Properly understood, economic growth means not just "more" but "better." Living standards rise not just because people consume more goods and services, but because the quality of those goods and services improves. This includes the services of a sound environment. As the United States has grown economically, it has also devoted an increasing share of national income to environmental protection.
To ensure economic progress consistent with environmental concerns, some have advocated the concept of "sustainable development." To some, sustainable development means that each generation should pass on to future generations an undiminished stock of natural resources. However, such a definition fails to take into account the fact that a reduction in the stock of one resource can be worthwhile for present and future generations if it generates more valuable increases in another resource. For example, future generations could benefit if part of a forest is harvested to build a school, yet they might be harmed if the school were built with the last remaining ancient forest. A better definition of sustainable development is growth in which every generation passes on a stock of "net resources" no lower in per-capita value than the stock it received. Net resources include natural and environmental resources as well as knowledge, technology, and physical capital.
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