Gross Domestic Product (GDP) represents the total value of all the goods and services that are produced by a nation during a given year. The role of consumers is key to maintaining and sustaining economic growth by the increase of public spending on goods and services. Firms are encouraged to produce more so that they can sell more, and this will encourage a higher demand by consumers leading to a higher output and hence a high economic growth. The ideal GDP growth rate is one that sustainable because this will imply that it stays in the expansion phase of the business cycle for as long as possible.

Economic growth is dependent on natural resources, which stem from fossil fuels. Lee (2005) explains that there is a long run steady state relationship between energy consumption and GDP for a cross section of countries. To deliver a more sustainable economy the world at large needs to make better use of its resources, develop skills and supply goods and services that meet the needs of the consumer. At present the resources are being consumed at a fast rate while on the other hand biodiversity is plummeting. Rees (1997) suggests that, with no serious ecological constraints on the economy, the shortest route to sustainability is to maintain a focus on GDP growth.

For the nations of the world to sustain economic growth then the practices causing environmental problems must continue, it sounds ironic but since the economy makes enough money it will be in a position to finance new initiatives that will reduce some of the negative impacts. For example the world at large is experiencing the effects of climatic change which is linked to the over consumption of fossil fuels ad this leads to economic growth. Stern (1996) notes that, within the horizon of the World Bank’s forecast (2025) global emissions of SO₂ will continue to increase. Forest loss will stabilize before the end of the period but tropical deforestation will continue at a constant rate throughout the period.

In conclusion, the continued consumption of natural resources which have negative effects to the environment at large must continue if we are to sustain economic growth. A sustainable economic growth implies that the rate of growth can be maintained without creating other economic problems and for the future generation.

REFERENCES

Lee, C. C. (2005). Energy consumption and GDP in developing countries: a cointegrated panel analysis. Energy Economics, 27(3), 415-427.

Rees, W. E. (1997). Is ‘sustainable city’an oxymoron?.Local Environment, 2(3), 303-310.

. Stern, D. I., Common, M. S., & Barbier, E. B. (1996). Economic growth and environmental degradation: the environmental Kuznets curve and sustainable development. World development, 24(7), 1151-1160.