The relationship between environment and economic development can be viewed from two perspectives: how the environment affects economic development and how economic activities affect the environment. Political stability, government policies, and environmental culture can influence economic development. The negative link between the two lies in how economic activities affect the environment, such as emissions from industrial plants and runoffs from fertilizers.
The relationship between the environment and economic development can be accessed from two different points of view. One view is that factors such as the political climate, government policies, and environmental culture influence economic development. A second view is how activities associated with economic development affect the environment.
Environment and economic development are related in the sense that factors at work in the environment have a huge impact on the rate of economic development of a region. A country with a politically unstable reputation will be unable to attract needed investors and businesses from interested investors both inside and outside the country. A local investor with the resources to set up a business may prefer to take his money elsewhere, to a country with a reasonably stable government. This lack of investment by entrepreneurs is due to the fact that there is no guarantee of security for their investments. Lack of security also means that the business won’t thrive as it would in a country with stable government.
Another way that the environment and economic development are related is that a country with unfavorable government policy will not attract as many investors or promote economic development as a country with favorable government policies. Such policies can be in the form of taxation, import quotas or other forms of regulation. Fiscal policies can be favorable or unfavourable. In some cases, the government of some countries may reduce the fees paid by organizations in certain industries in order to attract investors while encouraging the development of certain industries. One example is the solar energy and other green energy sectors which regularly receive various tax concessions from different Western governments as a form of encouragement.
Certain types of culture help foster the relationship between the environment and economic development. Some cultures are more receptive and open than others. Such open cultures rapidly embrace new ideas, new technologies and other facets that will help the economic and social development of countries. The negative link between these two concepts lies in how the by-products of economic development affect the environment. This linkage includes issues such as emissions from industrial plants, runoffs from fertilizers used on large-scale farms, and various emissions from vehicles used to transport raw materials and finished products.
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