Sustainable development triangle

Published: January 29, 2007, 1:54 pm

Updated: March 21, 2013, 4:43 pm

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Sustainable Development (main)

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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 (Tools and methods for integrated analysis and assessment of sustainable development)).

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 [[ecosystem]s] on which human activities directly depend. Sustainable development demands compensation for opportunities foregone by future generations, because today’s economic activity changes 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 of economic 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

1. ^Narada, The Venerable 1988. The Buddha and His Teachings, Buddhist Missionary Society, Kuala Lumpur, Malaysia, Fourth Edition.
2. ^Maslow, A.H. 1970. Motivation and Personality, Harper and Row, New York.
3. ^Alkire, S. 2002. ‘Dimensions of human development’, World Development, Vol.30, No.2, pp. 181–205.
4. ^World Bank 1993d. The East Asian Miracle, Policy Research Report, World Bank, Washington DC, USA.Frankel, J. and Romer, D. 1999. ‘Does Trade Cause Growth?’ American Economic Review, Vol. 89 (June), p. 379–99.
5. ^Solow, R. 1986. ‘On the intergenerational allocation of natural resources’, Scandinavian Journal of Economics, Vol. 88, No. 1, pp.141–9.Maler, K.G. 1990.
6. ^Fisher, I. 1906 (reprinted 1965). The Nature of Capital and Income, Augustus M. Kelly, New York NY, USA.
7. ^Hicks, J. 1946. Value and Capital, 2nd edition, Oxford University Press, Oxford, UK.
8. ^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.
9. ^Pearce, D.W., and K. Turner 1990. Economics of Natural Resources and Environment, Harvester Wheatsheaf, Hemmel Hempstead, UK.
10. ^MA-CF 2003. Conceptual Framework: Ecosystems and Human Well-being, Millennium Ecosystem Assessment, Island Press, Washington DC.
11. ^Munasinghe, M. 2002b. Macroeconomics and the Environment, The International Library of Critical Writings in Economics, Edward Elgar Publ., London, UK.
12. ^Dasgupta, P. and Maler, K.G. 1997. ‘The resource basis of production and consumption: an economic analysis’, in P. Dasgupta and K.G. Maler (ed.) The Environment and Emerging Development Issues, Vol. 1, Claredon Press, Oxford, UK.
13. ^Stern 1989.Chenery, H. and Srinivasan, T.N. 1988. Handbook of Development Economics, i and ii, North-Holland, Amsterdam.Chenery, H. and Srinivasan, T.N. 1989. Handbook of Development Economics, i and ii, North-Holland, Amsterdam.Dreze, J. and Sen, A. 1990. Hunger and Public Action, Clarendon Press, Oxford.
14. ^Faucheux, S., Pearce, D. and Proops, J. (Eds.) 1996. Models of Sustainable Development, Edward Elgar Publ., Cheltenham, UK.
15. ^Munasinghe, M., Sunkel, O. and de Miguel, C. (Eds.) 2001. The Sustainability of Long Term Growth, Edward Elgar Publ., London, UK.
16. ^Diamond, J. 1997. Guns, Germs and Steel: The Fates of Human Societies, W.W. Norton, New York, NY, USA.Sachs, I. 2001. ‘Tropical Underdevelopment,’ NBER Working Paper 8119, National Bureau of Economic Research, Cambridge, MA, USA.
17. ^Costanza, R. 2000.‘Ecological sustainability, indicators and climate change’, in M. Munasinghe and R. Swart (eds) Climate Change and its Linkages with Development, Equity and Sustainability, IPCC, Geneva, Switzerland.
18. ^Pimm 1991. The Balance of Nature?, University of Chicago Press, Chicago, Illinois, USA.Ludwig et al. 1997. ‘Sustainability, stability, and resilience’. Conservation Ecology [online] Vol. 1, No. 1, p.7.Holling and Walker 2003. ‘Resilience Defined’, Internet Encyclopedia of Ecological Economics, International Society for Ecological Economics.
19. ^Holling 1973. ‘Resilience and stability of ecological systems’, Annual Review of Ecology and Systematics, Vol. 4, pp.1–23.
20. ^Pimm, S.L. 1984. The complexity and stability of ecosystems. Nature 307: 322-326.
21. ^Petersen, G.D., Allen, C.R. and Holling, C.S. 1998. ‘Diversity, ecological function, and scale: resilience within and across scales’, Ecosystems, Vol. 1.
22. ^Perrings, C. and Opschoor, J.B. 1994.Munasinghe, M., and Shearer, W. (Eds.) 1995. Defining and Measuring Sustainability: The Biogeophysical Foundations, UN University and World Bank, Tokyo and Washington, DC, USA.
23. ^Ciriacy-Wantrup, S.V. 1952. Resource Conservation: Economics and Politics, University of California Press, Berkeley, CA, USA.
24. ^Holling, C.S. 1986. ‘The resilience of terrestrial ecosystems: local surprises and global change’, in W.C. Clark and R.E. Munn (Eds.), Sustainable Development of the Biosphere, Cambridge University Press, Cambridge, UK, pp.292-317.Ekins, P., Folke, C., and de Groot, R. 2003. ‘Identifying Critical Natural Capital’, Ecological Economics, Vol 44 No. 2-3, p. 159-65.
25. ^Coleman, J. 1990. Foundations of Social Theory, Harvard Univ. Press, Cambridge, MA.Putnam, R.D. 1993. Making Democracy Work: Civic Traditions in Modern Italy, Princeton Univ. Press, Princeton.
26. ^North, D. 1990. Institutions, Institutional Change and Economic Performance, Cambridge Univ. Press, Cambridge, UK.Acemoglu, D. Johnson, S. and Robinson J.A. 2001. ‘The Colonial Origins of Comparative Development: An Empirical Investigation’, American Economic Review, Vol. 91 (December), pp. 1369–1401.
27. ^UNEP, IUCN, and WWF 1991. Caring for the Earth, United Nations Environment Programme International Union for the Conservation of Nature and World Wildlife Fund, Nairobi, Kenya.
28. ^Chambers, R. 1989. ‘Vulnerability, coping and policy’, IDS Bulletin, Vol. 20, No. 2, pp.1–7.Bohle et al. 1994. ‘Climate change and social vulnerability: toward a sociology and geography of food insecurity’, Global Environmental Change, Vol. 4, No. 1, pp.37–48.Ribot, J.C., Najam, A. and Watson, G. 1996. ‘Climate variation, vulnerability and sustainable development in the semi-arid tropics’, in J.C Ribot, A.R. Magalhaes and S.S. Pangides (Eds), Climate Variability, Climate Change and Social Vulnerability in the Semi-Arid Tropics, Cambridge University Press, Cambridge, UK.
29. ^Gray, A. 1991. ‘The impact of biodiversity conservation on indigenous peoples’, in Biodiversity: Social and Ecological Perspectives, V. Shiva (editor), Zed Books, London, UK.
30. ^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.
31. ^UNESCO 2001. Declaration on Cultural Diversity, United Nations Educational, Scientific and Cultural Organisation, Paris, France.UNDP 2004. Cultural Liberty in Today’s Diverse World, United Nations Development Programme, New York, NY, USA.Davis, S.H. 2005. “International Agency Perspectives on Cultural Diversity and Development”, Social Development Dept., World Bank, Wash. DC, USA.

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.

This is a chapter from Making Development More Sustainable: Sustainomics Framework and Applications (e-book). Previous: Basic concepts and principles of sustainomics|Table of Contents (Sustainable development triangle)|Next: Economic, social, and environmental elements of development

Citation

Munasinghe, M., & Development, M. (2013). Sustainable development triangle. Retrieved from http://editors.eol.org/eoearth/wiki/Sustainable_development_triangle