Australian Economic Development and the Environment: Conflict or Synergy

Abstract

The populist view of economic development and the environment is that advances in one will necessarily result in a decline in the other. Evidence in the Australian context is that the dual goals can be achieved simultaneously. As economic development progresses, the increasing levels of income stimulate greater demand for environmental improvements. The population engages in more environmentally focused consumption and calls for its governments to introduce more policies designed to rehabilitate and protect environmental assets. Concurrently, the increasing levels of wealth allow for increasing expenditure on research and development into production processes that generate greater productivity and less environmental damage. The Australian agricultural sector provides numerous examples of concurrent improvements in productivity and environmental condition. Zero tillage broad acre grain cultivation practices have led to lower rates of soil erosion and have enriched soil biota while delivering higher productivity. Similarly, the introduction of integrated pest management, including the planting of pest and herbicide tolerant species, has improved water quality in cotton growing areas. A key implication from this analysis is that policies to improve environmental conditions should not be focused on stifling economic growth. Rather, governments should strive for policies that will encourage economic growth – such as the installation of property rights that are both well defined and defended. Concurrently, policies specifically designed to deal with potential environmental problems should be enacted. For instance, the establishment of property rights to water and the setting aside of allocations for environmental flows will encourage both economic development and environmental protection.