Sustainable growth revisited: technology, economics and policy

This paper discusses the issue of whether environmentally sustainable growth is a feasible aspiration and, if so, how it might be brought about and how the levels of such growth would relate to those currently being experienced. Given the substantial accumulating evidence of serious environmental degradation from current patterns of economic activity, it is clear that these will need to be substantially changed if the ability of the natural environment to support large human populations is to be sustained. Such changes will need to be brought about by strong, sustained policy. Evidence presented in the paper suggests that the technological means of transforming current activities exist, and further evidence is also presented that, given efficient policy, these technologies may be widely implemented with relatively low costs. The key issue is the nature, strength and consistency of the policy signal. While environmental tax reform emerges from the analysis as probably the most promising policy approach, the paper ends with a rather sombre conclusion that, despite this policy instrument's benefits, there are a number of political reasons why it is likely to be difficult to introduce.