An economic-environmental model of Pakistan
Analyses of economic progress in the developing countries have not, as a rule, taken account of the real, long-term environmental costs of using Nature's assets to create productive economic outputs. Yet, resources that are depleted or degraded in contributing to economic growth must be valued in the calculus of cost-benefit analysis in order to arrive at a true measure of sustainable economic development. This research acknowledges the environmental costs associated with economic growth in Pakistan by formulating a model that incorporates economic and environmental variables in an integrated, unified system and then simulates the behavior of this system in response to certain policy tests over a forty year period. The model is driven by population and the investment growth of economic activities which use resources to produce consumption requirements. The development of this system is shaped by sustainability criteria which require the system to account for the cost and productive potential of land and water quality as well as the resilience of the natural resource base upon which the growth is based. The system adjusts itself to satisfy its demand for consumption units according to these constraints. Finally, the model tests eleven policies and ranks them according to how well they attain certain sustainability objectives. The preferred policies are found to be zero population growth, investment in private sector activities, agricultural investment, and land reform. Conversely, policies of public sector or manufacturing investment, as well as that of technological substitution, are found to detract from long-run, sustainable economic progress. It would be useful to apply the mode of analysis developed in this paper to other countries as well as to look at a study area using a higher level of analytical disaggregation.
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