Topic

C: "Given that the UNs Sustainable Development Goals (SDGs) redefine

sustainability as a wholistic development concept which includes cities, jobs, education, health,
inequality, industry and economic growth, 'sustainability' is now just synonymous with good
economics. Discuss.

Modern economics has moved away from a science of production and allocation and has
incorporated other factors into account. One definition of economics by Arun Balasubramanian
(1984) included environmental and social repercussions of economic activities that impact
production and distribution. This interpretation of good economics now encapsulates the
management of the natural and social environments as underlying factors that promote an
economy. With the expiration of the millennium development goals (MDGs) of 2000 which
aimed to evenly distribute wealth (Gupta and Vegelin, 2016); the United Nations General
Assembly created the Sustainable Development Goals (SDGs) setting 17 global goals
embracing environmental sustainability to alleviate poverty and to promote economic growth
by 2030 (Rodriguez, 2012). The UN defined sustainability as optimising ecological, social and
economic aspects for the present without compromising the needs of future generations (Gupta,
2016). These redefined goals of sustainability are now synonymous with the goals of good
economics.

To further illustrate this notion, key indicators of economic growth such as GDP (Gross
Domestic Product) per capita, infrastructure investment and environmental improvement can
be achieved through the SDGs. The increase in GDP up to a basic threshold limit does not lead
to further increases in well-being (Pretty et al, 2017), some of the goals of the SDGs focus solely
on wellbeing which eventually leads to GDP growth. Capital investment in the public domain is
capable of increasing resources and enhancing productivity, alleviating to economic growth
(Munnell, 1992). The new wholistic view of development set by the UN also incorporates the
built environment as an important factor leading to sustainability and economic prosperity
(Dhrifi, 2015). As an emerging sector in an economy, advances in the environmental space such
as renewable energy or green cities also has a significant impact on economic growth
(McKendry and Janos, 2015). Development of a green economy is another underling goal of the
SDGs aimed to promote communal health and economic progression. Although these economic
benchmarks are universal, one could argue that they are outdated and are not presentative of
true economic performance. Despite this limitation, utilising historical data sets and new
comprehensive data sets is recommended for an all-inclusive economic analysis (Grossman,
Mack and Martinez-Garcia ,2014)

The United Nations SDGs goals can enhance the wellbeing of its people resulting in an
increase in GDP per capita - a key indicator of economic performance. The concept of GDP per
capita has been utilised to rank economies since its introduction during World War II (Coyle,
2014). By definition, the indicator measures the economic welfare of an individual; thus, high
growth and growth levels is a principal aim of economic policies (Harvie, 2009). One limitation
of measure GDP is that it does not take into consideration other important elements of an
economy such as well-being. An alternative to this is the Human Development Index (HDI)
which merges GDP per capita with literacy rates and average life expectancy (Harvie et al.,
2009). Using these two new indicators, it can be shown that an increase in literacy rates and
better healthcare systems can also contribute to an increase in GDP. The United Nations has
recognised that these two measures are important for sustainable development and have
included them in their SDGs. Goals number three and four set global targets to improve health
and education levels for all people in order to function well and contribute to society (United
Nation, 2016). Swift (2011), has found that improvements in health of a population can result
in long-term sustainable growth in GDP. To quantify this relationship, Swift determines that
with a 1% increase in life expectancy, there is a result in an average increase of 5% in total GDP
per capita in the long run. This correlation is important for policy implications whereby a focus
to promote health may cause simultaneously improve economic growth. In addition to health,
literacy rates can also have a positive impact on economic growth. Sekman and Toptas (2015),
analysed the role of education on economic progression in Turkey from 1990 to 2012. The
study examined a positive relationship between education, growth of labour force and
ultimately GDP growth displaying their formational relationship to be at 91%. The importance
of education in the is enabling a population to absorb and utilise technology to promote
development (Sekman and Toptas, 2015). With the spread and access of knowledge, larger
contributions can be seen to the labour capital of an economy thus resulting in higher GDP per
capita and self-sustaining growth. By improving health, education and overall wellbeing of a
community the population can be well placed to contribute to economic growth. Thus,
sustainability defined by the SDGs promoting health and education are paramount to
optimising GDP per capita universal indication of economic progression. Human capital alone
is not sufficient for growth, the need for capital assets is equally as important.

Investment in new technology and infrastructure is another objective of the SDGs which
can result in long-term sustainability and economic growth. The ninth goal of the SDGs
encompasses innovation and infrastructure which are key drivers for both economic growth
and sustainability. Firstly, technology innovation is a natural progression from human capital,
actively changing built environment. The positive shifts in human capital ensure that sufficient
resources are allocated to the research and development, generating new operating procedures
(Gimnez and Sana, 2007). Innovation has the capacity to drive an economy into economic
growth and long-term sustainability. Evidence of such drive can be seen through countries such
as Austria, Finland and Sweden during 1995 and 2006 (Afonso, Monteiro and Thompson, 2014).
Innovation in these countries enable them to address complex socio-economic problems and to
generate new sustainable sources of economic growth (Afonso, Monteiro and Thompson,
p.672 ,2014) As a wholistic innovation economy, new technology can be found in various
sectors such as education, agriculture and energy ensuring long-term sustainability. There is
multiple flow on effects of an increasingly innovative economy; one of which is macroeconomic
stability. Dhrifi (2015), contends that if local skills and processed are optimised, there is greater
incentive for government and foreign investment. Investment in infrastructure is inadvertently
another long-term objective of the SDGs. Human capital and technology can further prosper
with greater levels of government expenditure and investment (Afonso, Monteiro and
Thompson, 2014) Figure 1 Illustrates the governments role in infrastructure and economic
prosperity demonstrating the slow but increasing yield of investment in developed countries.

Figure 1: General government final consumption expenditure (% of GDP)
Source: World Bank (http://data.worldbank.org; accessed in May 2017)

Various forms of infrastructure can contribute to the wellbeing of a society. As a

result, a carefully planned government investment strategy is essential to the long-term
sustainable needs of an economy (Munnell, 1992). The United Nations new sustainability
goals which incorporate infrastructure in all shapes and forms is thus similar to the
economic indicator of government investment. Combined with technology and
infrastructure, the SDGs provide a forward direction to grow with the digital age-
adapting and becoming truly sustainable. Despite the need for capital investment,
different countries are focusing on different areas on research and development. Some
countries have taken another step beyond standard innovation and infrastructure and
have been developing green technology.

Green Development has recently become an indicator of economic proficiency to
which can be achieved through the SDGs set by the United Nations. Following the
downturn of the economy in 2008 due to the global financial crisis, it has been shown
that the current model for development was unsustainable. Shortcomings was found in
both economic and environmental sectors of a nation which is detrimental for long-term
growth (Samans, 2012). Developing countries with an increase in population growth and
resource consumption added extra strain on natural resources already exhausted by
developed countries. As a result, the world saw increases in commodity prices, scarcity
of resources and a degrading natural environment (Samans, 2012). Today, economic
growth and sustainability is no longer separated but has merged into one paradigm of
development. Sustainable practices have come in various forms such as carbon emission
reduction, waste reduction and improved public services. Leaders in developed countries
now view greening as a way to create competitive advantage (McKendry and Janos, p.46,
2014). Doran and Ryan (2014), analysed how eco-innovation can contribute to
sustainable development in a firm. Eco-innovation is defined as any form of product,
process or organisational innovation that contributes towards sustainable development
(Doran and Ryan, p.1110, 2014). Since there were many activities that can be labelled as
eco-innovative such as carbon or waste reduction; the study demonstrates that certain
combinations of technology yield the highest outcomes. The impact of eco-innovation can
result in lower costs, increases in productivity and lower environmental impact.
Evidently, green development is now a benchmark for good economic growth and
performance. The United Nations SDGs incorporate environmental sustainability and
green technology in multiple objectives. These objectives seek to improve a wide variety
of sectors ranging from buildings, material consumption, energy usage and natural
preservation. Sustainable living set by these goals and the new era of green economics
are thus similar and therefore synonymous. To further consolidate the need
environmental development, the SDGs also yield significant implications for global
environmental governance (Stevens and Kanie, 2016). These global targets have
transformed government institutions to incorporate sustainability practices into their
economic policies setting limits and targets on organisations creating positive change
on the operating nature of an economy.

It can be argued that the aforementioned economic indicators are not
representative of good economics and thus do not align with the United Nations SDGs.
Due to the changing dynamics of an economy, long-term utilised economic indicators of
GDP growth and infrastructure investment can be outdated. Existing economic and
financial benchmarks may not take into consideration modern metrics such as
environmental or social externalities. Thus it can be contended that it is imperative to
create new universal performance indicators in place of the old metrics (Pittman and
Wilhelm, 2007). Environmental protection expenditure account (EPEA) is one example
of a modern metric aimed at allocating economic resources with the intention of
environmental protection (Broniewicz, 2007). Nevertheless, the long-standing metrics
economic performance can still hold value. With historical datasets and quantified
numbers, it is possible to observe trends and relationships through time or by country
comparison. The need for historic data is useful to identify and evaluate the effectiveness
of current policies. If connections can be drawn to the positive or negative impact of a
policy, action can be taken accordingly. As a result, it is vital to utilise deep-rooted
economic indicators to observe trends whilst simultaneously creating newer
benchmarks.

Ultimately, sustainability redefined by the United Nations SDGs goals is identical to
that of good economics. Economics has developed into an integrated idea of financial,
social and environmental areas that make up an economy. Similarly, sustainability
outlined by the United Nations doctrines a holistic approach to development that
incorporated education, health, innovation, infrastructure and green technology. In order
to further link the two concepts, long-standing economic indicators of GDP growth,
capital investment and green innovation was proved to be achieved through the SDGs.
One of the core competencies of the SDGs is to promote human wellbeing through
education and health. Studies have shown that population wellbeing increases human
capital, thus leads to increases in GDP per capita. Measuring technological innovation and
infrastructure investment in an economy is another key economic indicator that can be
achieved through the SDGs. The United Nations recognises that human capital alone is
not sufficient enough to drive an economy to be sustainable. Consequently, another
cornerstone of the SDGs is focused on improving the built environment. Finally, the
degree of green technology can evaluate a nations economic performance and promote
efficiency gains. Accordingly, there is a significant focus on green technology which is a
key impetus for sustainable development. In essence, the term sustainability has now
become embedded with economics- shifting the need for sustainability from voluntary to
mandatory.

Word Count: 2008

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