Minerals, Wealth and Progress - Mining and the Environment: From Ore to Metal - page 46

must be simultaneously sustainable in and of themselves. Satisfying any one of these three
sustainability circles without also satisfying the others is deemed insufficient. Each of the
three circles is independently crucial, but they are interconnected. There is, therefore, a
risk of unwittingly causing (or worsening) problems in one system while attempting to cor-
rect problems in another. The only sure way to avoid this is to integrate decisions such that
effects in all three systems are considered before action is taken (Robinson and Tinker 1998).

Economic Sustainability
The economic circle of sustainability is founded on the concept of maximizing the flow
of income from a stock of capital while maintaining the stock yielding this income. The
concept encompasses traditional theory on economic growth, that is, determining optimal
economic growth with a given capital. The intuition is that future generations can only
be better off if they have more capital per capita than we have today. It is immediately
obvious that population growth is inimical to sustainable development since it 'dissipates'
the capital stock. Technological change, on the other hand, enables a given capital stock
to generate more wellbeing per unit of the stock. An easy way to think of it, then, is to
say that future generations will be no worse off if capital stocks are 'constant' and for the
rate of technological change to just offset the rate of population growth. If technological
progress is faster than population change, then future generations could still be as well off
as we are today with a lower capital stock, and so on.
Capital, as is now well known, goes well beyond the common idea of financial capital
and has five main forms (MSSD 2002):
●

Capital, as is now well known,
goes well beyond the common
idea of fi nancial capital and has
fi ve main forms.

natural (or environmental) capital , which provides a continuing income of ecosystem
benefits, such as biological diversity, mineral resources, forests, wetlands, and clean air
and water;

●

built (or productive) capital , such as machinery, buildings, and infrastructure (roads,
housing, health facilities, energy supply, water supply, waste management, etc);

●

human capital , in the form of knowledge, skills, health, cultural endowment, and eco-
nomic livelihood (small enterprise development, literacy, health care, inoculation pro-
grammes, etc.);

●

social capital , the institutions and structures that allow individuals and groups to
develop collaboratively (training, regional planning, decision sharing culture, etc.); and

●

financial capital , the value of which is simply representative of the other forms of capital.

This broadening of the concept of capital is critical to an understanding of sustainable
development ( Case 1.5 ). It is now easy to see that the total capital stock could be rising while
any one form of capital is declining. The idea that forms of capital substitute for each other
is embodied in the notion of weak sustainability. If, on the other hand, forms of capital are
not substitutable then the requirement that the total stock be constant (rising) has to be
supplemented by the requirement than the relevant specific capital stock should also be
nondeclining. In the literature, this has been termed strong sustainability.
Links with social development centre on equity between different societies, and between
the present and future generations. Economic efficiency and optimal use of scarce
resources are also underlying principles, since the concept of sustainability is based on the
idea that natural resources are somehow scarce, which means that any use today may pre-
clude a use tomorrow and vice versa, that use tomorrow may require a restriction of the
use today. Difficulties arise with economic sustainability in terms of identifying the types
of capital to be maintained, and substitutability. Linkages with environmental develop-
ment focus on valuation of natural resource capital and the degree to which pricing of the
resource accounts for scarcity and the full environmental and social costs.

The total capital stock could
be rising while any one form of
capital is declining.