In his recent encyclical, Laudato Si’, Pope Francis wrote about the need to care more for the environment which he called “our common home”. In this document, the Pontiff links a number of factors, including the economy, with the degradation of the environment and it is this particular element that I wish to touch upon in this week’s contribution.

The term ‘sustainable economic growth’ has now become widely used, and even accepted, as a concept. The term as such means a rate of growth which can be maintained without creating other significant economic problems, especially for future generations.

There is clearly a trade-off between rapid economic growth today and growth in the future. We cannot damage the environment to the extent that it will jeopardise future economic growth? Yet it seems that this is what has happened and Pope Francis refers to the “harm inflicted... by our irresponsible use and abuse of goods...”.

In the same vein, the encyclical also makes reference to the harm done to the environment, as being “a tragic consequence” of human activity. Thanks to the over-exploitation of the natural environment and its resources, humanity runs the risk of destroying it and becoming in turn a victim of this degradation. There is the risk that the economic growth we are generating today will have depleted the earth’s natural resources to such an extent that there will be no resources left to create future growth.

Will the countries that will experience most economic growth be those that have managed to protect adequately their natural environment and resources?

This may be evident already in certain areas such as overfishing in certain areas, to the extent that fish stocks are no longer capable of replenishing themselves. To this one may also add the destruction of the rainforests in Brazil.

There is a sentence which is worth quoting directly: “Human beings frequently seem to see no other meaning in their natural environment than what serves for immediate use and consumption.” This again touches upon the heart of the issue of sustainable economic growth. The indiscriminate abuse of the natural environment is being brought about by current consumption patterns, with no attention being devoted to future generations. Pollution, waste and the throwaway culture are not only harming the environment but also the economy and the potential for economic growth.

In my contribution of some weeks ago, I asked whether in a few decades the strongest economies will be those that have managed to safeguard their ability to provide food and water for themselves. I could repeat the question with a slight change. In the future, will the countries that will experience most economic growth be those that have managed to protect adequately their natural environment and resources?

One of the fundamental principles of economics, which students of the subject learn in the very first lesson, is that resources are scarce. Because resources are scarce, individuals, businesses and governments are forced to make choices. Making choices implies a lost opportunity, which is referred to as opportunity cost. Is the opportunity cost of the current economic system future economic growth?

Another question worth asking is whether the harm being done to the environment today for purely financial reasons creates further income inequality. In all probability, the answer is in the affirmative.

The depletion of resources will force those with the greatest financial muscle to use that same muscle to secure the use of such scare resources. Those that already have less finances shall become poorer as those who have more will do all they can to maintain their state of affluence.

The solution is therefore quite obvious. If we want to avoid the impending catastrophe, we need to take more care of our common home, as Pope Francis writes. This means placing man in the centre of our economic decision-making and subordinating finance to the common good. This requires us to correct models of economic growth that have proved themselves to be totally incapable of ensuring respect for the environment.