The current neoclassical economic theory, which more or less reflects upon the development policies which are built, ignores ecological and entropic limits and constraints to economic growth. What we call as the ‘standard view’ of the mainstream economics rests on the point of technological capabilities and explorations to overcome all social and environmental problems. Drawing from the readings of Environmental Economics as a subject, it is clear that economic growth and conservation are more or less parallel streams of thinking. However, these principles have a wider scope of discussions, where resource conservation and economic growth can be collided to build a safer environment along with market capabilities.
Currently, economics only recognizes the value of things for utility, or a marketable commodity for profit. When we discuss exchange value and price tagging, we see that market capabilities are scaled to limitless requirements for natural resources. The idea of nature as a free gift, where the value or cost of extraction and production is negated in economic values is a problematic design to begin with. Damage, depletion or degradation of natural resources is considered in neoclassical economics to be an unimportant ‘externality’ in the dominant economic theory, because it assumes that human economic activities are grossly independent of the natural resources. Today environmental inequalities and injustices are not just limited to exposure to contamination, toxic chemicals, and massive waste dumping. They also exist in the allocation of environmental goods and services. The concept of ecosystem services and ecological value with a non-anthropocentric ideology is difficult to establish in the world of economics. The definition of sustainable development provided by Brundtland Commission Report is a true example of balancing resource consumption with sustainable economic growth. However, this has several loopholes and flaws which bring out how resource consumption is being offset by different means for the requirement of production.
In the short term, the benefits of economic growth are many. The growth of businesses and nations could result in large profit making systems, which would ultimately lead to creating jobs, expanding resources and improving the quality of life. Many economists even argue that technology has enabled the scope of limited resource consumption and maximum exponential growth through products, global travel, rapid communication and information along with efficiencies of global trading and market opportunities. Economic growth derived from all these technological creations does indeed feed on itself, as materialistic consumerism remains unsatisfactory to almost everyone in the loop of the market. Yet in order to grow, the economy also feeds on natural resources and emits waste that pollutes all natural systems and threatens ecosystems which ruin the niches for many species, including humans themselves. The endless use of resources such as fossil fuels, oil, and gas facilitate economic growth along with technological advances that extract large amounts of energy from the Earth while polluting it at the same time. These counterbalancing forces neglect the foundation upon which economic growth is built, and in the long run will create a sinkhole which swallows up the basis of economy, environment, and society which are connected in more than one way. The environment is harshly affected due to the release of toxic by-products with no sustainable means of removal along with high carbon based residuals. The balance still remains a question mark, because it is impossible to choose what can be eliminated as a system by itself. However, economic growth highly depends on natural resources, which in turn allows exploitation and depletion to occur at a faster rate.
Coming to a more positive approach, which is very limited and the impact of which is yet to be assessed on a large scale is the principle on which circular economy exists, which economics is slowly approaching towards. The idea of a circular economy provides partial solutions to natural resource consumption with limits, where recycling, reusing and reducing the consumption of new resources is implemented. This stresses on the re-utilization of waste as raw materials for other products. Examples across the world from countries like Sweden and New Zealand prove that this is a sustainable process, in both theory and practical application. Resources such as iron, aluminum and steel which have drastic rates of mining and irreversible impacts on the environment can be re-utilized from existing products in the market by itself. However, this still doesn’t include the implications of energy consumption and carbon footprint levels. Accordingly, the system needs to be restructured in terms of principle as well as realistic, inclusive and considerable impact analysis.
The question of limited natural resources and unlimited economic growth still remains a grey area, as there are still no concrete solutions to curb the problem of environmental exploitation. Although there are new approaches economics takes into consideration and is gradually adopting, the idea of natural resources and economic growth remains a huge challenge. Humans depend on economic opportunities for a sufficient and comfortable lifestyle, whereas if and when the natural resource base diminishes to an unfathomable existence, we might not have an economy at all which exists, to depend on the same.