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Assessing the socioeconomic sustainability of the industrial model

According to the Brundtland Report, “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” This defini-tion “contains within it two key concepts: the concept of ‘needs’ … and the idea of limitadefini-tions imposed by the state of technology and social organization on the environment’s ability to meet present and future needs” (World Commission on Environment and Development, 1987:54).

Both human needs and environmental equilibrium are strongly related to human well-being and public health. This relationship makes it is possible to consider human health and sustainability as equivalent concepts (Griffith, 2006).

In general, industrial development has a twofold mixed effect on sustainability and human health:

(a) given its effects on total productivity, it increases socioeconomic well-being and the effectiveness of public and private health expenditure and assistance; (b) however, given the degree to which it consumes natural resources and emits pollutants, it damages the environment and public health.

Similarly, the effects of petrochemical development on local and national economies are mixed and con-troversial. Structural change (Adelman, 2000), the transition to science-based production (Wright & Cze-lusta, 2004; Hemais, Barros & Rosa, 2005), the attraction of foreign investment (Omran & Bobol, 2003;

Sánchez-Gil et al., 2004), and the construction of new competitive advantages on the international market (Teece, 1991; Chu, 1994) are all generally regarded as the principal positive contributions of the petro-chemical industry to local and national socioeconomic development. On the other hand, given its level of capital intensity, the expansion of the petrochemical industry worsens income distribution, displaces traditional local activities (such as food and beverages, textiles and leather goods, wood products, paper products, and printing) and reduces the proportion of revenues that remains in the local area. Also, it is one of the main sources of pollution in the entire manufacturing sector and produces long-term adverse effects on human health. However, as far as the long-term adverse effects on human health are concerned, the short- and medium-term socioeconomic advantages of industrialization could be perceived as over-compensating for the increased risk to health, so that the construction of new petrochemical plants is of-ten encouraged by local administrations and welcomed by populations, especially in low-income regions.

Other chapters in this book aim to deepen the understanding of the adverse effects of the petrochemical industry on human health in the three areas studied (see Chapters 5 and 9). In stressing the dynamic con-tent of the concept of sustainability, the present chapter suggests a simple method of assessing the socio-economic sustainability of the petrochemical development model. The interactive effect of members of dif-ferent generations on sustainability suggests that sustainable development is development that maintains its socioeconomic benefits over time. Moreover, environmental and natural resource economists stress the need of greening national environmental accounting and the measurement of sustainable development, so as to consider the depletion of natural resources in the evaluation of national wealth and to estimate the actual ability of domestic productive systems to guarantee “non-decreasing utility – or consumption – over time” (Asheim, 1996; Asheim & Buchholz, 2004). More generally, development is sustainable from a socioeconomic perspective, if it does not diminish well-being over time.

Given that growth in occupational opportunities and reduced emigration were among the main goals (and major expectations) of industrialization policies in Sicily in the 1950s, the following sections discuss three aspects of the productive and social transformation that occurred locally due to the establishment of the petrochemical industry:

• the industrialization model in terms of the dynamic specialization of local economies, measured by the relative weight of petrochemicals within the local manufacturing sector and compared with the economies of Sicily and Italy;

• the effects of industrialization in terms of the evolution of sectoral occupational performances; and

• the effectiveness of petrochemical industrial development policies in inhibiting emigration, com-pared with the industrial policies of the whole of Sicily.

The first aspect is illustrated by comparing trends in local data with regional or national trends, to obtain a quantitative description of the size and magnitude of the local economy’s pattern of specialization in petrochemical activities. The labour force for this industrial sector is used to construct economic speciali-zation indices, such as localispeciali-zation quotients (LQs) (Isard et al., 1998) and manufacturing specialispeciali-zation indexes (MSI). Both measures are obtained by comparing the local sectoral employment rate with the regional or national sectoral employment rate as follows:

LQ = (EiL/EL)/(EiR,N/ER,N) and MSI = (EiL/EmL)/(EpR,N/EmR,N),

where Ei indicates employment in activity i; E indicates total employment; the suffixes L, R, N indicate, respectively, the local, regional or national system; Em indicates employment in the manufacturing sector of the economy and Ep indicates employment in the petrochemical sector of the economy.

Values for LQ or MSI greater than one imply the percentage of the local labour force employed in the ith activity is larger than the same percentage at a higher scale (region or country), indicating that the activity under analysis represents a specialization sector for the local economy. Using census data from 1951 to 2001, 10-year-interval specialization indices are calculated in this chapter, to assess the local dynamics of specialization of the three high-risk areas of Sicily in the petrochemical sector.

To describe the occupational results of the petrochemical industrialization process, data on sectoral em-ployment are compared with total and manufacturing emem-ployment rates. Moreover, the ratio of petro-chemical employment to total and manufacturing employment is presented and discussed.

Given that industrialization generated expectations of a significant reduction in emigration, the effects of the economic dynamics are investigated by: (a) relating petrochemical employment and net migration paths within the three high-risk areas; (b) comparing migration dynamics of the three areas with the rest of Sicily for the period 1958–2005; and (c) estimating the correlation coefficients (r) in two examples:

first, between petrochemical employment and net migration inside the three high-risk areas (10-year observations or averages, 1951–2001) and, second, between local and regional migration (yearly observa-tions, 1958–2005 or 1958–1981).

In what follows, socioeconomic sustainability is assessed by investigating the length and persistence of the alleged positive effects of industrialization on employment and migration in the three high-risk petro-chemical areas of Sicily. The analysis, indicators, data and interpretation of results discussed in the follow-ing sections are summarized in Table 47.

Table 47. Analysis, indicators, data and interpretation of results

Analysis Indicator Data Interpretation

Specialization pattern LQ Sectoral employment and total

employment at local, regional