Matching economic and environmental futures

Matching economic and environmental futures

Any assessment of the likely condition of the Australian environment toward the year 2000 would require accounting for the impacts of world economic development and demographic change. Within this context, this paper attempts to account for the environmental impacts that may arise in relation to a global scenario characterised by low economic growth rates over the next twenty years. To narrow the context of economic development further, we consider the implications for the Australian environment of a possible economic community formed by a number of West Pacific nations.

In relation to these possible economic futures an attempt is made to estimate the economic costs required to achieve a range of fixed reductions in environmental stress. This is done by linking, within a model of the global economic system, sets of relationships descriptive of the economic structure and environmental condition in Australia. In effecting this link we consider applications of the polluter-pays principle in which certain pollution abatement measures are required of stress-producing activities.

Specifically, this model is used to compute the trade-offs between the reduction of environmental stress and the costs of control in relation to coal developments in the energy sector. The effects of these measures on the Australian economic system, in terms of measures reflecting the standard of living of the population and levels of employment, are then described. The model is also used to throw light on the question of whether the increase in the production of pollution-control equipment balances the loss of production in the industries responsible for environmental stress. An attempt is also made to address questions on the effectiveness of the polluter-pays principle recently posed on the OECD.

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