USGBC's Founder Re: Human/Planetary Loss and Opportunity Costs of Environmental Degradation

By Ryan Duffy, Communications Fellow

The following is an excerpt from Chapter 6– Sustainable Development– of Greenthink: How Profit can Save the Planet, by USGBC's co-founder and current CEO, Rick Fedrizzi. The preceding section of the chapter discussed China's unilateral turn to cleaner energy as well as the historic climate announcement between President Obama and Chinese President Xi Jinping. This section discusses environmental damage in different parts of the developing world.

Global environmental devastation is upending the macroeconomic fundamentals not only in China, but also throughout the developing world. It's easy to see why. Just like in China, pollution now has a measurable impact on the economies in developing nations.

In India, for example, 80 percent of the country's sewage flows right into its rivers, including its main sources of drinking water.  Air pollution in India is 6 times worse than it was in 2000, and it kills an estimated 620,000 people each year. Researchers at the World Bank estimate that the environmental damage cost India about $80 billion in 2009, the equivalent of 5.7 percent of its GDP.

As you might imagine, the situation is just as dire elsewhere.  Throughout the 2000s, the World Bank published a series of Country Environmental Analyses (CEAs), each of which looked to quantify the effect of environmental devastation on an individual country's economy.  And while the data comes from all around the world, and came across multiple years, the results are shockingly–horrifyingly–similar. 

A 2006 report states, “In Colombia, lack of access to clean water, poor or nonexistent sanitation services, and indoor air pollution are among the principal causes of illness and death, predominantly for children and women in poor households.  The effects of these principal causes of environmental degradation are estimated to cost more than 3.7 percent of Colombia's GDP.” 

Meanwhile, that same year, Pakistan's CEA reported, “Conservative estimates presented in this report suggest that environmental degradation costs the country at least 6 percent of its GDP.”

The following year, the CEA for Ghana stated, “Recent estimates of the cost of natural resource and environmental degradation suggest that the equivalent of 9.6 percent of GDP is lost annually through unsustainable management of the country's forest and land resources and through health costs related to water supply and sanitation, and indoor and outdoor air pollution.” 

The 2008 Nepal CEA reads: “these environmental risk factors have resulted in premature death and disease, especially among the poor and vulnerable groups, and are placing increased health costs and a significant economic burden on the country, estimated at close to US$258 million or nearly 3.5 percent of the country's GDP.” 

I could keep going, but you get the idea. Pollution is directly impacting prosperity in parts of the world where prosperity is desperately needed. And the scale of the impact is terrifying.  There are nearly 200 countries in the world. Imagine adding up the global cost of pollution and environmental devastation–an analysis that, to my surprise, no one has yet performed.  We can easily guess the outcome.  The tally would be trillions of dollars–dollars that are literally going up in smoke. 

It's clear that the old model of economic growth is no longer viable. In fact, in aggregate, the old model is a measurable drag on growth that essentially amounts to a global environmental depression. 

But imagine for a moment that these costs don't exist.  Imagine that we've eliminated millions of unnecessary, pre-mature deaths. Imagine that black smoke and yellow smog became clear blue sky, that industrial chemicals are cleansed from the water, that a century of carbon emissions are sucked out of the air. Imagine a world in which bull markets can throw off the yoke of pollution and run even faster. Imagine that people around the world can breathe clean air and drink clean water, not just some days, but every day. Imagine how these people–no longer being poisoned and sometimes killed by pollution– will need goods and services and jobs and businesses to provide all three.  Never mind the environmental transformation.  Think about the human transformation. Think about the economic transformation: trillions of dollars of economic stimulus, just by eliminating pollution. 

A world without pollution is a world in which opportunity is our must abundant natural resource– a world in which everything is going full speed because the light is always green. A decade ago, this might have been a fantasy, a pipe dream. But not anymore.  The world is changing.  And while a pollution-free future is a long way off, a significantly cleaner, healthier, and even more profitable future is not. 

Developing countries have every right to grow, to prosper, and to meet the urgent needs of their citizens. Pollution has been the by-product of this growth–an acceptable by-product, you might argue, considering that growth wouldn't have existed without it.  Today, however, the equation is shifting. Pollution is increasingly a barrier to growth in the developing world.  Sure enough, political leaders in developing countries are slowly awakening to the fact that profit and the planet are no longer mutually exclusive– that they're symbiotic, part of the same ecosystem. 

In the wake of COP21, and with sustainable and energy efficient technologies becoming rapidly more cost-effective, scalable, and profitable, this is a particuarly prescient and confident statement.  You can buy the book on Amazon new for $12.99. Fun fact: each copy of the book is made after the order is placed so as to reduce waste and ineffiency!