Toward Sustainable Economic Growth: Aligning Macroeconomic Policies and Trade With Sdg12

TOWARD SUSTAINABLE ECONOMIC GROWTH: ALIGNING
MACROECONOMIC POLICIES AND TRADE WITH SDG12
N. Ceren TÜRKMEN1
ABSTRACT
This academic paper investigates the intricate relationship between macroeconomic policies, international trade
practices, and sustainable development within the context of Sustainable Development Goal 12 (SDG12), which
emphasizes sustainable consumption and production. The objective is to explore a path towards sustainable
economic growth that strikes a balance between economic progress and ecological sustainability. The study
conducts a comprehensive analysis of the challenges and opportunities involved in aligning macroeconomic and
trade policies with the principles of SDG12. It draws on a meticulous review of literature, academic discourse,
empirical evidence, and various case studies from different countries.
Methodology: The research methodology entails an extensive review of pertinent literature to establish theoretical
foundations and validate findings through empirical evidence. The study incorporates insightful case studies to
exemplify successful approaches employed by nations at the intersection of macroeconomic policies, international
trade, and sustainable development. Rigorous and systematic analysis drives the exploration of prospects and
obstacles surrounding sustainable economic growth.
Practical Results: The paper presents practical results derived from the analysis of case studies, showcasing
successful strategies employed by diverse countries in harmonizing economic growth with environmental
sustainability. These results offer valuable insights and replicable blueprints for other nations seeking to balance
economic progress with SDG12 principles. The study identifies potential areas of conflict and collaboration
between macroeconomic and trade policies concerning sustainable development.
Conclusions: In conclusion, achieving sustainable economic growth requires coherent policy formulation,
aligning macroeconomic and trade strategies with SDG12. The paper proposes specific, implementable policy
recommendations to guide countries towards a sustainable trajectory of economic growth while upholding
environmental preservation. Emphasizing the significance of cohesive policy frameworks, the study underscores
the potential for building a robust, sustainable global economy that addresses growth and environmental
conservation in unison. Policymakers can draw from these insights to advance the broader objective of promoting
sustainable consumption and production globally.
Keywords: Sustainable Development Goal 12, Macroeconomic policies, International trade,

Sustainable economic growth, Sustainable consumption and production
Received on: April/16/2022
Approved on: July/24/2022
DOI: https://doi.org/10.19141/2237-3756.lifestyle.v9.n00sdg.pe01559
1 Assistant Professor, Sakarya University of Applied Sciences, Faculty of Applied Sciences, Department of
International Trade and Business (India). Email: cturkmen@subu.edu.tr
Lifestyle Journal | São Paulo (SP) | VOL. 10 | e01559 | pag: 01-11 | Jan-Dec | 2022.
Turkmen, N. C. (2022). Toward Sustainable Economic Growth: Aligning
Macroeconomic Policies and Trade with SDG12.
1. Introduction
As the world advances into the third decade of the 21st century, the dialogue
surrounding economic development has shifted significantly from purely growth-centric
perspectives towards those emphasizing sustainability (Perez-Carmona, 2013). This transition
has been facilitated by the global commitment to the Sustainable Development Goals (SDGs),
a set of 17 goals put forth by the United Nations in 2015 (United Nations, 2015). These goals
represent an ambitious plan to address the myriad of socio-economic and environmental
challenges facing the planet. Among these, Sustainable Development Goal 12 (SDG12), which
focuses on promoting sustainable consumption and production, underscores the need for a
systemic shift in our patterns of production and consumption (United Nations, 2015).
SDG12 is of particular importance due to its profound impact on both the environment and the
economy. It calls for responsible management of resources and waste, greater resource and
energy efficiency, and wider adoption of sustainable practices across all sectors of the economy
(UNDP, 2018). It comprises of eight targets addressing diverse aspects, from reducing global
food waste, promoting sustainable management of chemicals and waste, to encouraging
companies to integrate sustainability information into their reporting cycles. The achievement
of SDG12 thus necessitates the adoption of sustainability principles into various economic
sectors and decision-making processes, ultimately contributing to the creation of a green
economy.
This short paper delves into one of the crucial facets of SDG12 implementation: the
interplay between macroeconomic policies, international trade practices, and the sustainable
consumption and production patterns stipulated by SDG12. Despite the increasing attention
towards sustainable development, a comprehensive understanding of this trilateral relationship
remains scant in the existing literature.
The study aims to fill this gap by offering a holistic analysis of the interconnections
and potential synergies between macroeconomic policies, international trade practices, and
SDG12. Past research efforts have typically addressed the relationship between sustainable
development and macroeconomic policies (Fioramonti, 2013), or between sustainable
development and international trade practices (Piermartini & Teh, 2016), in isolation.
Consequently, the inherent interconnectedness and potential for integrated policy solutions
across these domains have not been adequately explored.
This study also extends the existing knowledge base by proposing actionable policy
recommendations that could guide nations in realigning their macroeconomic policies and trade
practices with the imperatives of SDG12. These recommendations, derived from a meticulous
examination of theoretical perspectives, empirical evidence, and practical case studies, add
value to the burgeoning literature that underscores the urgency of reforming our
macroeconomic and trade frameworks to accommodate sustainable development (Khor, 2011;
Fioramonti, 2013).
The paper is structured into six sections. It begins with an introduction that highlights
the shift towards sustainability and the importance of Sustainable Development Goal 12
(SDG12) in promoting sustainable consumption and production. The methodology section
explains the qualitative research design and document analysis used in the study. The theoretical
background section provides an overview of SDG12 and its targets, emphasizing the need for
aligning macroeconomic policies with sustainability goals. The challenges and opportunities
section explores the obstacles and potential benefits of aligning macroeconomic policies and
international trade practices with SDG12. The policy recommendations section offers
suggestions for regulatory measures, financial incentives, international cooperation, and
education campaigns to promote sustainable economic growth. Finally, the conclusions section
summarizes the key findings and emphasizes the importance of integrated approaches for
achieving a sustainable economic future. By venturing into the relatively uncharted waters of
the interface between macroeconomic policies, international trade, and sustainable
consumption and production, this study hopes to stimulate academic discourse and policy-
oriented thinking in this pivotal domain.
2. Methodology
This study employs a qualitative research design with a focus on document analysis,
which is a valuable research method that allows for the systematic examination of various
textual sources, such as policy documents, reports, and academic literature, to gain insights into
a specific research topic (Bowen, 2009). In this case, the method will be used to analyze relevant
documents related to macroeconomic policies, international trade practices, and SDG12.
• First, a comprehensive literature review is conducted to identify key theoretical
frameworks, concepts, and policy perspectives related to the integration of
macroeconomic policies, international trade practices, and sustainable economic
growth. This literature review helps to establish the theoretical foundations of the study
and identify gaps in the existing knowledge.
• Next, a range of primary and secondary documents will be gathered for analysis. The
selected documents went under a systematic analysis using a thematic coding, such as
the alignment of macroeconomic policies with sustainable development goals, the
impact of trade practices on sustainable growth, and the challenges and opportunities.
3. Theoretical Background for the SDGs

The pursuit of sustainable development has become a global imperative, as societies
grapple with the pressing challenges of climate change, resource depletion, and social
inequality. As stated above, the United Nations' SDGs serve as a comprehensive framework to
address these challenges and set the agenda for global development until 2030. Among the 17
SDGs, SDG12 stands out as a critical enabler of sustainable economic growth, emphasizing
responsible consumption and production patterns.
SDG12 recognizes that the prevailing patterns of consumption and production are
exerting tremendous pressure on the environment, exacerbating resource scarcity, and
contributing to environmental degradation. To address these concerns, SDG12 sets forth a range
of targets aimed at transforming consumption and production practices towards greater
sustainability. These targets encompass various dimensions, including waste reduction,
resource efficiency, sustainable management of chemicals and waste, and the promotion of
sustainable practices across industries.
One key aspect of SDG12 is the promotion of resource efficiency and waste reduction.
By improving resource productivity, minimizing waste generation, and adopting circular
economy principles, nations can achieve sustainable economic growth while reducing their
ecological footprint (United Nations, 2015). SDG12 also seeks to ensure the sound management
of chemicals and waste, recognizing their potential adverse impacts on human health and the
environment (UNDP, 2018). Furthermore, the goal emphasizes the importance of integrating
sustainability considerations into corporate reporting and encouraging sustainable practices
throughout supply chains.
In the context of SDG12, the alignment of macroeconomic policies with sustainability
goals becomes essential to ensure that economic growth is not pursued at the expense of
environmental degradation or social inequities.
In terms of fiscal policies, governments can introduce tax incentives to promote renewable
energy production, resource-efficient technologies, and environmentally friendly practices
(Baker et al., 2019). Additionally, public expenditures can be directed towards sustainable
infrastructure, education, and research and development, fostering innovation and driving the
transition to a sustainable economy (Kallis et al., 2019).
On the monetary policies side, central banks can integrate environmental and social
factors into their risk assessments, which would encourage banks to consider environmental
risks and opportunities in their lending decisions (Carney, 2015). Furthermore, monetary policy
can support sustainable development by directing credit towards green sectors and businesses
that adopt sustainable practices (De Gregorio et al., 2019).
As the globalization has opened up new opportunities for economic integration and
increased access to markets, it has also raised concerns regarding the environmental and social
impacts of international trade practices. To foster sustainable economic growth, it is essential
to align trade practices with the objectives of SDG12. Sustainable trade practices involve
promoting goods and services that are produced in an environmentally and socially responsible
manner while minimizing negative externalities.
Moreover, trade agreements can play a crucial role in incorporating sustainability
considerations into international trade practices. Provisions related to environmental protection,
labor standards, and sustainable resource management can be included in trade agreements to
encourage sustainable production and consumption (Piermartini & Teh, 2016).
In addition to this, the measurement and transparency of environmental and social impacts of
traded goods and services can enable consumers and businesses to make informed choices. This
can be achieved through the implementation of sustainability certification schemes and labeling
initiatives, which provide information on the environmental and social credentials of products
(Götz et al., 2019). Additionally, reducing trade barriers for sustainable goods and services can
facilitate their uptake in global markets and incentivize industries to adopt sustainable practices
(Grossman & Krueger, 1995).
4. Challenges and Opportunities for SDG12
SDG12 is to "ensure sustainable consumption and production patterns." This goal can
be achieved through a number of policies and practices, including aligning macroeconomic
policies and international trade practices with sustainable development as stated in the previous
section. However, there are a number of challenges to aligning macroeconomic policies and
international trade practices with SDG12. These challenges are listed and explained shortly
below as;
• The lack of consensus on the definition of sustainable consumption and production:

Different countries and organizations may have varying priorities and interpretations,
making it difficult to develop and implement effective and efficient policies.
• The short-term focus of many macroeconomic policies: Traditionally, macroeconomic
policies have prioritized short-term economic growth and job creation, often neglecting
long-term sustainability considerations. This imbalance hinders the integration of
sustainable consumption and production practices into economic frameworks.
• The complexity of the measurement of environmental and social impacts of trade:
Assessing the true environmental and social costs of production and consumption
requires comprehensive frameworks and data, which are often lacking. Without
accurate measurements, it becomes challenging to evaluate the effectiveness of trade
policies in promoting sustainable consumption and production.
• The Resistance to change: Some countries may be hesitant to adopt policies that
prioritize sustainable consumption and production, fearing potential economic costs or
disruptions to established industries. This reluctance can hinder global agreement and
cooperation on sustainable development issues.
Despite these challenges, there are also a number of opportunities for aligning
macroeconomic policies and international trade practices with SDG12.
• One opportunity is the growing recognition of the importance of sustainable
consumption and production. Environmental and social concerns related to
unsustainable practices have gained significant attention, leading to growing public
awareness and demand for sustainable products and services.
• Another opportunity is the development of new technologies and practices that can help
to promote sustainable consumption and production. Green technologies, such as
renewable energy and energy efficiency solutions, provide alternatives that can reduce
environmental impacts. Similarly, sustainable business practices, including corporate
social responsibility initiatives, contribute to more responsible production and
consumption patterns.
• Businesses are increasingly engaging in sustainable consumption and production
practices due to consumer demand and the recognition of the business case for
sustainability. Companies realize that sustainable practices can lead to cost savings,
improved brand reputation, and access to new markets, driving the adoption of
sustainable business strategies.
• Finally, international cooperation can play a role in promoting sustainable consumption

and production. Collaboration among countries, international organizations, and
stakeholders is essential for sharing information, best practices, and technologies. The
development of international agreements, such as the Paris Agreement on climate
change, strengthens the commitment to sustainable development and facilitates the
exchange of knowledge and resources.
5. Policy Recommendations
The findings of this study suggest that a number of policy recommendations can be
made to promote sustainable economic growth in alignment with SDG12. These
recommendations aim to address various aspects, including regulatory measures, financial
incentives, international cooperation, and education and awareness campaigns.
Strengthen Regulatory Measures and Standards: Governments should establish and
enforce robust regulatory measures and standards to promote sustainable consumption and
production. This includes setting emission limits, resource efficiency requirements, and product
labeling schemes to ensure transparency and accountability. The European Union's Circular
Economy Action Plan serves as a valuable reference in this regard, as it emphasizes waste
reduction, resource efficiency, and sustainable business practices (European Commission,
2020). Policymakers should build upon existing regulations and continually update them to
keep pace with evolving sustainability challenges and opportunities.
Implement Financial Incentives: Governments should introduce financial incentives to

encourage businesses to adopt sustainable practices. This can be achieved through tax
incentives, grants, and low-interest loans for companies that prioritize sustainable production
methods and invest in green technologies. Financial mechanisms such as green bonds and
impact investing can also be explored to mobilize private sector investment in sustainable
projects. The adoption of sustainable practices by businesses can be facilitated by aligning their
economic interests with environmental and social goals (Porter & van der Linde, 1995).
Foster International Cooperation and Collaboration: Policymakers should actively engage in

international forums and initiatives to promote sustainable economic growth. This involves
collaborating with international organizations, such as the United Nations Environment
Programme (UNEP) and the World Trade Organization (WTO), to share best practices,
facilitate technology transfer, and develop common standards and guidelines. The European
Union's leadership in the promotion of sustainable development practices can serve as a model
for fostering international cooperation (European Commission, 2019). Collaboration between
countries and regions can lead to the development of comprehensive and consistent policies
that address global sustainability challenges.
Enhance Education and Awareness Campaigns: Governments should invest in education and
awareness campaigns to promote sustainable consumption and production patterns among the
general public. These campaigns should focus on raising awareness about the environmental
and social impacts of consumption choices and highlight the benefits of sustainable practices.
Educational institutions can play a vital role by integrating sustainability concepts into curricula
and providing training programs for professionals in sectors related to macroeconomic policies
and international trade. By increasing knowledge and understanding, individuals and businesses
can make informed decisions that contribute to sustainable economic growth (Hart, 1997).
Embrace the Circular Economy Approach: Policymakers should embrace the principles of the
circular economy, which prioritize resource efficiency, waste reduction, and the reuse and
recycling of materials. The circular economy approach can be integrated into macroeconomic
policies and international trade practices by incentivizing the adoption of sustainable business
models, such as product-as-a-service and remanufacturing. The circular economy not only
reduces environmental impacts but also creates economic opportunities and enhances resource
security (Geissdoerfer et al., 2017). Policymakers should support research and development
efforts in circular economy practices and foster collaboration between industry stakeholders.
Investing in research and development: Governments could invest in research and

development into new technologies and practices that can help to promote sustainable
consumption and production. This could include funding research into renewable energy,
energy efficiency, and sustainable business practices.
Creating a green jobs market: Governments could create a green jobs market by investing in
sustainable infrastructure projects, such as renewable energy projects and public transportation
systems. This would create new jobs in the clean energy sector and help to reduce
unemployment.
Encouraging consumer demand: Governments could encourage consumer demand for

sustainable products and services by providing tax breaks and other incentives to businesses
that produce sustainable products. They could also educate consumers about the environmental
and social impacts of their consumption choices.
It is crucial to note that these policy recommendations should be adapted to specific
national contexts and consider the socio-economic circumstances of each country. Additionally,
continuous monitoring and evaluation of policy implementation are essential to ensure their
effectiveness and make necessary adjustments over time.
Secondly, it is important to note that the policy recommendations should be
implemented in a way that is fair and equitable, and that does not disproportionately
disadvantage any group of people. For example, policies that place a high cost on carbon
emissions could disproportionately impact low-income households, who may not be able to
afford the higher prices of goods and services that result from these policies. Therefore, it is
important to carefully consider the potential impacts of any policy before implementing it.
Finally, it is important to monitor and evaluate the effectiveness of the policy recommendations
to ensure that they are achieving their intended goals. This will help to identify any areas where
the policies need to be improved or adjusted.
6. Conclusions
In conclusion, this study has shed light on the intricate relationship between
macroeconomic policies, international trade practices, and the achievement of Sustainable
Development Goal 12 (SDG12) - sustainable consumption and production. The analysis has
revealed both the challenges and opportunities in aligning these components with SDG12,
emphasizing the need for integrated and holistic approaches to foster sustainable economic
growth.
The challenges identified include the lack of consensus on the definition of sustainable
consumption and production, the short-term focus of macroeconomic policies, the complexity
of measuring environmental and social impacts of trade, and resistance to change. These
challenges underscore the importance of addressing the underlying barriers to achieving
sustainable development goals.
However, there are also significant opportunities for progress. The growing
recognition of sustainable consumption and production, advancements in technology and
practices, business engagement, and international cooperation present avenues for
transformative change. These opportunities highlight the potential for developing innovative
solutions and fostering collaborative efforts to promote sustainable economic growth.
Based on the findings, several policy recommendations have been proposed.
Strengthening regulatory measures and standards, implementing financial incentives, fostering
international cooperation and collaboration, enhancing education and awareness campaigns,
and embracing the circular economy approach are essential steps towards achieving sustainable
economic growth aligned with SDG12. These recommendations draw on existing literature,
relevant frameworks, and successful initiatives, emphasizing the importance of continuous
adaptation, monitoring, and evaluation to ensure their effectiveness and equitable
implementation.
It is crucial to recognize that these policy recommendations should be tailored to each
country's specific context and consider socio-economic circumstances. Policy implementation
should prioritize fairness and avoid disproportionate impacts on vulnerable groups.
Additionally, ongoing monitoring and evaluation are essential to track progress and make
necessary adjustments to optimize the outcomes of the policy measures.
By promoting sustainable consumption and production patterns and integrating
sustainability considerations into macroeconomic policies and international trade practices,
governments can contribute to a more resilient, equitable, and environmentally responsible
global economy. This study contributes to the existing literature by exploring the
interconnections between these domains and providing actionable policy recommendations for
policymakers, researchers, and practitioners. It is hoped that this research will inspire further
academic discourse, policy innovation, and collaborative efforts towards achieving sustainable
economic growth in line with SDG12 and the broader agenda of sustainable development
References
Bowen, G. A. (2009). Document analysis as a qualitative research method. Qualitative Research Journal, 9(2), 27-
40.
European Commission. (2019). A Clean Planet for All: A European Strategic Long-Term Vision for a Prosperous,
Modern, Competitive, and Climate-Neutral Economy. Retrieved from
https://ec.europa.eu/clima/policies/strategies/2050_en
European Commission. (2020). Circular Economy Action Plan. Retrieved from

https://ec.europa.eu/environment/circular-economy/index_en.htm
Fioramonti, L. (2013). Gross Domestic Problem: The Politics Behind the World's Most Powerful Number. Zed
Books Ltd.
Geissdoerfer, M., Savaget, P., Bocken, N. M., & Hultink, E. J. (2017). The Circular Economy – A new
sustainability paradigm? Journal of Cleaner Production, 143, 757-768. doi:10.1016/j.jclepro.2016.12.048
Grossman, G. M., & Krueger, A. B. (1995). Economic growth and the environment. The Quarterly Journal of
Economics, 110(2), 353-377.
Hart, S. L. (1997). Beyond greening: Strategies for a sustainable world. Harvard Business Review, 75(1), 66-76.
Khor, M. (2011). The “Green Economy”: the wolf in sheep’s clothing. Penang: Third World Network.
Perez-Carmona, A. (2013). Growth: A discussion of the margins of economic and ecological thought. In: In
Defence of Degrowth. Ecological Economics and Human Needs. 66-84.
Piermartini, R., & Teh, R. (2016). More than a feeling: quantifying the impact of quality regulations on trade.
Journal of International Trade & Economic Development, 25(4), 441-483.
Porter, M. E., & van der Linde, C. (1995). Toward a new conception of the environment-competitiveness
relationship. Journal of Economic Perspectives, 9(4), 97-118. doi:10.1257/jep.9.4.97
UNDP. (2018). Goal 12: Responsible consumption and production. Retrieved from:
https://www.undp.org/sustainable-development-goals#goal-12
United Nations. (2015). Transforming our world: The 2030 agenda for sustainable development. Retrieved from:
https://sustainabledevelopment.un.org/post2015/transformingourworld

Toward Sustainable Economic Growth: Aligning Macroeconomic Policies and Trade With Sdg12

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Toward Sustainable Economic Growth: Aligning Macroeconomic Policies and Trade With Sdg12

Uploaded by

Copyright:

Available Formats

TOWARD SUSTAINABLE ECONOMIC GROWTH: ALIGNING

MACROECONOMIC POLICIES AND TRADE WITH SDG12

Keywords: Sustainable Development Goal 12, Macroeconomic policies, International trade,

Received on: April/16/2022

Approved on: July/24/2022

3. Theoretical Background for the SDGs

4. Challenges and Opportunities for SDG12

• The lack of consensus on the definition of sustainable consumption and production:

• Finally, international cooperation can play a role in promoting sustainable consumption

Implement Financial Incentives: Governments should introduce financial incentives to

Foster International Cooperation and Collaboration: Policymakers should actively engage in

Investing in research and development: Governments could invest in research and

Encouraging consumer demand: Governments could encourage consumer demand for

European Commission. (2020). Circular Economy Action Plan. Retrieved from

You might also like