ENVIRONMENTAL SUSTAINABILITY AND
ECONOMIC GROWTH:
PARTNERS IN THE FUTURE OF THE PLANET
DAWN ANDERSON

This essay is a discussion of the effects of environmental sustainability on economic
growth. The question explored is how each can exist alongside the other. The
position taken is of the opportunity for environmental responsibility and a
capitalist, growth economy to partner in a sustainable future. The discussion
explores how excessive consumerism contributes to the issue. It also includes
information on where economists have explored for unaccounted costs, and how
they view this topic, as well as what areas of governance could address the issues
surrounding the sustainability debate. Research has been conducted for more than
forty years but to date no significant sustainability programs have been enacted by
capitalist stakeholders. Individual taxpayers absorb the cost, and most of the
actions taken to mitigate catastrophes have been by individuals. Activism is being
led by youth, whose very future is at stake. The paper concludes that capitalist
companies can make significant gains from environmental initiatives, contrary to
their current opinion. The future of capitalist profits, stakeholders and
organizations may depend on it.

It is necessary for the world to ensure that environmental sustainability and
economic growth can work together. Climate change is having a profound impact
on the economic growth of many countries. A solution for the future is possible.
Still, people must be willing to modify their ways of living to provide for the
sustainability of the environment. Environmental costs are not currently accounted
for when the market prices of goods and services are determined or included when
calculating economic growth. This non-accounting leaves taxpayers to cover the
expenses for the clean-up activities required following events that are impacted by
climate change. The realities of resource shortages, such as food, are already being

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experienced. More of these types of deficiencies are expected to follow, such as
fresh water to drink. Current "fast fashion" practices and excessive consumerism
are one way that current levels of this excessiveness can be addressed. Business
organizations ignore the costs to the environment to realize the short-term profits
from this type of consumerism. This essay will explore these aspects of the
harmonious existence of environmental sustainability and economic growth.
Although there are many other areas to investigate, those will not be addressed in
this condensed forum.
One of the world’s most successful experiments to date is capitalism 1. Our best
hope for the future is to look through the lens of such theories as sustainable
capitalism. Current trends in capitalism do not account for its costs to the
environment, which is one of the main factors in the many ecological issues
currently being faced. 2 Capitalism needs to be held accountable for damage caused
to the environment. Plastics fill our oceans, water is scarce in some areas and
poisonous in others. Excessive extraction of fossil fuels to feed the machinery that
require it are causing not only environmental damage. This extraction practice may
very well be destroying the social structure of society, as struggles occur over land
usage rights. Damage to the environment has resulted in immense profits and
wealth for a few, at the expense and poverty of many. Income inequality is at an
extremely high level in the wealthiest countries, with Canada receiving a "C" grade
against peer countries. A peer country is one that has similar living standards, such
as costs of living or healthcare quality and includes countries such as Denmark,
Sweden and Finland, who won "A" ratings. The US received a "D" grade in the
comparison 3. Economists have devised sophisticated formulas to calculate the
economy in relation to ecological costs, which consider the GDP of a region, its
population, and what value is contributed to the relevant marketplace. 4
If specific formulas for these types of calculations can be prepared to account for
these types of costs to the environment, then other methods of calculation, besides
GDP, could be created to account for economic growth in whatever way best
benefits the planet and the sustainment of life on it. For example, formulas to
calculate how efficient capitalism is at sustaining the environment or formulas for
the health or sickness of populations could be used. These formulas would account
for the impact that capitalism and the environment are having on each other, and it
would be a new and sustainable way of calculating growth. There could be
Carl Hall. 2014. The Environmental Capitalists: Making Billions by Saving the Planet. LID
Publishing.
2
David Schweickart. 2010. "Is Sustainable Capitalism Possible?" Procedia - Social and Behavioral
Sciences 2 (5) 6739–52.
3
How Canada Performs. 2013. The Conference Board of Canada. January.
4
William Nordhaus. 2011. "Designing a Friendly Space for Technological Change to Slow Global
Warming." Energy Economics 33 (4) 665–73.
1

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education put in place for tomorrow's economists and governments to understand
how to value economies in this way.
Capitalism could be at risk in an uncertain future unless governments are willing to
turn to a sustainable environmental capitalist economy. 5 Capitalism depends on
natural and human resources to create goods and services to sell. As the
environment deteriorates, these resources become harder to utilize effectively.
Natural disasters impede efficient productivity, as workers' homes are flooded or
destroyed and as organizations' facilities themselves are ruined or rendered useless
for short to long periods of time. Some areas may not recover from such disasters,
requiring organizations to look for new places to do business. The newly relocated
business would then need to hire and train new employees to get production back
up to previous levels. In the clean-up process for climate events, governments could
also require some of the businesses to provide products and services to help with
recovery, costing those businesses their profits.
A sustainable environmental capitalist economy might include, for example,
opportunities for venture capital firms to invest in green entrepreneurs or for
governments to support the diversification of their carbon-generating economies to
allow for a more certain future. As well, there is the potential for conversion of
extractive workers to green jobs, with support from government programs for
transferred salaries, benefits and accrued pensions. 6 For these types of adjustments
to be made, people must be willing to examine the kinds of consumerism they
participate in and their reliance on disposable or single-use goods. Lifestyles should
be examined to determine if quality of life can be adjusted to accept ways of living
that do not exist in our current capitalist economies. 7 Populations must be willing
to exchange these for a future in which soil can regenerate, floods can be reduced,
and wildfires can be more controlled.
A reliance on things like electricity and its associated grids impacts weather and
climate events, such as droughts, as rivers are dammed and re-routed to generate
power. The electrical networks themselves are susceptible to destruction from
winds and tornadoes, causing avoidable fires when live electricity ignites dry,
brittle trees, shrubs and undergrowth near any downed wires. Replacing electrical
grids with solar or wind-generated power, known as grid defection, reduces the
potential of these added hazards for weather-caused events. These resulting systems
are more localized and easily disconnected from those areas that are in the paths of
approaching storms. 8 They may also be less vulnerable to the rolling or mass
Carl Hall. 2014. The Environmental Capitalists: Making Billions by Saving the Planet. LID
Publishing.
6
Naomi Klein, interview by Jayme Poisson. 2019. "Climate Strikes, Greta and the Green New
Deal." CBC Front Burner PodCast. (September 22).
7
David Schweickart. 2010. "Is Sustainable Capitalism Possible?" 6739–52.
8
David Frankel, and Amy Wagner. 2017. Battery storage: The next disruptive technology in the
power sector. Article, San Francisco, CA: McKinsey & Company.
5

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blackouts that are implemented as part of attempts to mitigate these extreme
weather incidents.
Reversing a growing trend of the privatization of utilities like water and electricity
to public or private-public partnerships could remove pure profit motivation. 9
Making these utilities more accountable to public scrutiny has been found to make
a difference. The introduction of carbon-reducing programs, such as more energyefficient household items, has helped immensely in reducing carbon emissions.10
However, there are still many areas in which to improve. An embracing of even
more reductions will help governments to manage their countries more effectively
with an environmental capitalist economy.
Another way that governments could improve the management of the environment,
and to better ensure its sustainability, is to more carefully assess how the producers
of goods and services cost out, pay and subsequently price those goods and services.
Currently, for example, a tomato farmer would calculate the cost of the labour and
other services, such as delivery to market, to price a batch of tomatoes. They do not
calculate the cost of the damage to the environment from things like the carbon
generated by the irrigation systems or the truck that delivers goods to the market. 11
This lack of accounting lets many organizations, corporations and their
shareholders leave taxpayers to absorb these costs directly. Governments
incorporate those costs into future budgets to account for the abatement or clean up
after unusual climate events, floods or droughts. 12 Producers receive the benefit of
shared costs, rather than directly accounting for them in their work. Arguments
against these types of adjustments include the increased costs to consumers that
would be realized if goods and services were priced this way. There may also be
limited expertise available in some smaller businesses to calculate these costs and
then to implement these practices. However, these costs are already being paid by
consumers in ways that they may not even recognize. High incidence of extreme
weather events, interruptions of work, and the relocation of destroyed buildings and
jobs create costs that creep into every individual's cash flow, taxes, and other costs.
These subsequently appear as increased costs of consumer goods because of lost
profits and other costs associated with this extreme weather. If governments were
to create initiatives to address these types of cost accounting and support businesses
to manage the implementing of sustainable practices, the public would be able to

Eva Lieberherr, and Bernhard Truffer. 2015. "The Impact of Privatization on Sustainability
Transitions: A Comparative Analysis of Dynamic Capabilities in Three Water Utilities."
Environmental Innovation and Societal Transitions 101–22.
10
David Schweickart. 2010. "Is Sustainable Capitalism Possible?" 6739–52.
11
Nicholas Z Muller, Robert Mendelsohn, and William Nordhaus. 2011. "Environmental
Accounting for Pollution in the United States Economy." American Economic Review Vol. 101:
1649-1675.
12
William Nordhaus. 2013. The Climate Casino: Risk, Uncertainty, and Economics for a Warming
World. Yale University Press.
9

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more easily see where their dollars are going, rather than absorbing them
unknowingly.
Corporations, especially those that operate globally, could see a sustainable
environment as an opportunity to grow their organizations, by diversifying product
and service portfolios and investing in those countries in which they do business.
According to a study in 2018, "sustainable investments can increase beneficial
performance such as financial returns, and other work continues to find a correlation
between financial returns and investments in sustainability" in North America and
parts of Asia. 13 There is every reason for investments in sustainability to be
implemented or increased from current levels by these corporations. An
environmental capitalist economy would be supportive of these types of initiatives
by corporations, as governments could create tax incentives, reduce or eliminate
cap and trade or make other carbon-tax offers. Venture capital firms that focus on
green corporations and entrepreneurs could expand their mandates and take an
interest in such innovations within corporations, or those corporations could attract
new investors who are putting their money and futures behind these types of
activities. This blend of government programs and incentives, paired with the
decentralized method that the market has of addressing the needs and prospects of
its growth, could be the best way forward. 14 A heavy-handed socialist-type of
solution would not be required if capitalists could make environmentalism an
essential part of their plans and futures.
It will soon be mandatory for people to articulate their demands for what they will
accept as their future and then to apply pressure on their governments and
politicians to set the goals and standards required to achieve those results. 15 Recent
events in Lebanon, Chile and Hong Kong have proven that the voices of the people
will be heard. In some countries, a simple majority of people is enough to sway
politicians to back new initiatives. And people must be ready to push if humanity
is to survive on the planet as "…there are people in power who can be pushed and
are not immune to pressure" from their citizens. 16 This same pressure could be
applied to corporations and organizations that are dependent on existing bases of
customers for sustaining or growing their markets. People have the leverage to
influence the behaviours of such organizations and groups. Citizens have the power
to demand that the companies they support be environmentally aware and proactive
in the policies, products and programs that they deliver. And the people and
13
Kyungbok Kim, and Sang-Myung Lee. 2018. "Does Sustainability Affect Corporate
Performance and Economic Development? Evidence from the Asia-Pacific region and North
America." Sustainability (10 no. 4: 909).
14
Carl Hall. 2014. The Environmental Capitalists: Making Billions by Saving the Planet. LID
Publishing.
15
Scott J. Callan, and Janet M Thomas. 2007. Environmental Economics & Management: Theory,
Policy, and Applications; Fourth Edition. Mason, OH: Thomson Higher Education.
16
Naomi Klein, interview by Jayme Poisson. 2019. "Climate Strikes, Greta and …” (September
22)

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organizations that are the wealthiest or have gained the most from the
mismanagement of valuable earth resources must be made to pay. 17
There is global concern about these types of environmental circumstances, and the
United Nations has taken on a project for insurance companies to ensure they are
adequately accounting for climate issues when underwriting coverage. 18 A guide
has recently (2019) been released by the United Nations Environment Programme
Finance Initiative (UNEP FI), including heat maps for various indus tries, for
insurance underwriters to ensure that underwriting allows for the coverage of
potential disasters and various other issues. If there comes a time when no insurance
coverage is available for companies who are ignoring, or who think they can
manage these risks, they will very likely see dropping confidence in their ability to
sustain growth as an organization. 19 Falling share prices or waning interest in
investing would impact their ability to pay shareholders.
There are both informal and more formalized social movements to give further
voice to concerns. One informal movement called "Grab Your Wallet" is a
campaign, conducted via social media, that frequently takes on causes to create
awareness of the types of policies and programs that various companies support.
This campaign provides consumers with options for choosing how to spend their
money and demonstrate support or opposition to specific issues, as well as a way
of conveying the importance of these problems and actions through economic
coercion. Consumers are sending strong messages of tolerance or intolerance to the
offending companies. These types of movements can have an immediate impact on
a company's public image. They will cause a quick response to a company's
positions on those issues. This type of campaigning has become so effective that
some companies are employing programs, such as sentiment analysis, to monitor
the reactions of current and potential customers. 20 This analysis enables company
managers to respond in a timely fashion to avoid extreme effects on company
performance.
More formal types of movements can also bring pressure to make changes to
corporate and organizational strategies for remaining economically viable. Such
actions could include lobbying for government policy intervention and regulation
17
Naomi Klein. 2019. On Fire: The Burning Case for a Green New Deal. Alfred A. Knopf,
Canada.
18
UNEP-Financial Initiative. 2019. Global guidance on the integration of environmental, social
and governance risks into insurance underwriting. New York, NY: United Nations Environment
Programme Finance Initiative.
19
Zhiyan Cao, and Ganapathi Narayanamoorthy. 2014. "Accounting and Litigation Risk: Evidence
from Directors’ and Officers’ Insurance Pricing." Review of Accounting Studies Vol. 19, No. 1: 1–
42.
20
Kalle Petteri Nuortimo, and Janne Härkönen. 2019. Journal of Intelligence Studies in Business
Vol. 9, No. 1 5-16.

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to force corporations into environmental compliance. There are examples of these
types of movements, over the history of democracies, including women's suffrage,
fighting for the right for women to vote, or Mothers Against Drinking and Driving
(MADD) that have caused significant amendments to policy and laws in North
America. 21 Combinations of these types of movements can be very effective ways
to have the voice of the people heard and acted on by their governments,
corporations and other types of economy-contributing organizations. In the end,
capitalist economies are supported by those who hold the power of the
pocketbook. 22
By no means is an uprising, even by a majority of the people, a guarantee that any
required changes will be enacted. In recent years, there have been many movements
toward economic nationalism, which is a desire to prioritize domestic issues over
global ones. These movements are impediments to achieving an international
consensus on environmental sustainability and "the costs of emission reductions are
national while the benefits from slowing climate change are widely dispersed
around the globe." 23 Nationalist economic movements are demanding to see results
for their tax dollars in their own countries and not to be supporting countries that
are viewed as not contributing their share. In many of the countries where these
economic nationalist movements are prevalent, they are generally in the minority
but are growing. 24 Those who raise their concerns are shouted down by this vocal
minority in the name of patriotism. Those raising concerns about the demise of the
human race and the need to leave a place for their children’s future are being
drowned out.
Fundamental transformations will be required for the basic needs of society:
housing, transportation, food and energy, particularly in developing countries. 25
These transformations will be needed to provide assurances of national security for
some developed countries. Shortages of resources to cover basic needs are already
causing civil wars in some areas of the world, creating massive amounts of refugees
and asylum seekers who are looking for help from their more affluent neighbours.
While nationalist movements are currently seeking to limit or eliminate refugees or
asylum seekers entering their countries, these countries could eventually face even
Loewit-Phillips, Patricia Melody, and Abbie Goldbas. 2013. "Mothers Against Drunk Driving
(MADD): History and Impact." International Journal of Childbirth Education Vol. 28, No. 4: 6267.
22
Katherine White, Rishad Habib, and David J Hardisty. 2019. "How to SHIFT Consumer
Behaviors to be More Sustainable: A Literature Review and Guiding Framework." American
Marketing Association Journal of Marketing Vol 83 (3) 22-49.
23
William Nordhaus. 2013. The Climate Casino: Risk, Uncertainty… Yale University Press.
24
Claudia Postelnicescu. 2016. "Europe’s New Identity: The Refugee Crisis and the Rise of
Nationalism." Europe’s Journal of Psychology Vol. 12, Iss. 2: 203-209.
25
Naomi Klein, interview by Jayme Poisson. 2019. "Climate Strikes, Greta and …” (September
22)
21

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more peril if entry is forced. As already desperate people living in drought and
disaster-stricken areas become more desperate, countries trying to limit the entry of
migrants will realize that "…climate change isn't just about things getter hotter and
wetter: under our current economic and political order, it's about things getting
meaner and uglier." 26
Proactive governments that wish to remain in power, or to retain the functions of
democracy, would be reducing the possibility of events, like revolution or
nationalization of resources, if they began a transformation to environmental
capitalism sooner rather than later. There is a question, though, of how 195-plus
separate countries with distinct economies will agree on an approach that has a goal
of one result for the planet. 27 Responsible economic management will force
governments to realize that they cannot "… continue to grow economically with no
regard for the future." 28 The sooner that action is taken, the sooner the realization
that " … there is a solution, although it will be a compromise. First, we have to
decide what level of environmental quality is acceptable, and then we need to make
the appropriate adjustments in market behaviour to sustain that quality." 29 When
the rise of populism in many countries is added, mostly in the name of nationalism
and more right-leaning governments, this becomes an even more complex problem
as countries are trending toward looking inward, more and more, to develop and
enhance "their own." The political right, however, has the most to gain from the
kinds of changes that are required. They are most often the ones to stand for
prosperity and growth and an environment that no longer works will mean that
economies are no longer expanding. 30
As demonstrated through this discussion, there are vast arrays of possibilities for
tackling environmental sustainability without compromising the growth of a
capitalist economy – through an environmental capitalist economy. People must be
willing to decide what future they want to belong to and put pressure on their
governments to make the necessary changes. Many movements have recently
shown that changes can be made through public pressure. Environmental
sustainability has no borders and must be a global effort. The Paris Climate Accord
was a good place to start, but the rise of economic nationalism threatens to derail
these types of global efforts. Right leaning and conservative politicians have much
to gain from supporting green initiatives since they most naturally promote
capitalism and economic prosperity. Left leaning and liberal politicians also have
Naomi Klein. 2019. On Fire: The Burning Case for a Green New Deal. Alfred A. Knopf,
Canada.
27
Carl Hall. 2014. The Environmental Capitalists: Making Billions by Saving the Planet. LID
Publishing.
28
Callan, Thomas. 2007. Environmental Economics & Management: Theory …
29
Callan, Thomas. 2007. Environmental Economics & Management: Theory …
30
Carl Hall. 2014. The Environmental Capitalists: Making Billions by Saving the Planet. LID
Publishing.
26

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much to gain if they want to see the free market, which supports government
programs, remain the leading example of how economies grow. Some democraticsocialist governments are already well ahead of the curve with environmental
capitalism, for example, in Scandinavian countries. A rising socialist sentiment in
many other countries provides an opportunity for the socialist politicians leading
those populist movements to take the lead in pushing the governments that they are
part of toward more sustainable environmental policies and practices. Together,
they could make a difference in the future of the planet.

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