Civil Engineering Reference
In-Depth Information
already reiterated several times that the protection of the environment, and indeed
its enhancement, forms an important strand of the sustainable development agenda.
We have also examined (particularly in
Part B
) the problem that - left to their own
devices - markets cannot deal effectively with environmental impacts. At present,
there is a broad-ranging debate arising from concerns that some economic activity
damages the environment, and politicians are beginning to consider environmental
protection together with other macroeconomic goals. As a result, governments
are increasingly choosing to intervene to influence resource allocation, preserve
biodiversity and reduce pollution. However, there is no agreed way of measuring
the impact of environmental protection initiatives and so there is no indicator for
this objective in
Table 12.1.
We have already discussed the problems of integrating
environmental costs into the marketplace and we will briefly assess the implications
again when considering the measurement of national output in
Chapter 13
and
when introducing the possibility of measuring a nation's ecological footprint.
PRIORITIES: A HISTORICAL PERSPECTIVE
The order of priority that these five macroeconomic objectives are given varies from
government to government. But all governments, in all nations, ultimately seek
these objectives in their quest for macroeconomic stability. Indeed, since the end of
the Second World War, there has been a consensus that governments should take
action to stabilise economic activity. For example, the White Paper on Employment
published in May 1944 stated that the government accepts responsibility for the
maintenance of high and stable levels of growth and employment, and these themes
dominated government agendas in the twentieth century.
Since the 1980s, however, the order of priority has changed and governments
have become more concerned with curbing inflation. Budget statements made during
the 1990s typically emphasised that price stability was considered a precondition
to secure high and stable levels of growth and employment. As the political and
economic scene evolves, it is foreseeable that at some time in the not too distant
future there will be another shift in emphasis, as the objective of protecting the
environment becomes sufficiently important to raise its profile and demote inflation,
employment, trade and growth from their current positions as governments' top
four macroeconomic objectives. In other words, while there may be some doubts at
present about the priority to attach to environmental issues, the interest expressed in
climate change and sustainable development is gathering momentum throughout the
world and a new order is imminent.
Key Points 12.1
❍
To achieve economic stability, five main macroeconomic objectives are
pursued: (a) full employment, (b) stable prices, (c) external balance,
(d) steady growth and (e) environmental protection.
❍
The order of priority accorded to these macroeconomic objectives varies
from government to government.
