Competitive and sustainable growth: logic and inconsistency

The European Union is pursuing a competitive and sustainable development model that combines insights from environmental as well as economic analysis. The rhetoric of this model is attractive: European development should be ‘sustainable’ both in terms of its use of labour and environmental resources, and in terms of the location of economic activity. European policy, therefore, should encourage industries to use more labour and fewer resources, as well as to create jobs at the local level in order to internalize market externalities. Despite the appeal of such rhetoric, the implementation of this new development model poses both analytical and distributional concerns: the assumptions of environmental and economic analysis come into theoretical contradiction and the economic effects of the policy are socially undesirable. The solution is to abandon the competitive and sustainable development model, and to pursue competitive growth and sustainable resource use as separate policy objectives.