Section C The Study of Conservation-oriented Economy under the Framework of Sustainable Development Theory

1 The Introspection and Denial of the Traditional Development on the Basis of the Sustainable Development Theory

The sustainable development emphasizes coordination of the population, resource, economy, environment, technology and society. It is the summary of the previous experiences on economic, resources and environmental development. It aims to reach an optimal development of economy, ecology and society with minimized development cost for the sake of offspring benefits. Such development viewpoint abandons the previous ideas of pure pursuit of economic growth, and its formation can be traced back in the development of the economics theory.

The economics concerns with the production, exchange, consumption and service, which are all necessary in human life. We have been living in a healthy and sustainable eco-system. Over the past decades, we paid all of our attention on one side of the industrialization, the result of which has caused some catastrophes.

The traditional economics concerns about what, how and why to produce. Although the issue of shortage is one of its basic ideas, it is still a science of selectivity. The land, the production, the labor and the salary will never increase when the land becomes shortage recourse and cannot be made full use of. In spite of this, Smith is still optimistic about that. He claims that the division of labor can improve labor productivity, stimulate technology progress and new machine innovation, hence increasing returns. Besides, the accumulation of capital will increase the population of labor, and that will control the decrease of the returns caused by the shortage of land. Compared with the time of Smith, when industrialization is just at the beginning, the time of Ricardo is the one when industrialization is flourishing. The productivity rate as well as the foreign trade grows rapidly. He argues that the profit is inclined to go down with the accumulation of the capital, population, wealth and the development of the society. If it went down to near zero, all such accumulation would stop, and the whole society would be static with no development of production, capital and population. Although his view is not as positive as Smith, he still holds confidence with the future development. The progress of agriculture and industry, the innovation of the new machines, and the increase of the foreign trade will hinder the decrease of the profit. The most pessimistic one is Malthus, who believes the relation between population growth and income increase is similar to the relation between geometric series and arithmetic progression. Because of the shortage of land and decrease of the marginal returns, the trend of population growth will be hindered by the space and nutritional shortage, resulting in poverty and disaster. The unbalance of two different increase rates will influence the progress and development of the society.

Although Malthus holds a pessimistic attitude on sustainable development, most economists still maintain that the shortage of the resource would not be an insurmountable gap between economy and human society. The neoclassical economists such as Marshall and modern economists keep an optimistic attitude about sustainable development. They posit that the decrease of return caused by human behavior, such as the progress of knowledge and technology, the population of education, the new innovation, the expansion of the market would surpass the decrease trend of the natural resources such as land. The development of the economy can delimitate poverty and ignorance. Although there will appear recession, the economy is still progressing year by year. After World War Two, the priority of the developed countries is enlarging job market, reinvigorating economy and improving economic growth rate, therefore, the main factor determining the growth is technology progress. Seldom do people pay attention on the change of the environment and ecosystem under the impact of human behavior.

Under such economic background, the companies and enterprises calculate their input-output ratio on the basis of the behavior of exploiting and damaging the environment. Their one-sided pursuit of high profits does not take social and ecological benefits into consideration. Therefore, such behaviors only focus on the sustainable development of business profits, instead of harmonious development. The behaviors of both developed and developing countries have caused a serious disaster in ecosystem, because what they pursuit is only the increase of GNP and GDP, considering it as the only index to judge country economic strength and development level. Internationally, natural resources and primary products are the out-put of the developing countries, while finished industrial products are the out-put of the developed ones. Some of the transnational corporations in developed countries will plunder resources in those developing countries in order to pursuit high profits. They even transmit the businesses with high pollutants into those countries, causing pollution in the areas and threatening the global ecosystem. Decades of experiences have proved that those serious ecological economic problems such as the run-out of the resources, the deterioration of the environment and the degradation of eco conditions are by-products of income and wealth increase.

The development of the past half century has demonstrated that too much attention has been paid the development of economy. The economic growth in developed and developing countries as well as market-oriented and planned-oriented nations is all based on the prerequisite that natural resources can be unlimitedly supplied. The economists represented by Marshall assume that the advance of the technology can discover the new energy and materials and make the best use of them. While the expansion of the market can solve the problems of production, exchange, consumption and service may cause resource shortage.

It is not until the publishing of the thesis Silent Spring and Growth Limits that economists have become aware of the importance of sustainable development. In the early stage of 1990s, the development of the industries has been deteriorating our environment, causing the problems such as resource shortage, pollution, acid rain expansion, water shortage, soil erosion and desertification, to name just a few examples. We have paid high prices on such environmental problems, which to some extent, have threatened our survival and development, raising an alarm for all of us. Under such circumstance, the discussion of the sustainable development reaches a climax in the world again, the result of which is that the traditional economy growth mode that conquers nature and plunders resources at the expense of the environment has been challenged and questioned. Countries all over the world have come into the consensus that we should protect environment and make business flourish under the harmony of the human and nature, implementing the goal of sustainable development in harmony with the ecosystem and economy.

As people in economics are business men, the relations between them are based on the market exchanges, in which they will weigh costs and benefits rationally for their own interests, and make a probable choice and decision, such as how to maximize profit. Based on such costs and benefits oriented economics, what economists focus is the greatest economic benefits of the business parties, instead of the social benefits. This will result in the consequence of ignorance of the consumption of limited resources and deterioration of environment. On the contrary, different with traditional economics, the sustainable development focuses on the recycle of the products and services and pays more attention on the development that benefits human health, social welfare and personal improvement.

Therefore, the concern of over-exploitation, the environmental problems as well as the awakening of ecological consciousness are the direct cause of sustainable development economic theory. From the history of the sustainable development and its evolution, formation and innovation in economics, we raise awareness that sustainable development has become the common goal of mankind. This requires the guide of sustainable development in establishing a harmonious relationship between human and nature. We can only make a consensus under the guide of sustainable development that promotes clean production and appropriate consumption, creating a mode directed by the knowledge economy and based on good human-nature relationship. By so doing, we can find out the basis of sustainable theories, hence continually improving the sustainable development system.

2 The Design of Sustainable Developing Mode

Since the 1990s, Europe, the United States and Japan developed circular economy, set up resource circular society, and treated it as an important realization form for implementing strategy of sustainable development. Sustainable economy means to follow the principle of ecology, reasonably use natural resource, and achieve ecologicalization of economic activity. Circular economy is a kind of ecological economy, which integrates cleaner production and waste utilization together. Its basic strategy is to coordinate production and consumption, optimize the high efficiency of product instead of high production, high consumption and high abandonment of inefficient products. Circular economy's marked feature is the low input of resources, high utilization and low discharge of waste, aiming to resolve the conflict between environment and development.

Circular economy is a closed loop type of material flow mode: “resource-consumption-product-renewable resource”, corresponding to traditional economic open style of material flow mode: “resource-consumption-product-waste discharge”, its technical characteristics being consumption and recycling of resource, and its core being to promote the utilization efficiency of ecological environment.

The technical entity of circular economy requires enterprises to add a feedback mechanism to the linear technology paradigm base of traditional industry. In micro gradation, enterprises need to extend the production chain lengthways from production to waste recycling; expand technique system breadthwise to recycle and dispose wastes. In macro gradation, we need to achieve networking of the entire social technical system, and cross industry recycling.

While promoting resource utilization efficiency is the cornerstone of circular economy's technical system, making renewable resource, recycling and employing clean disposal are the methods of it. As high tech is developing, circular economy not only aims at economy growth and national defense, but also at environmental protection and recycling. It is also a kind of technical revolution, a new economic developing mode, helping achieve harmony between human and nature.

Circular economy demonstrates several characteristics:

New systematic perspective. While circulation is a motor process in a particular system, circular economy is a big system consisting of human, nature and scientific technique. Circular economy requires people to treat themselves as a part of this system, follow the principle of objective law, and build the ecological system, maintain the sustainable development within the big system.

New economic perspective. Circular economy demands ecological law to guide economic activity instead of mechanical engineering law. In ecological system, a circulation of over resource consumption is a vicious circle, leading to ecological degradation, however, only virtuous cycle could maintain a balanced development of the ecological system.

New concept of value. Regarding environment, circular economy treats it as the foundation of human living, a virtuous cycle system we have to protect; With regard to technique, we should not only consider its exploitation ability, but also recovery ability; As far as human development is concerned, we should not only consider our conquest ability, but also the ability to get along with nature.

New production concept. The productive concept of circular economy is to consider environment's bearing capacity, save resource, promote utilization, and create social wealth. During the production process, we need to follow “3 R” principles, namely, “reduce, reuse and recycle”: reduce resource use from the input stage; reuse waste in different ways and different places; recycle waste to reduce discharge. At the same time, we should use renewable energy instead of non-renewable resource, expand knowledge input instead of material input, try to provide a good environment for production, improve people's living quality, and achieve harmony between human and nature.

New consumption concept. Circular economy requires enterprises to abandon the old concept of “hell-bent production, hell-bent consumption”, advocate moderate consumption. Meanwhile, production and consumption of disposable product making of non-renewable resource should be restrained by tax revenue and political means.

3 Two Research Approaches of Sustainable Development

In June, 2005, China proposed the decision of “establish conservation oriented society” at the international conference of building conservation oriented society, and treated it as an important strategic mission of economic growth in the long term. Premier Wen Jiabao, vice premier Zeng Peiyan, director of Development and Reform Commission Makai, and director of development research center, Wang Mengkui delivered speeches on the topic of establishing conservation oriented society. This important decision will promote the research on conservation oriented society theory.

Recently, Chinese economics circles focus on sustainable development theory and other relevant theories, which can be divided into two parts:

3.1 Changing the style of economic increase

Chinese traditional style of economic increase is unsustainable. High input, high speed results in unbalance of total social supply, aggregate demand, accumulation of inventories and generates waste of resource. Besides, more and more investments not only ignore environmental protection input, which reduce the efficiency of industrial structure adjustment, but also ignore the building of infrastructure.

Due to the publicity, uncertainty and externality of resource, market mechanism cannot adjust some kind of economic activity, which requires government to enforce macroscopic readjustment and control. The researches are as follows:

How to make resource exploitation follow scientific principle, not exceed the bearing capacity of environment;

How to establish low consumption, high efficiency circular economy, and implement resource conservation oriented strategy;

How to correctly choose technical development direction, and maintain its progressiveness;

How to transfer environmental cost into value, to punish relevant enterprises by paying for the pollution.

3.2 Establishing a new resource conservation oriented national economic system

The core of sustainable development is resource saving. Resource is the basic material condition for human society, but it is limited. Thus, resource reserve is the real wealth. The researches of establishing a new resource conservation oriented national economic system are as follows:

How to establish an intensive agricultural production system which can save land and water to promote ecological virtuous cycle;

How to establish an clean industrial production system which can save energy and material to make overall benefits;

How to establish a high efficiency, conservation oriented transportation system which can save energy;

How to improve people's educational level;

How to establish an environmental protection system which aims at optimizing environmental quality.