Wednesday, August 7, 2019

Sustainability in Neo-Classical Economics Coursework

Sustainability in Neo-Classical Economics - Coursework Example The notion of sustainability relates to the creation of economic and social conditions through activities of the present generation for their own existence and maintenance of these conditions in such way that the future generations are able to maintain their own existence (EPA 2013). The following section defines the basic concepts of sustainability and provides an explanation of these concepts, which would allow an in-depth understanding of the issue of compatibility of the neoclassical theory of economics that has been studied in detail in the latter part of the paper. ‘Sustainable development’ is a concept that has gained importance in the late 1990s. It encompasses a vast area of understanding of the path of development of modern economies. However, in common understanding, the ‘sustainable development’ or simply sustainability refers to the path of development for the current generation in these countries. It signifies the way in which the current generation utilizes the resources for satisfying its necessities without indulging in excessive consumption of the resources that the interest of the future generation is hampered. In 1987, the World Commission on Environment and Development implemented this notion in the political agenda of the Commission (Mulder and Bergh 2001). Since then politically the concept of sustainable development has become an important issue in the development process of the countries around the world.   The world has experienced severely rising interest on the issue of sustainable development in the past two decades. Although it came into political light after the 1990s, economists have been devoting huge to the phenomenon of interaction between the ecology and the economy since the 18th century (Mulder and Bergh 2001). In this context, development means that the resources are utilized in a conscious manner in the current period so that enough resources are preserved for the future generations for the fulfilling of their interests (Asheim 1994, 35). The purpose of taking such a development initiative is to allow all generations to come to live a standard life. However, human activities involving the three interfaces; society, environment, and economy create a range of opportunities for the optimization of profit objectives of business organizations, but in most cases, the core concept of sustainability is ignored while performing this pure economic optimization exercise.

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