Towards a Steady State Economy in Sri Lanka

Abstract

In general, it is desired that Sri Lankan economy shows growth. A growing economy brings waste production which leads environmental pollutions such as air pollution water pollution etc. At present, increasing population in Sri Lanka requires more natural resources to meet the market demand. The ultimate result is an imbalance in the biological cycles, and an irreversible change in both economic process and environment. An irreversible economic process increases entropy. Ultimately, the entropy will reach its maximum value. Then everything will become standstill since there would not exist more energy to continue the economic process. As a solution, the concept of a steady state economy is structured.Sri Lankan economy was assessed within steady state economics to evaluate the present economic situation of Sri Lanka. A statistical analysis was carried out on Gross Domestic Product (GDP), population, energy use, CO2 emission through time series analysis and regression analysis,to identify the extent to which Sri Lankan economy has deviated from a steady state economy. Regression analysis indicates a strong relationship between GDP and CO2 emission. Total population size in Sri Lanka is increased from 9.9 million in 1960 to 20.48 million in 2013. CO2 emission per capita is increased from 0.25 metric tons in 1960 to 0.65 metric tons in 2010. CO2 emission is increased from 2259 kiloton in 1960 to 12831 kiloton in 2010. Rapid growth rates, CO2 emissions, population growth rates reveal that Sri Lankan economy is far apart from the concept of steady state.Transition to a steady state economy would require the implementation of new policies to restrict the utilization of nonrenewable resources. On the other hand it is mandatory to have legal regulations encouraging renewable resource use, energy efficiency, and reuse and recycling.