4
J. Swart and L. Brinkmann
1 Introduction
In September 2015 the Heads of State and Government met at the United Nations
Headquarters in New York, when they agreed on 17 Sustainable Development Goals
(United Nations 2015). These goals linked sustainable development to three perspectives: economic, social and environmental; and emphasized the challenge to alleviate
poverty and environmental degradation. Brazil is an upper-middle-income economy,
with a GDP per capita of around 11,000 dollars in 2016 (World Bank WDI). It ranked
44 out of 85 countries in terms of Economic Complexity in the same year (Observatory of Economic Complexity). Brazil is also a country of inequalities, where
close to 13% of the population was unemployment in 2017 (World Bank, WDI) and
poverty reached 8% of the population in 2015 (World Bank, WDI).
1 Embracing the
Sustainable Development Goals is vital for Brazil, given these economic and social
challenges, but also given the pressure that economic development places on the
environment. In 2016 around 40 percent of the Brazilian population lived in urban
agglomerations of more than 1 million people (World Bank, WDI). As in many developing countries, people agglomerate in big cities in search for better opportunities.
This agglomeration can create a coordination challenge at the cost of inadequate provisions of services and infrastructure, which contributes to environmental problems
(such as air pollution, and open-air waste disposal).
At the same time United Nations (2015) argues that we live in a “time of immense
opportunity”. A time in which “the spread of information and communications
technology and global interconnectedness has great potential to accelerate human
progress, to bridge the digital divide and to develop knowledge societies, as does scientific and technological innovation across areas as diverse as medicine and energy”
(p. 5). In this sense, economic agglomeration, when tied to technological advances
and access to knowledge can stimulate the adoption of cleaner production methods
and infrastructure.
The empirical literature analysing economic factors driving environmental degradation set a central role on economic growth (Stern 2017). Nonetheless, Stern (2017)
argues that for truly understanding what reduces pollution, we need to understand
“the nature of the factors that are not related to economic growth” (p. 8). The Environmental Kuznets Curve (EKC) hypothesis suggests an inverted U-shaped relationship
between various indicators of environmental degradation and income. Accordingly,
environmental degradation increases during the early stages of economic development, until a turning point level of income is reached. From this point, with rising
incomes, economic development ultimately leads to enhanced environmental quality.
The EKC is, however, silent with respect to how income level affects environmental
quality. Economic development could be capturing institutional quality, preferences,
education, economic structures (e.g. sectoral composition), among others. An empirical analysis, should thus try to include these direct determinants of environmental
quality. Leaving them out could wrongly indicate that economic growth is all it needs
1 Poverty headcount ratio at $3.20 a day (2011 PP) (% of population).
J. Swart and L. Brinkmann
1 Introduction
In September 2015 the Heads of State and Government met at the United Nations
Headquarters in New York, when they agreed on 17 Sustainable Development Goals
(United Nations 2015). These goals linked sustainable development to three perspectives: economic, social and environmental; and emphasized the challenge to alleviate
poverty and environmental degradation. Brazil is an upper-middle-income economy,
with a GDP per capita of around 11,000 dollars in 2016 (World Bank WDI). It ranked
44 out of 85 countries in terms of Economic Complexity in the same year (Observatory of Economic Complexity). Brazil is also a country of inequalities, where
close to 13% of the population was unemployment in 2017 (World Bank, WDI) and
poverty reached 8% of the population in 2015 (World Bank, WDI).
1 Embracing the
Sustainable Development Goals is vital for Brazil, given these economic and social
challenges, but also given the pressure that economic development places on the
environment. In 2016 around 40 percent of the Brazilian population lived in urban
agglomerations of more than 1 million people (World Bank, WDI). As in many developing countries, people agglomerate in big cities in search for better opportunities.
This agglomeration can create a coordination challenge at the cost of inadequate provisions of services and infrastructure, which contributes to environmental problems
(such as air pollution, and open-air waste disposal).
At the same time United Nations (2015) argues that we live in a “time of immense
opportunity”. A time in which “the spread of information and communications
technology and global interconnectedness has great potential to accelerate human
progress, to bridge the digital divide and to develop knowledge societies, as does scientific and technological innovation across areas as diverse as medicine and energy”
(p. 5). In this sense, economic agglomeration, when tied to technological advances
and access to knowledge can stimulate the adoption of cleaner production methods
and infrastructure.
The empirical literature analysing economic factors driving environmental degradation set a central role on economic growth (Stern 2017). Nonetheless, Stern (2017)
argues that for truly understanding what reduces pollution, we need to understand
“the nature of the factors that are not related to economic growth” (p. 8). The Environmental Kuznets Curve (EKC) hypothesis suggests an inverted U-shaped relationship
between various indicators of environmental degradation and income. Accordingly,
environmental degradation increases during the early stages of economic development, until a turning point level of income is reached. From this point, with rising
incomes, economic development ultimately leads to enhanced environmental quality.
The EKC is, however, silent with respect to how income level affects environmental
quality. Economic development could be capturing institutional quality, preferences,
education, economic structures (e.g. sectoral composition), among others. An empirical analysis, should thus try to include these direct determinants of environmental
quality. Leaving them out could wrongly indicate that economic growth is all it needs
1 Poverty headcount ratio at $3.20 a day (2011 PP) (% of population).