Abstract
The Environmental Kuznets Curve hypothesis examines how economic development can improve environmental outcomes (called Ecological Modernisation Theory) or it can cause worse outcomes (called Treadmill of Production Theory). This paper examines Bhutan which has committed policies for increased happiness and wealth while remaining carbon neutral. The difference is being tested by regression analysis of how economic growth varies with the environmental intensity of well being (EIWB). The regression analysis shows that the case of Bhutan can be explained in terms of the Treadmill of Production Theory based on economic and wellbeing growth harming the environment, however, it is simply too early in the EKC. The data also show that population growth helps resolve the nexus which works more in the Ecological Modernisation Theory perspective and supports the need to continue urbanization to resolve these issues. Rather than just simply waiting for economic growth to turn around the EKC, Bhutan should take direct action to maintain its carbon neutral goal and its happiness goal and thus continue to provide a model for the sustainable development discourse in general. Highlights: 1) The concept of the environmental intensity of human well being (EIWB) was used to examine the two dominant environmental impact theories: Treadmill of Production Theory (TPT) under the IPAT hypothesis and Ecological Modernisation Theory (EMT) for Bhutan under the framework of the EKC hypothesis. 2) The nexus between economic growth and EIWB leans towards TPT, but it is still too early to see EKC though decoupling has begun and is likely to lead to EMT. 3) The nexus between population and EIWB leans towards EMT. 4) The need for intervention on social and environmental issues within a modified economic growth trajectory remains the core finding of how sustainable development can be achieved.
Highlights
In the era of the Sustainable Development Goals (SDG’s) and the Paris Agreement on Climate Change, the world is struggling to find how to resolve the nexus between the need for economic growth and human happiness to be enhanced while living within environmental limits such as climate change
This study has attempted to interlink the relationships between the carbon intensity of human wellbeing and economic growth as a way of resolving how Bhutan is managing to balance happiness, environment and economic growth
It examined the two main approaches that are being used to explain these interactions: Ecological Modernisation Theory based on the Environmental Kuznets Curve, and Treadmill of Production Theory with its basis on the IPAT model
Summary
In the era of the Sustainable Development Goals (SDG’s) and the Paris Agreement on Climate Change, the world is struggling to find how to resolve the nexus between the need for economic growth and human happiness to be enhanced while living within environmental limits such as climate change. Despite the sustainable development discourse which tries to integrate all three, there is a strong reaction in the literature that keeps these three strands separate with little attempt to resolve how they can be integrated. The gap between these approaches seems to be widening; for example, a special volume on “Absolute Reductions” in the Journal of Cleaner Production [10] emphasised the need for a radical socio-technical transformation that can bring material, energy and emissions within ecological limits.
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