The Link between Economic Growth and Environmental Quality - Essay Example

Ethics A Paper Submitted to In Partial Fulfillment Of the Requirements for the By (Date) Link between Economic Growth and Environmental Quality (Haiti and California) Outline Introduction An overview of the link between economic and environmental quality Discussion Background of Haiti and California economic indicators and state of environmental Differences between California and Haiti economic growth Link between economic growth and environmental quality in both Haiti and California Conclusion Summary and General View Recommendations Introduction Environment often plays a critical role in determining a nation economic growth performance, since it determines the outcome of such growth on public health, defines the value of its natural resources and land productivity, in addition to determining the level in which that state can become incorporated with the global markets. In that regard, this paper seeks to compare the outcome of economic growth on the quality of environment in both Haiti and California. Haiti and California presents two divergent economic growth performances due to differences in structural stability and macroeconomic constancy. This is because unlike California, Haiti has seen numerous political and environmental shocks that have severely hindered its growth. Nevertheless, economic growth in both California and Haiti comes with negative environmental outcomes comprising water and land pollution, greenhouse gas emissions as well as destruction of ecological landscape. Discussion Background Haiti economic growth largely centers on agriculture given that majority of the island is mountainous. Most of Haiti lush rainforests has been cleared for small-scale farming and charcoal burning, hence leaving only 28.3% of its land mass to be good for arable and commercial farming1. Agriculture accounts for the nation 25% of its GDP production. As a result, two thirds of Haiti labor-force still lives on small-scale subsistence farms which has resulted in economic stagnation, that has made Haiti the poorest nation in the western hemisphere. Hence, the nation has no substantial industrial or manufacturing sector, which then makes 40% of Haitian population to be unemployed even as the average income for most Haitian is less than $200 per year2. Haiti economy is largely driven by informal small-medium enterprises, which accounts for 80% of the nation new jobs. Nonetheless, the textile industry forms the second largest economic activity after arable farming. On the other hand, California has a GDP per capita income of $60,190 per year with the unemployment level standing at a much lower level of 7.4%3. Secondly, California has a diverse and highly skilled workforce working in different sectors unlike Haiti, and varies from high tech, to retail and service industry, to manufacturing, biotech, entertainment, to agriculture. Thus, before the 2007-2008 financial crises, California experienced per capita GDP growth that surpassed even the United States per-capita GDP expansion. In particular, the state share of the entire California manufacturing output grew from eight to thirteen percent ever since strong environmental policies known as California Environmental Quality Act were introduced in 19704. Link between Economic Growth and Environmental Quality California unlike Haiti offers a more enabling atmosphere for private investment due to political stability and steady economic conditions, such that the growth is diversified with outward oriented approach. California economic growth is based on innovation, capital formation and enhanced productivity growth. California has managed to increase its internal trade considerably, which has in return minimized pollution because of greater competitive pressure that drives greener production technologies5. Thus, the higher trade levels and openness of California economy has stimulated better land management practices, preserve the quality of its water resources, in addition to reducing its per capita emissions of greenhouse gases as compared to Haiti. California as compared to Haiti does not just have very strong environmental protection laws but strictly enforces such laws on the business community. These laws jointly referred to as California Environmental Quality Act are encompassing with numerous procedural requirements for nearly all forms of land use projects, from housing to mining, to renewable energy, to transportation sector6. Therefore, California has stringently promoted economic development with a lot of concern for its environment and more so concerns regarding the quality of life of its residents. On the other hand, Haiti does not just face poor economic growth but poor management of its environment and it is considered to have the worst environmental degradation problem of any nation in the western hemisphere7 . This is largely due to unsustainable agricultural practices and the negative outcomes of global warming. The nation faces grave environmental challenges due to deforestation, especially from charcoal demand. Its massive population growth that currently stands at eight million has resulted in massive deforestation, especially due to the strong need for land to produce food and the demand for charcoal in its urban centers. Hence, majority of Haitian depends on what they harvest from small parcels of land in order to survive unlike California that has a mixed based economic landscape. Poverty is one of the major drivers of Haiti environmental degradation particularly due to insufficient technical knowledge or managerial expertise in cleaner production methods, as well as pricing policies and disincentives that weigh down return-on-investments in cleaner production systems8. Most notably, the extensive reliance on nonrenewable fuels like charcoal and diesel has resulted in negative environmental outcomes particularly soil erosion, air contamination, and destruction of water catchment areas. On the contrary, California is not just self sufficient in energy production but has focused so much on renewable energy sources as compared to Haiti. These forms of renewable energies ranges from solar, wind, and nuclear energy such that even California ports are leading the globe in terms of clean growth, especially through land-side electrification of the ships that dock in its ports (Kotler 2011). Moreover, Haiti unlike California urban and industrial development has resulted in the sacrificing of environment with development. As a result, Haiti ecosystem is largely broken such that simple outcomes like clogging of solid waste in urban waterways or Landfills being overused is a major problem. Even the major industrial park utilizes diesel fuel which is a major air pollutant considering that it serves mostly the garment manufacturers. Presently, majority of the economic growth in Haiti is focused on tourism. However, neither the government nor the private sector is investing in environmental cleanup operations or preservation9. For instance, it has become difficult for the nation to lure tourists from Dominican Republic due to tourists being turned off by wastes like plastic bottles that are being washed up on the shores of their hotel beach. Furthermore, commercial fishing practices have resulted in negative outcomes of its coastal-marine resources. Besides, Haiti experiences extensive damages caused by hurricanes, earthquakes and soil erosion and this effects have exacerbated the economic situation by destroying or disrupting businesses and their supporting infrastructure. However, this entire condition cannot just be blamed on the government economic policies but also on the poor state of the nation citizens. Although the expansion of Haiti capital and the adjustments in its industrial structures have resulted in massive rural to urban migration, a considerable number of city residents live in absolute poverty. The deprived population in Haiti does not have the power or economic might to push their governments to enforce stringent environmental laws, especially considering how recent destructions caused by earthquakes and political instabilities have occupied the citizens’ minds. Evidently, even the capital city has open disposal of garbage, human waste and bad fumes due to the open burning of trash. In California, previous years of strong economic growth has resulted in a largely financial stable public, which has inserted more pressure on public officials to observe stringent environmental regulations. One major outcome of this empowered public is the implementation of the first corporate utility projects in US that are non-hydroelectric. In particular, the economically empowered public ensured that proposals to construct new coal-fired power plants are halted and that the state natural-gas power plants are dry-cooled rather than being wet-cooled in order to reduce wasting and contaminating its water resources10. In essence, California has focused so much on economic growth that comes with environmental and social sustainability as compared to Haiti, with more emphasis being placed on preservation, rehabilitation and redevelopments. For instance, California most notable green economic projects are the sustainable urban centers such as San Francisco, whereby even the transportation systems are based on sustainability model 11. The focus of california economic growth is anchored on clean-fuels, demand managment, technology imrovements, and consumer friendly pricing polices. For instance, California is aggressively reducing the environmental impact of its massive transportation system through enhancements of tele-comunication infrastructure such as telecommuting and teleshopping. On the contrary, Haiti applies the traditional system of transportation which is based on inefficient vehicles that consume more fuel with more pollution, and a lack of a coordinated and advanced public trasnport system like metro trains or green buses. Additionally, California has highly advanced disposal systems of industrial chemicals and urban runoffs, with adequate wastewater treatment facilities. Thus, unlike Haiti, California does not face massive water pollution due to animal and human waste, or the over usage of fertilizers. However, critics argue that in recent years, the stringent environmental laws in California have hampered economic growth particularly in manufacturing production due to high cost for setting up projects. This condition has also been exacerbated by the many regulatory requirements that new ventures have to pass through in order to receive environmental clearance permits and this has translated into California having the most expensive services and products. For instance, California has extremely high housing prices not just compared to Haiti but most of the US states due to the environmental restrictions placed on new development projects. Furthermore, a flood of environmental claims lawsuits are now being used to halt or delay business developments, hence costing jobs and undermining the current sluggish economic recovery. Despite the challenges facing Haiti , major donors particularly USAID and UN are supporting the development of industrial parks such as the North-Park project which is going to host numerous clean production industries like wastewater treatment plant, residential buildings, and more greener power plants 12. Conclusion This paper concludes that Haiti and California have substantial differences that then generate different outcomes of economic growth on their environment. This paper also observes that the link between environment quality and economic growth varies with the source of growth. This is because different forms of economic activities produce dissimilar pollution outcomes and income levels. In particular, the paper observes that the highly massive and advanced trade patterns in California are responsible for the state cutbacks in pollution levels as compared to Haiti. This is because they encourage innovation and advanced levels of natural resource management. Secondly, the meager environmental regulations in Haiti have resulted in more pollution intensive-production methods as compared to California, and this is evident by deforestations, as well as intense air and water pollution. In Haiti, the mushrooming of industries coupled with growth of cities has resulted in poor waste management, particularly in the capital Port-au-Prince where there is not even a viable waste management system. What Haiti needs is trade liberalization which will enhance investments by the private sectors and in return result in less pollution intensive production measures. On the other hand, California needs to reduce some of its environmental regulations in order to keep pace with the post 2008 crisis economy, since it is losing the competitive edge for setting up of new industries. Bibliography International Monetary Fund. Haiti: Poverty Reduction Strategy Paper - Progress Report. Washington DC: International Monetary Fund, 2012. Kotler, P. "Reinventing marketing to manage the environmental imperative." Journal of Marketing 75, no. 4 (2011): 132-135. Meier, Gerald M, And James E Rauch. Leading Issues in Economic Development. 7. New York: Oxford University Press, 2003. Philips, Peter. The Economic and Environmental Impact of the California Environmental. Working Paper, Salt Lake City: University of Utah, 2013. Smith, Keith. Environmental Hazards: Assessing Risk and Reducing Disaster. New York: Routledge, 2013. U.S. Bureau of Labor Statistics. "Economy at a Glance." 2014. http://www.bls.gov/eag/eag.ca.htm (accessed 12 8, 2014). USAID. "Economic Growth and Trade." August 13, 2014. http://www.usaid.gov/haiti/economic-growth-and-trade (accessed 12 8, 2014). Read More