Discuss the relationship between poverty, growth and the environment

What will be an ideal response?

Answer: Research has shown market failures lead to too much environmental degradation. This, in turn, leads to a relationship between poverty and the environment where as a result of ignorance or economic necessity, communities may unintentionally destroy/exhaust the resources they depend for survival. Environmental degradation also detracts from the rate of economic growth by imposing high costs on developing countries through health-related expenses and reduced productivity of resources.

Xie's answer key:

The poor are usually the main victims of environmental degradation because they more often live a degraded lands. Living in less productive polluted lands gives the poor less opportunities to break the vicious poverty trap. Preventing environmental destruction plays an important role in fighting absolute poverty.

The relationship between environment and growth traces an inverted-U shape, as described by the environmental Kuznets curve. However, some environmental issues like unsafe water and poor sanitation begin to improve even at low income levels. Environmental pollution may lead to slow economic growth, but there may be a third factor for example poor institutions, that cause both high pollution and low income per capita.