What we are doing to the forests of the world is but a mirror reflection of what
we are doing to ourselves and to one another.
- Mahatma Gandhi
Sustainable development is about enhancing human well-being through time. What
constitutes a good life is highly subjective, and the relative importance
accorded to different aspects of well-being varies for individuals, societies,
and generations.1
But on some elements most people could probably agree. Having the ability and
opportunity to shape one's life-which increase with better health, education,
and material comfort-is certainly one of them. Having a sense of self-worth is
another, enhanced by family and social relationships, inclusiveness, and
participation in society. So is enjoying physical security and basic civil and
political liberties. And so is appreciating the natural environment-breathing
fresh air, drinking clean water, living among an abundance of plant and animal
varieties, and not irrevocably undermining the natural processes that produce
and renew these features. Indeed, peoples' self-reported happiness and
satisfaction with life are closely associated with all of these factors. 2
Society's ability to enhance human well-being through time depends on choices
made by individuals, firms, communities, and governments on how to use and
transform their assets. They might cut down forests to build dams and other
physical infrastructure or to make way for commercial agriculture or urban
expansion. They might clear mangroves to build shrimp farms. Or they may
conserve forests and mangroves to maintain important natural processes or to
support tourism. Enhancing human well-being on a sustained basis requires that
society manage a portfolio of assets. Different assets have different
characteristics that limit the extent to which they can substitute for one
another in production and in human well-being.
This chapter discusses the broad concerns that need to be taken into account
when balancing the objectives of economic growth and attending to environmental
considerations and their social underpinnings in the short to medium
term-recognizing that over the longer term prolonged neglect of environmental
and social assets is likely to jeopardize the durability of economic growth.
More specifically, it addresses the following questions:
What is meant by sustainable development and how can progress toward it be
measured? Although the adjusted net savings indicator is a potentially useful
headline indicator at the aggregate level, indicators are most useful when they
can be disaggregated and used to diagnose and ultimately address specific
problems.
Why the need to manage a broader portfolio of assets? What choices can and must
be made between creating, maintaining, and restoring different assets as part
of a long-term, dynamic view of sustainability? Although assets are
complementary and substitutable to a certain degree, they all need to be
managed, since once the quality or level of an asset falls below a threshold,
there can be little further substitution without jeopardizing the productivity
of other assets, as well as overall production.
What are alternative development paths to those followed by developed
countries? What tradeoffs and priorities are justified, and when? By taking
advantage of technological innovations and by learning from past mistakes of
others, countries today have the option to manage their portfolio of assets in
a different way to ensure they are on a more sustainable development path in
the long term.
How to address the almost endemic overuse or underprovision of environmental
and social assets while sustaining growth? Wherever spillovers
(externalities) exist, there is a coordination problem that needs to be
dealt with by correcting market and policy failures. This can be done by using
a variety of mechanisms such as command-and-control regulations, harnessing
market forces, and improving supporting institutions.
