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Why is sustainability important for an economics student?
Madhura Joshi
Updated Mar 21, 2022Save
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Sustainability and environmental issues are slowly making their way into the classroom as businesses, organisations and individuals around the world start to understand that protecting the planet while securing our livelihoods is something that we need to weave into our everyday actions.
I’ve seen schools, colleges and universities start to incorporate sustainability topics in their curricula, as young people demand that their educators take matters seriously and provide the knowledge required to live, work and make change in the climate emergency. And it’s no different for students of economics.
In fact, one of the sayings you hear a lot as an economics student is ‘resources are limited but human wants are unlimited.’ It’s a quote commonly used by economists like Adam Smith who proposed a theory for the ways to satisfy unlimited human wants. Since resources are limited, we’re faced with the prospect of scarcity which then forces us to make choices. And the choices we make have a huge impact on the economy and the world.
Economics is the study of how people make choices, while considering how choices are constrained because of limited resources such as money, time, information and materials. Economists also consider how policies and practices could help people make better choices for themselves, their families, or for society (British Academy). So as an economics student, there's an opportunity to make positive changes to the choices people make when it comes to sustainability.
Here are some reasons why sustainability is important to an economics student and how you can – and should – incorporate the environment into your learning.
Promoting prosperity while protecting the climate
The United Nations has set up 17 Sustainable Development Goals (SDGs) in line with its agenda of ‘promoting prosperity while protecting the climate’. The SDGs are set to be achieved by 2030, so learning about the goals and finding ways to implement them is the call of this decade. As a future economist, learning about SGDs has helped me to understand and interpret concepts like the Green GDP, which can illustrate how certain green initiatives can be used as a sustainable way to invest in companies that take up environmentally conscious business practices.
Climate change has brought about threats like poverty and food insecurity, and while rapid economic growth has helped reduce food insecurity to some extent, extreme hunger and malnutrition continue to pester several parts of the world. So, promoting sustainable agriculture (one of the SDGs) could prove to be essential for ending food insecurity and malnutrition, and provide employment opportunities for many people.
Understanding externalities with respect to the environment
As an economics student, you hear the word ‘externalities’ often, which is the cost or benefit that is caused by a producer but is not financially incurred or received by the producer. I recently had the opportunity to study externalities with respect to the environment and it helped me to understand problems caused by industrialisation and consequences of technological changes in different areas, like agriculture.
I’ve also studied mathematical models to maximise the amount of goods transported in the shipping industry, but I was only able to see these challenges in a different light after I learned to acknowledge the environmental costs involved in the process of shipping. This awareness increased my sensitivity towards the environment and will certainly help me build better economic models in the future.
How is the government protecting the environment?
Understanding the role of public players in protecting the environment is something that economics students should be keen to know more about but it’s important for all citizens to know, too.
Being aware of the sustainability initiatives launched by the Indian government helped me to understand the economic impacts of those initiatives and how I might use or adapt those examples in my own work.
I’m particularly interested in knowing more about how the government plans to instil sustainability in its young population. In 2019, the University Grants Commission of India announced their Green Campus Policy which proposed guidelines that ranged from reducing waste on campuses to including sustainability and environmental studies in the curricula across the country. The inclusion of sustainability and environmental studies in my curriculum has made me aware of the ways in which sustainability is closely linked with the economy.
Fun and innovative solutions to promote sustainable economic growth
Most importantly, studying economics and sustainability together helps us to discover innovative ways to promote sustainable economic growth. One interesting concept of behavioural economics that I am endlessly fascinated by is a ‘nudge’, which is basically an action taken to alter someone’s choice without forcing them to take it, forbidding any other options or significantly changing their economic incentives. It’s essentially ‘nudging’ someone in the right direction and it’s a technique that can be used to nudge people towards sustainability too.
Protecting the environment has fast become one of the world’s most urgent issues, which is why it’s important for us all to find ways to invest and encourage action in sustainability and the climate. Economics is just one way we can do that, but it’s an incredibly important one.
These are just some of the many reasons why I feel that sustainability is important for someone like me who is studying economics.
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