Study of environmental impact of industry development

Economic Annals-XXI: Volume 135, Issue 11-12(1), Pages: 30-32

Citation information:
Bryzhan, I. (2013). Study of environmental impact of industry development. Economic Annals-XXI, 11-12(1),30-32. https://ea21journal.world/index.php/ea-v135-08/

Iryna Bryzhan
PhD (Economics),
Associate Professor,
Scientific Secretary of the Scientific Council,
Poltava National Technical Yuri Kondratyuk University
24 Pershotravnevyi Ave, Poltava, 36601, Ukraine
iryna_bryzhan@meta.ua

Study of environmental impact of industry development

Abstract. Problems of industrial development are central in studying of foreign and domestic scientists. The definition of «economic human», its various modifications and capital were the central element of majority of economical researches. The quality of the environment, the limitations and availability of natural resources were under the interest in the context of: supply and demand balance of production factors; establishment of land rents size; reducing production costs.

The aim of the article is to formalize the causal links between industrial development and environmental crises and investigate the mechanisms of interaction between main components of economic and ecological systems for development appropriate mathematical economic models.

Industrial economical development is conducted by two environmentally destructive processes: substances and non-renewable energy resources extraction from natural cycle and environmental pollution emissions. The intensity of environmentally destructive cycle was quite small and environmental consequences of industrial development were ignored on the first steps of industrial development. Technological progress with infinity of human needs continuously expanded amounts and types of natural resources involved in anthropogenic circulation. All of these have created a variety of negative effects produced by industry. Eco-destructive cycle reached global scale on this stage of industrial development. The accumulation of imbalances of ecological system destabilizes the economic system due to loosing basis of economic development: (1) «earth»/natural capital as result of degradation and depletion of ecosystems, (2) «work»/human capital due to reducing population capacity that connected with the quality of life decreasing; (3) financial capital by increasing costs conned with decreasing the amount of available natural resources essential quality, increasing production costs, health protection, necessarily to reverse the effects of interrelated cycles of natural and man-made disasters.

Studying of causal links between industrial production development and environmental crisis has allowed developing of cognitive map «environmentally destructive cycle». This map includes diagram of reinforcing loop of natural and man-made environmental disasters. According to this, it is logical to make a conclusion that the environmental crisis is an objective factor of thwart progress of economic growth in long-term. Considering of this fact justifies necessity to develop and implement a set of market and administrative stimulus for industrial development greening.

Keywords: Economic Development; Industrial Development; Environmental Crisis; Environmentally Destructive Cycle

JEL Classification: B31; L60; O11

References

1. Polovian, O. V. (2012). Balanced development of economic and ecological systems (co-evolutionary approach). Donetsk: Institute of Industrial Economics (in Ukr.).
2. Smith, A. (2007). An Inquiry of the Nature and Causes of the Wealth of Nations (V. S. Afanasieva, Trans.). Moscow: Eksmo (in Russ.).
3. Ricardo, D. (2007). Principles of Political Economy and Taxation (P. N. Kliukina, Trans.). Moscow: Eksmo (in Russ.).
4. Marx, K. (1960). Capital. Critique of Political Economy. Moscow (in Russ.).
5. The economic history of the world. Europe (2008). In M. V. Konotopova (Ed.). (3rd ed.). Moscow: Dashkov & Ko (in Russ.).
6. Rauscher, B. (1860). Beginning of the economy. Moscow: V. Grachev & Ko (in Russ.).
7. Wieser, F. (1889). Der naturliche Werth. Wien: Holder.
8. Rostow, W. W. (1990). The Stages of Economic Growth: A Non-Communist Manifesto (3d ed.). Cambridge: Cambridge University Press.
9. Say, J. B. (2001). A Treatise on Political Economy or the Production, Distribution, and Consumption of Wealth (C. R. Prinsep, Trans.). Kitchener: Batoche Books.
10. Schumpeter, J. A. (1982). The Theory of Economic Development. Moscow: Progres Publishing House (in Russ.).
11. Menger, K. (2008). Foundations of Political Economy. Selected works (G. Tikchin, I. Abezguza, Trans. from German). Moscow: Territorіуа budushcheho (in Russ.).
12. Keynes, J. M. (1992). General theory of percent and money employment. Anthology of economic thought. Moscow (in Russ.).
13. The United Nations (1989). The Montreal Protocol on Substances that Deplete the Ozone Layer. Retrieved from http://www.un.org/ru/documents/decl_conv/conventions/pdf/montreal.pdf

Received 04.10.2013