GDP and Depleting Natural Resources

The GDP system’s absurdities do not end with social evils. Mindlessly following this system has also wrecked havoc on the environment. Many arguments have been made against the GDP system from an environmental point of view. There is no questioning the fact that the resources of earth have been severely depleted in the recent past. The debate remains as to whether GDP has significantly contributed to this depletion and if so how. In this article, we will make an attempt to understand how the economics and environmental sciences are intertwined and how following a faulty economic system has created an emergency scenario as far as the environment is concerned.

Let’s first begin by looking at the alarming situation that is facing us.

Alarming Scenario

They say that numbers tell you a story. In this case, the story being told by numbers is a disturbing story. Consider the fact that 40% of the world’s forests have been destroyed compared to the 1700’s. The world therefore has 40% less green cover. Is it any surprise that many species are facing extinction and the planet is battling global warming!

Also, studies have indicated that the world supply of fossil fuels is expected to be depleted by the year 2057! That is within the lifetimes of most people in this generation. True that discovery of shale oil and the “fracking” technology may extend this depletion by a decade or so. However, the number still is disturbing to say the least considering that most of energy needs are met by fossil fuels.

The groundwater reserves in many parts of the world have been severely dwindling or polluted and same is the case with reserves of precious metals like silver which have extensive industrial usage as well.

Doomsday Predictions

Pretty much every other day, some reports showcase these alarming numbers one after the other. There are so many of these doomsday reports that many people have simply stopped paying attention to them. However, the threat is real. What’s even worse is the fact that the human race seems to be on a path where it cannot stop itself. These statistics and the threat they pose have not led to the reduction in the usage of natural resources. Instead, data would show you that usage of these natural resources has been accelerated in the past decade or so.

The Cause: Lust for Exponential Growth

So, how does the GDP system have anything to do with any of this? Well, consider these questions?

  • Who is cutting down forests?

  • Who is using and polluting groundwater?

  • Who is using up fossil fuels at an alarming rate?

  • Who is using up scarce metal resources at an accelerated rate?

Well, the answer to all these questions is “humans”. Now, why are human beings accelerating the path to their own self destruction?

Now consider the fact that we live in a society that wants exponential growth. If we built 100000 homes last year, this year we have to build 5% or 10% more. So year on year we have to keep growing. Same is the case with vehicles, computers or pretty much anything that is produced. The more production there is, the higher the GDP and hence this mindless pursuit of more production.

Note that the impetus has shifted from efficient utilization of resources to excessive utilization of resources.

Is The GDP System Responsible ?

Human beings, their organizations and even their governments are highly influenced by the GDP system. The share prices of companies rise or plummet based on this system. The people in power remain in power or are replaced based on this system. Is it therefore any surprise that governments all over the world are focused on ensuring that the GDP number never ever comes down? This focus works to the detriment of the environment which bears the brunt of all the wastage.

It would therefore be valid to say that in a world without GDP, economics would focus on economizing. The focus would therefore be to ensure proper utilization of scarce resources. The GDP system changes the meaning of growth from “efficiency” to “excessiveness” and hence is the main culprit behind the sad state of affairs pertaining to the environment.

GDP vs. the Planet!

Since we have established that he GDP system and the environment are simply incompatible, it is important to realize that these systems are opposed to each other. This means that as long as the GDP system remains in place, the environment would always be under threat. The solution therefore is to replace the GDP system. This may sound radical considering the importance that has been given to the GDP system. However, the voices demanding change are no longer obscure and distant. Top economists of the world are of the opinion that GDP needs to be replaced. Hopefully we will be able to witness this change in time before human beings go too far on the path of self destruction.


❮   Previous  Article Next  Article   ❯

Authorship/Referencing - About the Author(s)

MSG team comprises experienced faculty and professionals who develop the content for the portal. We collectively refer to our team as - “MSG Experts”. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.