Postgraduate lecture to the students at Chulalongkorn University's Enviornment, Devleopment and Sustainability course. Lecutre explores: (i) Exploring economics for sustainable development (ii) Growth versus development (iii) Development options: measuring what matters and (iv) Assignment outline on sustainable development

1. Why study
economics for
Sustainable
Development? A
question of growth
Dr Leonie Pearson
Environment, Development and Sustainability Seminar at
Chulalongkorn University, 15 October, 2020

2. Welcome – I’m
Leonie
• Ecological Economist
• Senior Research Fellow at the
Stockholm Environment Institute
• Work on variety of areas; water,
urban, landscapes, marginalized
groups, BioEconomy,
• Published over 30 journal articles,
150 reports, co-edited 2 books.

3. Outline 1. Introductions & checking in with
what we know about economics
for SD?
2. Poll
3. Exploring economics for
sustainable development
4. Growth versus development
5. Brainstorming what is the
development we want?
6. Development options:
measuring what matters
7. Assignment on sustainable
development
8. Final survey
To engage in this seminar we will
use chat box, raising hands,
answering questions, polls, surveys
and interactive parts…
• EDS_Lecture
• Thu, Oct 15th, 2020 05:00 PM
• To participate in live polls,
contribute questions and view
live results access Vevox from
your web browser
https://vevox.app/m#/1625873
78
• Alternatively download the iOS
or Android app
https://get.vevox.app
• Meeting ID: 162-587-378

4. Shared responsibility for a good seminar
• Providing clear structure
• Engaging information
• Opportunities to engage
• Space to learn
• Critically reflect on seminar
• Engage
• Proactively provide input when
requested
• Work with peers to share
knowledge and ideas

5. To learn
problem-
solving, the
student
works on
problems

6. Checking in
on
economics
for SD

7. Poll:
sharing knowledge

8. Exploring Economics for
Sustainable Development
Introduce general definitions and concepts of the field of economics and
contrast neo-classical economics with ecological economics.
Compare and contrast growth and development.

9. What is
Economics?
Economics is the study of the allocation of
limited, or scarce, resources among
alternative, competing ends. In a sense
economics aims to understand what “we”
desire and what we’re willing to give up.

10. Economic Inquiry
Three critical questions of economic
inquiry:
1. What ends do we desire?
2. What limited, or scarce,
resources do we need to attain these
ends?
3. What ends get priority,
and to what extent should we
allocate resources to them?

11. Many
branches of
economics
Orthodox Economics
• Marco, micro
economics, natural
resource economics
• Dominant paradigm
• Neoclassical economics
• The mainstream for
policy decisions
• Focuses on marginalism
• ‘old’ paradigm
Heterodox Economics
• Feminist, ecological,
circular, … economics
• Post-classical
economics
• Radical political
economy
• Real world economics
• ‘new’ paradigm

12. Neoclassical
Economic
School of
Thought
• Favors continuous growth to provide all desired
goods and services demanded by the market.
• Pareto efficient - when there is no other
allocation in which some other individual is better
off and no individual is worse off. (This bypasses
questions of justice and fairness of distribution)
• Rarely considers question 3 of economic inquiry.

13. Fundamental
Assumptions
of
Neoclassical
Economics
Neoclassical economics is characterized by
several assumptions common to many
schools of economic thought.
1)People have rational preferences among
outcomes that can be identified and
associated with a value.
2) Individuals maximize utility and firms
maximize profits.
3) People act independently on the basis of
full and relevant information.

14. Neo-Classical
Economics
key
assumptions
relevant to
SD…
- Economists maximize ‘utility’ or human
welfare. Human welfare is revealed by
market transactions and the implicit
assumption is that non-market goods
contribute little to welfare.
- Welfare increased by ever greater provision
of goods and services as measured by
market value – thus unending economic
growth is considered a legitimate and
desirable goal

15. Economics for
SD or Ecological
Economics
“Ecological economics distinguishes itself
from mainstream economics in its
preanalytic vision of the economic system
as a subsystem of the sustaining and
containing global ecosystem.”

16. Ecological
Economics
key
assumptions….
Markets do not reveal all of our
desires.
Markets do not distribute
resources justly.
Markets do not recognize
optimal scale.

17. Economics for SD
Earth Systems
Economy
Ecological Economics
Earth
Systems
Economy
Environmental Economics
(Subset of Neoclassical Economics)
Environmental Economics -> Internalizes externalities -.> Optimizes efficiency
(still a neo-classical economic paradigm)
Ecological Economics -> wellbeing -> system balance (sustainable development paradigm)

18. Three Economic
Terms on
‘development’ to
understand
Growth: measurable increase in size, or increase
in throughput.
Throughput: the flow of natural resources from
the environment, through the economy, and
back to the environment as waste.
Development: Increase in human wellbeing
without changing throughput. The
advancement of political and social freedoms1.
The increase in quality of goods and services, as
defined by their ability to increase human
well-being.
Sen, A. 1999. Development as Freedom. New York:
Alfred A. Knopf, Inc.

19. Growth vs
Development
• While growth measures an increase in throughput,
development measures the increase of prosperity, freedom,
and health.
• Growth is predominately an economic only term, while
development includes other non-economic elements
• Development can occur independent of economic growth.
Sustainable Development is development with/ without
growth

20. Three
more terms
• Scale - The relationship between the size of
an economy and ecosystem that supports it.
How close are we to ‘carrying capacity’
• Allocation - The apportionment of resources
to different goods and services. Strawberries
or Healthcare?
• Distribution - The apportionment of
resources between different individuals (in
space and time).

21. In Review
• Neoclassical and ecological economics both
study the allocation of scarce resources.
• Neoclassical economics places more faith in “the
market” for proper allocation or scarce resources.
• Ecological Economics understands that the global
economy operates within the global ecosystem and
is more focused on identifying optimal scale and
just distribution.
• Ecological Economics (Economics for SD) has a
development focus, while neo-classical economics
has a growth focus.

22. Questions

23. Brainstorm:
What is the
development
you want?

24. 10 minute

25. Sustainable
Development
Options –
“measuring
what matters”

26. National Growth - GDP
Gross domestic product (GDP) is the total monetary
or market value of all the finished goods and services
produced within a country's borders in a specific time
period. As a broad measure of overall domestic
production, it functions as a comprehensive
scorecard of a given country’s economic health.

28. Green Growth
• overarching goal of green growth is to establish
incentives or institutions that increase well-being by:
• improving resource management so as to boost
productivity;
• encouraging economic activity to take place where it
is of best advantage to society over the long-term;
• finding new ways of meeting the above two
objectives, i.e. innovation;
• Recognising the full value of natural capital as a
factor of production along with other commodities and
services.

29. Ecological Footprint
• Ecological Footprint accounting measures the demand on
and supply of nature.
• On the demand side, the Ecological Footprint measures the
ecological assets that a given population requires to produce
the natural resources it consumes (including plant-based food
and fiber products, livestock and fish products, timber and
other forest products, space for urban infrastructure) and to
absorb its waste, especially carbon emissions.
• On the supply side, a city, state or
nation’s biocapacity represents the productivity of its
ecological assets (including cropland, grazing land, forest land,
fishing grounds, and built-up land). These areas, especially if
left unharvested, can also absorb much of the waste we
generate, especially our carbon emissions.

30. Donught Economics
Is a compass for human prosperity in the 21st century, whose goal is to
meet the needs of all people within the means of the planet.
It consists of two concentric rings:
• A social foundation – to ensure that no one is left falling short on
life’s essentials.
• An ecological ceiling – to ensure that humanity does not
collectively overshoot planetary boundaries.
Between these two boundaries lies a doughnut-shaped space that is
both ecologically safe and socially just – a space in which humanity
can thrive.

31. Happiness
(Happiness Index or Gross National
happiness or Happy Planet Index)
• Measures of individual or national
happiness, as an aggregate of total
population. Multiple measures available.
• Recent report supported was on the Happy
Planet Index

32. Measuring what matters: Development or
growth?
Neoclassical Economics Ecological Economics
Economy separate to environment Economy subset of Environment
Throughout design Systems perspective
Total allocation Distribution of allocation
Growth dominant Development balance focused

33. • To understand what markets do well.
• To understand the ways in which the unregulated market is
inadequate for the allocation of ecosystem goods and services.
• To have an informed debate on growth and development
• To connect in with the dominant paradigm of policy and
decision making
• To clarify our thinking and critically reflect on the tools and
approaches available to achieve sustainable development

34. Finding out more
Contact me: Dr Leonie Pearson E: leonie.pearson@sei.org
Academic readings:
• Sen, A. 1999. Development as Freedom. New York: Alfred A. Knopf, Inc.
• Hickel, J. (2019). The contradiction of the sustainable development goals: Growth versus ecology
on a finite planet. Sustainable Development, 27(5), 873-884.
• Hickel, J., & Kallis, G. (2020). Is green growth possible?. New Political Economy, 25(4), 469-486.
• Jakob, M., & Edenhofer, O. (2014). Green growth, degrowth, and the commons. Oxford Review of
Economic Policy, 30(3), 447-468.
• Chung, R. K., Nikolova, A. S., & Olsen, S. H. (2007, July). Happiness and Economic Growth: Green
Growth as Regional Strategy for the Well-being of All. In International Conference on Happiness
and Public Policy.
• Spash, C. L. (2020). A tale of three paradigms: Realising the revolutionary potential of ecological
economics. Ecological Economics, 169, 106518.
Websites to follow
• https://doughnuteconomics.org/about-doughnut-economics
• https://www.footprintnetwork.org/our-work/ecological-footprint/
• http://happyplanetindex.org/
• https://www.oecd.org/greengrowth/
• https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD

35. Questions

36. Presentations on economics
for sustainable development
What sustainable development future do we want?
What does this world view look like? (i.e. how does economy,
society & environment link)
How would we measure this development?
30MIN IN 4 GROUPS PREPARE A 5 MIN
PRESENTATION (3
SLIDES)
ANSWER THE
QUESTIONS:

37. Presentation
assessment
Questions:
What sustainable development
future do we want?
What does this world view look
like? (i.e. how does economy,
society & environment link)
How would we measure this
development?