Economics of the SDGs: Putting the Sustainable Development Goals into Practice

By Edward B. Barbier and Joanne C. Burgess

This is the first book that employs economics to develop and apply an analytical framework for assessing progress towards the Sustainable Development Goals (SDGs). The authors explore the historical context for the underlying sustainability concept, develop an economics-based analytical framework for assessing progress towards the SDGs, and discuss the implications for sustainability policy and future research. 
Economics is concerned with analysing the trade-offs in allocating scarce means to achieve various ends. Thus, economic methods are ideally suited to assessing how progress towards one or more SDGs may come at the expense of achieving other goals. Such interactions are inevitable in meeting the 2030 Agenda over the next decade, given that the SDGs include different economic, social, and environmental elements. Although it may be possible to make progress across all 17 goals by 2030, it is more likely that improvement toward all goals will be mixed.For example, we may have reduced poverty or hunger over recent years, but the way in which this progress has been achieved – e.g. through economic expansion and industrial growth – may have come at the cost in achieving some environmental or social goals. On the other hand, progress in reducing poverty is likely to go hand-in-hand with other important goals, such as eliminating hunger, improving clean water and sanitation, and ensuring good health and well-being.
Assessing these interactions is essential for guiding policy, so that countries and the international community can begin implementing the right set of environmental, social and economic policies to achieve more sustainable and inclusive global development.
  

• Language: English
• Publisher: Palgrave Macmillan
• Release date: Jul 28, 2021
• ISBN: 9783030786984

Book preview

Part IHistorical Context of the SDGs

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021

E. B. Barbier, J. C. BurgessEconomics of the SDGshttps://doi.org/10.1007/978-3-030-78698-4_1

1. Introduction to the SDGs

Edward B. Barbier¹   and Joanne C. Burgess¹  

(1)

Department of Economics, Colorado State University, Fort Collins, CO, USA

Edward B. Barbier (Corresponding author)

Email: [e-mail]

Joanne C. Burgess

Email: [e-mail]

Chapter Highlights

This chapter:

Identifies the book’s novel and unique contribution to the existing literature on sustainability and the Sustainable Development Goals (SDGs) for policy makers, practitioners, and academics.

Provides an overview of the book, its main aims and objectives and key themes.

Describes the UN 2030 Agenda and its 17 SDGs.

Explains why an economic approach to putting the sustainable development goals into practice is important to assessing progress towards the SDGs and sustainability.

As we stated in the Preface, our aim in writing this book is to help foster better assessment of progress towards the 17 Sustainable Development Goals (SDGs), which were adopted by the United Nations (UN) as key environmental, economic, and social benchmarks for global development. Tracking such progress is critical for attaining these goals, especially at this difficult time when the COVID-19 pandemic is undermining these aims. We believe that economics has an important role to play both in helping this process of assessment and in designing policies to achieve the overall objective of sustainable and inclusive development.

This introductory chapter describes briefly the UN 2030 Agenda and 17 Sustainable Development Goals and provides an overview of the book and its main themes. We also outline how our economic approach to putting the sustainable development goals into practice can potentially contribute to assessing SDG progress and to improving policies for sustainability.

The UN 2030 Agenda

In 2015, the General Assembly of the United Nations formally adopted The 2030 Agenda for Sustainable Development, to provide a plan of action for people, planet and prosperity (UN 2015b, p 3).

The UN 2030 Agenda has two aims. First, it calls on all UN Member States to adopt 17 Sustainable Development Goals (SDGs) and 169 targets for achieving these goals. Second, it vows to fulfill these promises in just 15 years: We commit ourselves to working tirelessly for the full implementation of this Agenda by 2030 (UN 2015b, p. 4).

The 2030 Agenda builds on a previous effort by the UN to set ambitious goals and timelines for global development. In 2000, Member States proposed eight broad objectives, which became collectively known as the Millennium Development Goals (MDGs) (UN 2015a). Each of the MDGs were accompanied by specific targets set for the year 2015, such as halve, between 1990 and 2015, the proportion of people whose income is less than one dollar a day and reduce by two-thirds, between 1990 and 2015, the under-five mortality rate.

The UN 2030 Agenda contains these original MDGs but also includes additional goals to reflect the new emphasis on sustainability: We are committed to achieving sustainable development in its three dimensions—economic, social and environmental—in a balanced and integrated manner (UN 2015b, p.4).

Adding more goals in the 2030 Agenda was considered essential to attaining these three dimensions of sustainability:

Almost 15 years ago, the Millennium Development Goals were agreed. These provided an important framework for development and significant progress has been made in a number of areas….In its scope, however, the framework we are announcing today goes far beyond the Millennium Development Goals. Alongside continuing development priorities such as poverty eradication, health, education and food security and nutrition, it sets out a wide range of economic, social and environmental objectives. It also promises more peaceful and inclusive societies (UN 2015b, p. 7).

In sum, as indicated by its title Transforming the World, the UN 2030 Agenda is an ambitious effort to embrace sustainable development as an over-arching objective for all Member States. The new Agenda came into effect on January 1, 2016, and, according to the UN, will guide the decisions we take over the next 15 years at the country, regional, and global level (UN 2015b, p. 8). Most importantly, the original 8 MDGs have been expanded to 17 Sustainable Development Goals, to reflect the wide range of economic, social and environmental objectives that are viewed as critical to achieving progress towards sustainability by 2030.

The 17 Sustainable Development Goals

The purpose of the 17 SDGs comprising the 2030 Agenda is to provide guidance on how to achieve the central objective of sustainable development. As emphasized by Jeffrey Sachs, a key architect of the 2030 Agenda, the SDGs aim for a combination of economic development, environmental sustainability, and social inclusion (Sachs 2012, p. 2206).

Table 1.1 lists the 17 SDGs. Although not shown in the table, the SDGs are further decomposed into 169 targets, and there are currently about 230 indicators that have been proposed for realizing these targets.

Table 1.1

The 17 sustianable development goals

Source: Authors own creation. List of goals compiled from (UN 2015b)

Each year, the UN reports on the progress in meeting the goals by 2030 (e.g., see UN 2019). Affiliated institutions, such as the United Nations Association and the Sustainable Development Solutions Network (SDSN), also provide feedback through their own reports on the SDGs (Sachs et al. 2019; UNA-UK 2019).

Many assessments of the 17 SDGs have focused on formulating appropriate targets and indicators for each goal and on overcoming measurement challenges in collecting the data necessary for applying various indicators (Colglazier 2015; Dang and Serajuddin 2020; Hák et al. 2016; Le Blanc 2015; Lu et al. 2015; Reyers et al. 2017). For example, Dang and Serajuddin (2020) find that data are available for just over half of all the proposed indicators, and only one in five indicators have sufficient data to comprehensively track progress across countries and over time. Better targets, indicators, and data are clearly needed for monitoring progress towards achieving each goal. But to ensure that such progress leads to a combination of economic development, environmental sustainability, and social inclusion requires an analytical framework for assessing whether or not success towards implementing all 17 SDGs is being achieved.

Various analytical frameworks have been proposed for monitoring progress towards attaining the SDGs at the country, regional, and global level. These include employing integrated assessment models to evaluate interaction and integration across goals (e.g., Moyer and Hedden 2020; Nilsson et al. 2016; Neumann et al. 2018; van Soest et al. 2019) and constructing a Sustainable Development Index from the 17 goals (Biggeri et al. 2019; Campagnolo et al. 2018; Costanza et al. 2016; Sachs et al. 2018, 2019).¹ Such approaches are useful for identifying priority areas for action, tracking overall progress, and making international comparisons. However, the methods for constructing such models and indices for assessment vary considerably across approaches. As Biggeri et al. (2019), p. 630) emphasize, developing an analytical framework for measuring and monitoring SDG achievements should have three objectives:

The framework should reflect the integrated nature of goals and targets, primarily in terms of inter-linkages as well as in terms of complementarities across levels of implementation.

The analysis should be built on strong foundations, from both theoretical and practical perspectives.

A critical objective should be to understand what the areas of synergies and trade-offs among goals and targets might be, and how and to what extent realising – or failing to realise – one particular achievement may impact positively or negatively on other goals and targets.

The purpose of this book is to use standard methods in economics to develop such an analytical framework for putting the sustainable development goals into practice—as our book’s subtitle suggests.

Economics is concerned with analyzing the tradeoffs in allocating scarce means to achieve various ends. Thus, economic methods are ideally suited to assessing how progress towards one or more SDGs may come at the expense of, or help achieve, other goals. Such interactions are inevitable in meeting the 2030 Agenda over the next decade, given that the SDGs include different economic, social, and environmental elements. Although it may be possible to make progress across all 17 goals by 2030, it is more likely that improvement towards all goals will be mixed. For example, we may have reduced poverty or hunger over recent years, but the way in which this progress has been achieved—for instance through economic expansion and industrial growth—may have come at the cost of achieving some environmental or social goals. On the other hand, progress in reducing poverty is likely to go hand-in-hand with other important goals, such as eliminating hunger, improving clean water and sanitation, and ensuring good health and well-being.

Assessing these interactions is essential for guiding policy, so that countries and the international community can begin implementing the right set of environmental, social, and economic policies to achieve more sustainable global development.

Outline and Aims

The book is structured into three parts, with each part focused on a main theme.

In Part I, the initial two chapters introduce and provide a historical overview of the concept of sustainable development and the emergence of the SDGs. Various concepts of sustainability have been developed and debated over the years. We trace the links between the current SDGs of the 2030 Agenda to their antecedents in the sustainability literature over the past 50 years. In particular, we emphasize the link between the SDGs and the systems approach developed in the 1980s, which characterizes sustainability as the maximization of goals across environmental, economic, and social systems (Barbier 1987; Barbier and Burgess 2017; Holmberg and Sandbrook 1992). This approach can also be considered part of the broader systems thinking that underlies much of sustainability science today (Clark 2007; Clark and Harley 2020; Kates et al. 2001; Matson et al. 2016). As we explain in Part I, the systems approach to sustainability is the foundation for the analytical framework and assessment methods that we develop in this book.

The five chapters of Part II illustrate how we use economics to build a practical and theoretical foundation for assessing progress towards achieving the various SDGs. The approach we develop has several aims.

First, in Chaps. 3 and 4, we devise an analytical framework for estimating progress in attaining one SDG while accounting for interactions in achieving other goals. We base this approach on standard methods for measuring the welfare effects arising from changes in imposed quantities (Freeman 2003; Lankford 1988).

Second, in Chaps. 5 and 6 we apply our approach to assess progress in attaining the 17 SDGs over 2000 to 2018, using a representative indicator for each goal. We show that it is possible to estimate the welfare changes arising from an increase in the indicator level for one SDG, net of possible declines or improvements in the indicator associated with other goals. We use No Poverty (SDG 1) as our benchmark indicator, and we estimate the per capita welfare change of reductions in 2000–2018 poverty rates net of any gains or losses in attaining each of the remaining 16 goals.

We have previously developed such an analytical framework to provide preliminary assessments of progress globally and for low-income countries in achieving the SDGs (Barbier and Burgess 2019). Here, we develop our framework further, expand and update the global and country case study examples that illustrate our approach, including a focus on nine representative low-income, lower middle-income, and upper middle-income countries. The final chapter (Chap. 7) of this part examines how our assessment of the SDGs might be enhanced by taking into account other factors, such as the environmental costs of current development, whether it is compatible with improving institutional quality, and if it is also leading to more inclusive development.

In Part III, which comprises the final three chapters (Chaps. 8, 9, and 10) of this book, we address an important question: does progress towards the SDGs ensure sustainability? This question is especially relevant in a world grappling with the hardships caused by the COVID-19 pandemic, and all countries are struggling to find the right policy strategies to rebuild their economies and societies. We discuss whether the SDGs are sufficient for this purpose, and whether additional policies may be necessary especially to address rising global environmental risks and wealth inequality. Interpreting the relevance of SDGs as a guide to sustainability requires understanding fully their limits as a policy tool, as well as identifying what additional policies are needed in a post-pandemic world.

One concern is that, like the preceding MDGs, such goals were meant to apply only at the global level, not at the country or regional level (Vandemoortele 2009). Others suggest that, as benchmarks for gauging progress towards important objectives, the SDGs should not be treated as planning goals, and when used as measures of national performance, the criterion of success should focus on the pace of progress rather than on achieving the targets (Fukuda-Parr et al. 2012). Another important policy debate is whether we should interpret the SDGs as performance measures or as ambitious targets meant to motivate extra effort towards achieving them (Easterly 2009).

There is also a growing scientific literature emphasizing that human populations and economic activity are rapidly exceeding planetary boundaries, which could lead to abrupt phase changes, or tipping points (Lenton et al. 2008; Rockström et al. 2009; Steffen et al. 2015). It has been proposed that sustainable development in the Anthropocene should be defined as development that meets the needs of the present while safeguarding Earth’s life-support system, on which the welfare of current and future generations depends (Griggs et al. 2013, p. 306).² How to ensure this sustainability objective may be the most critical challenge to their role as a guide for current and future global policy.

Finally, specific policies may be needed to close the growing wealth gap between rich and poor worldwide. This problem is becoming urgent due to the pandemic. Inequality has worsened because of COVID-19 as the world’s richest have become wealthier and poverty reduction has suffered a major setback (Oxfam 2021; UN 2020; World Bank 2020). Shared prosperity—the relative increase in the incomes of the bottom 40% of the population compared to that of the entire population—will drop sharply in nearly all economies in 2020–2021 and will decline even more if the pandemic’s economic impacts continue to fall disproportionately on poor people (World Bank 2020). In addition to putting the sustainable development goals into practice, we need policies to ensure a more inclusive and environmentally sustainable world economy.

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