With the onset of the worst pandemic in modern times in terms of global reach, the time has arrived for a new economics: a new model of economy driven by resource sustainability, human welfare, and a healthy environment.
The idea of gross domestic product as panacea for economic and social prosperity is worn. Economic measurements must place at the core intangibles such as a healthy environment, public health, and social welfare.
The most recent Global Biodiversity Outlook published by the United Nations Convention on Biological Diversity makes for bleak reading. The report asserts that biodiversity — the healthy balance between plants, animals and microorganisms — is essential to addressing climate change, ensuring long-term food security, and even preventing future pandemics, but that the world is headed the wrong direction. In fact, the world is missing every target that has been established to protect humanity from unsustainable consumption and unsustainable living.
All societies, including the Virgin Islands, must step up to the plate if the prosperity and welfare of residents is to improve after this horrible pandemic.
The fact remains that capitalism and business success in most sectors — agriculture, industry, energy, transportation and retail — has come at the expense of the environment. Environmental destruction is moving at an unsustainable pace. Natural disasters are becoming much more common and more devastating.
Hurricane Irma was a lesson of what happens when native populations of small islands sitting in the world’s seas and oceans fail to understand the ramifications of climate change.
Even the present pandemic could have its roots in climate change, which may have made it easier for animal viruses to enter the human genome.
Climate change and the resulting environmental havoc destroy business sustainability by disrupting supply chains, tanking consumer demand and consumer confidence, and driving economic contraction. For example, businesses in California have faced massive wildfires resulting in rolling power blackouts and intense heat waves. This has disrupted business activity.
Meanwhile, the world’s largest wetland area — the Patanal in Brazil — is on fire, and there has been severe flooding in Asia and Africa. Then there is the conundrum of rising sea levels and the threat to coastal life, towns and cities in the Indian Ocean and Pacific.
Consequently, placing sustainability at the heart of economic governance is necessary. Sustainability today is synonymous with good economics. It is clearly in the social and economic interest to avoid the proliferation of manmade natural disasters.
Sustainable economics is placing environmental sustainability and human welfare at the centre of scarce-resource management — another term for economics.
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