Sustainability: Will There Be the Will and the Means?

Abstract

In this chapter we argue that a strong effort toward new technologies and investments can allow us to sustain economic growth without endangering the environment. We define this effort toward a new sustainable paradigm as consisting of a mix of renewable sources, energy efficiency, and energy savings issues discussed by others in the present volume. The crucial question, of course, is how much investment is required to achieve a sustainable paradigm and whether it is a plausible sacrifice compared with similar past investments. We argue that the difficulty in finding feasible solutions to address climate change is a political, not an economic problem. The lack of political will and willingness to cooperate, however, is not an exclusive characteristic of the climate change, as exemplified by the recent failure of Copenhagen meeting in December 2009. The lack of cooperation is typical of many vexing global questions related to human rights issues, trade agreements, financial capital taxation, offshore tax havens, property rights, and the safeguarding of biodiversity. Each of these issues requires time before a solution can be found. For example, negotiations to admit China to the World Trade Organization rather trivial matter compared to climate change took over 15 years. Finally the chapter argues that the size, intensity, and scope of policies required to achieve future sustainability are similar to those employed in the past to sustain economic growth, and hence there is no need for radical measures or a major departure from our current socio-economic system.

Keywords: Markets, Institutions, History Lessons

JEL Classification: Q28, Q42