation, pollution and loss of biodiversity are detrimental
because they increase vulnerability, undermine system health, and reduce resilience [22].
Ciriacy-Wantrup [23]introduced the idea of safe thresholds (also related to carrying capacity),
which is important often to avoid catastrophic ecosystem collapse [24]. Sustainability may
understood also in terms of the normal functioning and longevity of a nested hierarchy of
ecological and socioeconomic systems, ordered according to scale.
Sustainable development goes beyond the static maintenance of the ecological status quo. A
coupled ecological-socioeconomic system may evolve so as to maintain a level of biodiversity
that will ensure long-term system resilience. Such an ecological perspective supercedes the
narrower economic objective of protecting only the ecosystems on which human activities
directly depend. Sustainable development demands compensation for opportunities foregone by
future generations, because today‟s economic activitychanges biodiversity in ways that will
affect the flow of vital future ecological services.
The linkage between and co-evolution of socioeconomic and ecological systems also underlines
the need to consider their joint sustainability. In brief, what ecological (and linked
socioeconomic) systems need is improved system health and the dynamic ability to adapt to
change across a range of spatial and temporal scales, rather than the conservation of some „ideal‟
static state.
Social aspects
Social development usually refers to improvements in both individual well-being and the overall
social welfare, that result from increases in social capital typically, the accumulation of
capacity for individuals and groups of people to work together to achieve shared objectives [25].
Social capital is the resource which people draw upon in pursuit of their aspirations and is
developed through networks and connectedness, membership of more formalized groups and
relationships of trust, reciprocity, and exchanges. The institutional component of social capital
refers mainly to the formal laws as well as traditional or informal understandings that govern
behavior, while the organizational component is embodied in the entities (both individuals and
social groups) which operate within these institutional arrangements. For our purposes we
assume that human capital (e.g., education, skills, etc.), and cultural capital (e.g., social
relationships and customs) are also included within social capital although fine distinctions do
exist.
The quantity and quality of social interactions that underlie human existence, including the level
of mutual trust and extent of shared social norms, help to determine the stock of social capital.
Thus social capital tends to grow with greater use and erodes through disuse, unlike economic
and environmental capital which are depreciated or depleted by use. Furthermore, some forms of
social capital may be harmful (e.g., cooperation within criminal gangs may benefit them, but
impose far greater costs on the larger community).
Equity and poverty alleviation are important. Thus, social goals includes protective strategies
that reduce vulnerability, improve equity and ensure that basic needs are met. Future social
development will require socio-political institutions that can adapt to meet the challenges of
modernization which often destroy traditional coping mechanisms that disadvantaged groups
have evolved in the past.
From the poverty perspective, social capital may be classified into three basic types that overlap
in practice: bonds, bridges, and links. Bonding social capital is centered on relations of trust and
common activities among family, friends and groups within the same community. It helps to
create broad-based social solidarity, meet the daily needs of the poor, and reduce their risk
vulnerability. Bridging social capital relies on individuals and local groups building connections
with nearby communities, as well as regional and national organizations, which share similar
values or interests (e.g., credit organizations and livelihood networks, that provide social
protection and job opportunities). Such bridging has facilitated the emergence of many non-
governmental and civil society organizations. Linking social capital is built on influential
associations e.g., having access to powerful people or organizations like government ministries
and international agencies. Such links are useful to facilitate access to benefits (e.g., loans, jobs,
help with small enterprise development, etc.) and lift people out of poverty.
Trust, power and security are also important elements of cognitive social capital. Levels of trust
in individuals, groups or institutions provide an indication of the extent of cooperation. Where
networks are weak, people generally have lower levels of trust. Power is usually equated with
influence and connections. If leaders are distant and do not deliver beneficial changes, people do
not recognize them as powerful. Leaders often fail to link with the poorest groups, thereby
disempowering them further. Secure relationships play a key role in good governance. Analysis
of the dynamics of community relations provides a social map that allows practitioners to tailor
specific programs to targeted groups, thereby creating better opportunities for the poor to
participate in decision making.
Recent research has emphasized the role of institutions in explaining differences among nations
in terms ofeconomic growth or stagnation i.e., how behavioral norms govern social conduct,
which ultimately determines economic behavior [26].
Social sustainability
Social sustainability parallels the ideas discussed earlier regarding environmental
sustainability [27]. Reducing vulnerability and maintaining the health (i.e., resilience, vigor and
organization) of social and cultural systems, and their ability to withstand shocks, is
important [28]. Enhancing human capital (through education) and strengthening social values,
institutions and equity will improve the resilience of social systems and governance. Many such
harmful changes occur slowly, and their long-term effects are overlooked in socio-economic
analysis. Preserving cultural capital and diversity across the globe is important there are about
6000 cultural groups with different languages worldwide, while indigenous cultures (as opposed
to state cultures) may represent over 90% of global cultural diversity [29].
Munasinghe [30] drew the parallels between the respective roles of biodiversity and cultural
diversity in protecting the resilience of ecological and social systems, and the interlinkages
between them. Several subsequent reports from international organizations have highlighted
cultural diversity [31]. Strengthening social cohesion and networks of relationships, and reducing
destructive conflicts, are also integral elements of this approach. An important aspect of
empowerment and broader participation is subsidiarity i.e., decentralization of decision making
to the lowest (or most local) level at which it is still effective.
Understanding the links that radiate out from poor communities, and their interface with agencies
and government is critical for building connections and channeling resources more directly to
make social development more sustainable. Emphasis has sometimes been placed on the
formation of new community-level organizations, which occasionally undermine existing
networks and local groups ultimately causing the locals to feel that they have no stake or
ownership in the project. Thus, the focus is shifting towards improving governance by giving
poor people the right to participate in decisions that affect them. Working with existing
community-based social capital generates pathways to lever people upward from poverty. It also
results in a more sustainable link with communities, and creates opportunities for more
meaningful participation.
Notes
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Further Reading
Munasinghe, M. 1992a. Environmental Economics and Sustainable Development, Paper
presented at the UN Earth Summit, Rio de Janeiro, Environment Paper No.3, World Bank, Wash.
DC, USA.
Munasinghe, M. 1994a. „Sustainomics: a transdisciplinary framework for sustainable
development‟, Keynote Paper, Proc. 50th Anniversary Sessions of the Sri Lanka Assoc. for the
Adv. of Science (SLAAS), Colombo, Sri Lanka.
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Sustainomics is a transdisciplinary, integrative, comprehensive, balanced and practical framework for making development more sustainable. Its basic principles are set out. Sustainable development has economic, social and environmental components. Given the key role played by economics in development decisionmaking, this paper sets out a practical approach for implementing Sustainomics, by integrating the different elements of sustainability based on environmental economics. The use of this approach is described at various levels of decisionmaking – project/local, sectoral/subnational, economywide/national, and global/transnational. Concepts and techniques for valuation of environmental impacts of projects and policies are presented that enable such environmental considerations to be explicitly considered in the conventional cost-benefit calculus used in economic decisionmaking. The process of internalizing these environmental externalities may be facilitated by extending the techniques of conventional economic theory, with particular reliance on willingness-to-pay as a measure of value. Problems caused by discounting, risk and uncertainty are discussed. When economic valuation of environmental impacts is difficult, reliance may have to be placed on multicriteria methods. Economywide policies (both sectoral and macroeconomic) often have significant environmental effects. The solution is not necessarily to modify the original broader policies (which have conventional economic or poverty related goals) but rather to design more specific and complementary environmental measures that would address the more specific policy, market or institutional imperfection and thereby help mitigate negative effects or enhance positive impacts of the original polices on the environment. Illustrative case studies are presented to demonstrate the practical application of these ideas.
Article
For this Handbook authors known to have different views regarding the nature of development economics have been selected. The Handbook is organised around the implications of different sets of assumptions and their associated research programs. It is divided into three volumes, each with three parts which focus on the broad processes of development. Volume 1 of the Handbook begins by discussing the concept of development, its historical antecedents, and alternative approaches to the study of development, broadly construed. The second part is devoted to the structural transformation of economies. The role that human resources play in economic development is the focus of the last section of this volume.
Book
• FAUCHEUX S., PEARCE D., PROOPS J. (eds., 1996), Models of Sustainable Development,