Today some 1.5 billion people live exposed to dangerous levels of air pollution, 1 billion live without clean water, and 2 billion live without sanitation. Although food production doubled over the past quarter-century and outstripped population growth, the gains may have come at the cost of lost crop diversity and natural habitats—and more chemical contamination. Some estimates suggest that a seventh of the world’s tropical forests have been lost in the past 25 years.
These problems are not just local or national—they are global, as evidenced by growing regional pollution, epidemics of disease, the loss of biodiversity, potential global climate effects, and the possibility of "environmental refugees" leaving severely degraded areas.
Poverty arising from lack of economic development is at the root of many environmental problems. Only with accelerated economic development in poor countries can environmental problems be tackled. True, economic growth can make some environmental problems worse, but without growth environmental problems will be harder to address. So it is not useful to think of development and the environment as involving a tradeoff. The only sensible approach is to ensure—through better environmental stewardship—that future economic development is socially and environmentally sustainable.
As we have come to better understand the links between economic development and the environment, it has become broadly accepted that inappropriate economic policies have a high cost for the environment, that poverty and environmental problems are closely linked, that environmental values have to be incorporated in the prices that guide economic growth, and that regional and global actions are essential to deal with environmental problems that cross national borders.
Broad acceptance of these propositions does not mean, however, that they have been translated into effective policies. Indeed, environmental problems continue to worsen in many countries. But growing national awareness of environmental issues and the way economic activities affect the environment is at last influencing the thinking of policymakers. For example, a few countries have reduced per capita carbon dioxide (CO2) emissions over the past decade, and several others, mostly high-income countries, have exceeded the informal objective of designating 10 percent of total land area as protected areas.
We are learning more about how economic and environmental systems are interconnected—and how actions in one system can have important effects on the other. The environment can no longer be thought of as a source of "free" environmental goods and services—free forests, free fish, free freshwater. Nor can it be thought of as just a sink for disposing of waste products from homes, industries, and other sources.
Measuring the environment
The environment is a cross-cutting issue, and this must be reflected in environmental indicators. Some indicators deal with environmental "goods," such as protected areas or biodiversity. Others measure deforestation or soil loss, or pollution of the air or water. And still others monitor the effects of environmental degradation—such as waterborne disease, species loss, or number of threatened species. Such indicators are important because the links between the environmental and economic worlds are direct and immediate. Growth at the expense of the environment, or of the health of a nation’s population, is likely to be unsustainable.
Many relevant indicators are not presented here, however, because of weaknesses in country coverage and concerns about the quality and comparability of data. Depletion issues in particular are inadequately captured. This lack of adequate and timely data of acceptable quality is a serious constraint on measuring the state of the environment and designing sound policies. While new techniques, such as geographic information systems (GIS), are now being used to analyze the environment, information on many aspects of the environment is sparse. The data available are usually of uneven quality, relate to different periods, and are sometimes out of date. As a result data are not only inadequate for policymaking, but may not always be comparable across countries. (Specific issues relating to each indicator are discussed in the About the data sections following each table.)
Another problem in measuring the state of the environment is that many environmental indicators are not meaningful at the national level. Although the world is organized into nation-states with sovereign governments, activities in one nation may sometimes have consequences for other nations. Air and water pollution do not observe national boundaries. On the other hand, some environmental issues are highly localized and location-specific. So in many cases global, regional, or city indicators are more meaningful than national aggregates. This is the direction environmental indicators are moving.
Land use and biodiversity
With growth and development, there is a tendency for forestland to be converted to agricultural land and urban land. But as development proceeds, some low-productivity agricultural land can revert to forests. This is less common, however, and for most developing countries the loss of forestland is a major issue. Of more direct importance for the environment is how land is used and whether agricultural and forestry practices are sustainable (table 3.1). Sustainability, however, is not captured well by current national indicators.
Closely linked to changes in land use are changes in protected areas and in biodiversity. The extent of protected areas and their management reveal how a country is protecting its biological resources. Many countries have an unofficial goal of protecting about 10 percent of their land area. But only some countries have achieved this goal (table 3.2). Protected areas in high-income countries approach 12 percent of their land area, while in low- and middle-income countries protected areas represent 3.0–6.5 percent of their land area. Protection has costs as well as benefits. Without appropriate analysis of both, it is hard to be certain whether protecting a specified percentage of land area is the right goal.
Water supply
The availability and quality of water are crucial to economic growth and development. For water the problem is often "too little, too much, or too dirty." Some countries have abundant untapped water to support growth far into the future. Others, such as Yemen, have already used up almost all sources, and major increases in supplies will be expensive (table 3.3). Agriculture is typically responsible for 60–80 percent of annual withdrawals of freshwater, but industrial and domestic uses are much more important and produce more value per cubic meter.
In this century global water withdrawal has increased almost tenfold, with an increasing share going to industrial and domestic uses (figure 3a). Greater efficiency in the use of water within sectors and reallocation among sectors are needed to balance supply and demand.
Linked to the shortage of freshwater is the question of reliability of supply. In many developing countries water supply is handled largely by public utilities that are not operationally viable, resulting in a water supply of both poor quality and limited availability.
Total water available is an imperfect indication of the environmental and health consequences of the water supply, since water-short countries can, with proper management, do better than water-rich countries with inappropriate policies. This is especially true in agriculture, where water wastage is a costly and persistent problem. Raising water prices can usually help the environment without harming agricultural production.
Energy use and pricing
The link between economic growth and increased energy consumption is direct and positive—and only at the highest income levels are there signs of decreased per capita energy consumption despite economic growth. Per capita energy use in Germany has declined from 4,600 kilograms oil equivalent in 1980 to 4,100 in 1994, while energy use in the United States and Canada has been stable, around 7,850 kilograms oil equivalent in recent years (table 3.4). During this period low-income countries increased their per capita consumption from 250 to 370 kilograms oil equivalent (excluding China and India, the increase would be from 115 to 135 kilograms oil equivalent). But low-income countries use only 14 percent of total world energy (1.7 percent, excluding China and India), while high-income countries use 57 percent of the total (3b). Fortunately, high-income countries now use energy more efficiently: their GDP per unit of energy use, measured in constant 1987 dollars per kilogram oil equivalent, increased from $2.90 in 1980 to $3.40 in 1994 (table 3.5). The energy efficiency of middle-income countries, however, declined slightly during the same period.
Energy use has important environmental consequences at all stages of production and consumption, not all of which are reflected in the prices paid by users of energy or in the costs borne by producers of energy. These consequences can be mitigated by pricing commercial energy (through taxes or subsidies) so as to encourage efficiency in energy use and by increasing reliance on renewable energy. A major byproduct of energy generation is emissions of CO2, the principal greenhouse gas. In China 82 percent of greenhouse gas emissions were generated by energy use. The United States and China are the largest contributors to CO2 emissions, accounting for some 35 percent of global emissions. On a per capita basis CO2 emissions declined about 4 percent during 1980–92 in high-income countries, notably as a result of lower emissions in Germany. Total emissions in high-income countries increased only 4 percent during this period, with Germany reducing its emissions by 18 percent.
Urbanization and air pollution
In most countries urbanization is a natural consequence of economic growth. Rapid urbanization can yield important social benefits as people gain easier access to schools, medical care, and cultural facilities. But it can also lead to negative environmental consequences requiring a policy response.
Forty-five percent of the world’s population lives in urban areas: two out of five people in low- and middle-income countries and four out of five in high-income countries (table 3.6). And the urban population grew faster (2.5 percent) than total population (1.7 percent) during 1980–95. It is easy to forget that many parts of the developing world are very urban. Most of Latin America is as urban as Europe, with 74 percent of the population living in urban areas. Asia is urbanizing rapidly, and even such traditionally rural countries as China and India now have hundreds of millions of people in towns and cities.
Increased urbanization usually means increases in air and water pollution—increases that can overwhelm the natural capacities of air and water to absorb pollution. The costs of controlling pollution and treating problems can be enormous. And pollution exposes people to severe health hazards.
Several major urban air pollutants—suspended particulate matter, lead, sulfur dioxide—are known to be harmful to health. Especially harmful is particulate matter, which contributes to respiratory diseases. Many of those pollutants come from vehicles, whose numbers are strongly linked to rising income (tables 3.7 and 3.8).
Government commitment
A crucial variable in all this, but one that is very difficult to measure, is a government’s commitment to a cleaner environment and to better management of environmental resources (table 3.9). The strength of environmental policies in any country reflects the priority assigned by its government to problems of environmental degradation—and that priority reflects the benefits expected from using scarce financial resources that have competing uses. In addition to national environmental problems, governments are increasingly concerned about global environmental issues. To address these issues, agreements have been reached, and treaties signed, on areas related to the quality of life on earth. Many recent agreements resulted from the 1992 United Nations Conference on Environment and Development in Rio de Janeiro, which attracted representatives of almost every country. The conference produced Agenda 21, which proposes an array of actions to address environmental challenges. But perhaps more important, the conference caused countries to develop comprehensive environmental policy frameworks.
Government policies can make a difference, stimulating positive links between economic growth and the environment. And monitoring what is happening to the environment can guide policy toward a future that is more economically and environmentally sustainable.