Syllabus Topic
HSC Topic One - The Global Economy
Globalisation and economic development
environmental sustainability
Globalisation has connected economies into a dense network of trade, investment and knowledge exchange. Lowered barriers have spurred infrastructure growth, lifted millions out of poverty and accelerated technology transfers. Yet these dynamics also amplify environmental pressures, forcing policymakers and businesses to balance growth ambitions with the planet’s limits.
Rising Climate Risks
The past year particular underscores this tension. In 2024, average global temperatures breached the 1.5 °C threshold above pre-industrial levels for the first time, marking the hottest year on record. By April 2025, monthly readings were 1.22 °C higher than average for the 20th century. In Southern California, record-breaking heat helped spark winter wildfires that destroyed over 10,000 homes—an event scientists say was 35 percent more likely because of human-driven warming.
Consumer Power and Corporate Response
Consumers are demanding greener practices at scale. A 2025 survey found 72 percent of global buyers willing to pay for eco-friendly products. In response, major brands are adopting circular supply chains, sourcing renewable materials and committing to net-zero targets. Start-ups focused on clean tech are capturing venture capital at record rates as investors chase both financial returns and climate impact.
Deforestation and Water Stress
Despite progress in certain sectors, natural capital continues to erode. Global deforestation averages 10 million hectares annually, driven largely by agricultural expansion in the Amazon and Southeast Asia. Meanwhile, water scarcity threatens over 2.2 billion people who lack reliable access to safe drinking water—a crisis exacerbated by shifting rainfall patterns and prolonged droughts linked to climate change.
Policy Innovations
Governments are crafting new frameworks to steer globalisation toward sustainability. In 2020, Australia ranked 37th out of 166 nations on the Sustainable Development Goals index. China’s national emissions trading scheme now covers more than four billion tonnes of CO₂ annually, making it the world’s largest carbon market. In Europe, the Carbon Border Adjustment Mechanism introduces tariffs on high-carbon imports, encouraging cleaner production abroad and rewarding green exporters at home.
Financing the Green Transition
Financing remains a pivotal challenge, particularly for developing economies seeking both growth and decarbonisation. Estimates suggest an annual investment gap of nearly USD 2 trillion to meet global climate and biodiversity goals by 2030. To bridge this, multilateral banks are scaling up blended-finance instruments that combine concessional loans with private capital. Meanwhile, debt-for-nature swaps are gaining traction, allowing highly indebted nations to restructure liabilities in exchange for biodiversity protection commitments.
Conclusion
The trajectory of globalisation and economic development now hinges on embedding environmental sustainability. Choices made today will shape whether growth becomes resilient and regenerative—or a runaway path to ecological breakdown. Aligning consumer demand, corporate strategy, public policy and innovative finance is the only plausible route for a cleaner future.
Sources
- “80+ Sustainability Statistics for 2025,” Arbor, May 2025. https://www.arbor.eco/blog/sustainability-statistics
- Sustainable Development Report 2025. https://dashboards.sdgindex.org/rankings
- “ICAP ETS Map,” International Carbon Action Partnership, 2025. https://icapcarbonaction.com/en/ets-map
- “Deforestation Trends,” Global Forest Watch, 2025. https://www.globalforestwatch.org/dashboards/global
- “United Nations World Water Development Report 2025,” United Nations, 2025. https://www.unwater.org/news/un-world-water-development-report-2025-mountains-and-glaciers-water-towers
