Ioannis Souliotis
Nikolaos Voulvoulis- Centre for Environmental Policy, Imperial College London, London, United Kingdom
Addressing complex global environmental and socio-economic challenges requires a fundamental transition to sustainability, as current systems are inadequate to manage climate change, poverty, inequality, and resource depletion. For decades, research has linked economic development to environmental degradation, reinforcing the belief that economic growth and environmental protection are inherently in conflict. Consequently, opposing perspectives have emerged: one advocating limits to growth to safeguard the environment, and another asserting that technological progress can sufficiently substitute natural for man-made capital. Despite growing awareness of ecological decline, the absence of a compelling vision of a sustainable future, beyond dystopian scenarios of collapse or business-as-usual projections focused on incremental change, continues to delay real progress. Through a systems-thinking lens, defined here as an approach that views social, economic, and ecological phenomena as interdependent components of a single dynamic system shaped by feedback loops, nonlinear interactions, and emergent properties, we revisit the relationship between growth and environmental degradation, outline a new vision for sustainable development that recognises humans as part of nature, and explore the role of economics and policy in realising this vision. We argue that only systemic change and integrated approaches grounded in a deeper understanding of human–nature interactions can deliver the transformations needed to improve both planetary health and societal prosperity.
1 Introduction
According to the latest Global Assessment on Biodiversity and Ecosystem Services by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) “nature is declining globally at rates unprecedented in human history–and the rate of species extinctions is accelerating, with grave impacts on people around the world” (IPBES, 2019). Deforestation, intensive agriculture, and overextraction of natural resources among other pressures considered by the UN Environment’s Global Environment Outlook series reports (UNEP, 1997; UNEP, 2000; UNEP, 2002; UNEP, 2007; UNEP, 2012; UNEP, 2019) have been producing cumulative negative effects on the environment. Coupled with climate change, extinction of species and loss of land and water biodiversity, create the conditions for ecosystem collapse, with catastrophic impacts to human development. Such collapse has been in the making for more than 100 years, with global population and economic output increasing by more than 368% and 7,172% respectively between 1900 and 2018 (Morgan and Fullbrook, 2019). While there is increasing consensus that changes in the organization of human society and economy are needed to stop climate change and the degradation of the natural environment (Voulvoulis et al., 2022), and to avoid ecosystem collapse, based on two different normative ideals, economic growth and degrowth, the two main narratives put forward project opposing views of the relationship between economic growth and environmental protection (Sandberg et al., 2019).
The interactions between economy and environment are extremely complex (Rosser, 2001; Costanza et al., 1993), and these two academic and political schools of thought (Raza et al., 2016) struggle to find common ground, looking at these interactions through different normative ideals and reference points. Indeed, the subject of economic growth is terribly polarizing, and a sterile debate between these communities, infused by austerity visions of degrowth (Phillips, 2019; Davidson, 2000) versus GDP-driven business as usual endless growth (Lietaert, 2010; O’Neill, 2012; Kallis et al., 2018), may have contributed to why progress on sustainability has not been at pace with the urgency of the challenges. Despite the rise in the importance and centrality of global environmental concerns, especially climate change and issues covered by the Sustainable Development Goals, norms or institutions that demand or recognize great power responsibility are also notably absent (Dunlap et al., 2016). This could be down to a lack of congruence between systemic and environmental “great powers,” weak empirical links between action on the environment and the maintenance of international order, and no clear vision for an equitable, prosperous, and sustainable future for everyone on the planet. The sustainability transition is ultimately about a ‘social mandate’: where people across civil society give their informed consent for the change, knowing what it means for their lives and how they can participate in it too. It cannot happen without the consent and active support of people; through a unified vision that leads to better lives. Instead, an increasingly polarized political environment, with nationalist movements, socialism and climate activism has rapidly been growing in power worldwide (Dunlap et al., 2016; Conversi, 2020; Rekker, 2021).
“Sustainability”, a term traced back to the 17th century (Estoque, 2020) as articulated by the Brundtland report (World Commission on Environment and Development, 1987) recognizes that human development is subject to the status of environmental systems and limited by finite resources utilized to satisfy current and future needs.
Economic growth, expressed by an increase in real output has been empirically proven to negatively affect natural capital, through increased consumption of non-renewable resources, due to early-stage low technological progress (Dinda, 2004), higher levels of pollution, global warming through the production of greenhouse gases (Lapinskienė et al., 2015) and the potential loss of environmental habitats due to land-use changes and/or environmental pollution and degradation (Powers and Jetz, 2019; Tang et al., 2021). International scientific organizations such as the Intergovernmental Panel on Climate Change and the World Meteorological Organization agree that industrial, agricultural, and other human activities are the key drivers of climate change and environmental degradation (Pincheira and Zuniga, 2021), ultimately affecting human wellbeing and diminishing the capacity of the planet to sustain economic development. Moreover, the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services report (IPBES, 2019) stresses that increasing anthropogenic pressures on ecosystems in the last 50 years have resulted in significant reductions in ecosystem services. Indeed, following an upward trend, the global fossil CO2 emissions further increased by 0.8% in 2024 (Friedlingstein et al., 2025). Despite substantial investments in clean energy, fossil fuels have consistently supplied around 80% of global energy demand for decades, underscoring the persistence of structural dependence on carbon-intensive systems (Fletcher et al., 2024). To reverse these trends, the need for decisive action is dampened under the influence of multiple centres of power with own vested interests, while consumers’ lack of awareness and limited knowledge of the impact of their actions and consequences of their decisions at different scales, creates resistance in even recognizing the extent of environmental degradation (Morgan and Fullbrook, 2019) and slows down departing from the status quo (Hargroves et al., 2010).
Considering that humanity has not reached a state of development with regards to life, mortality, and health but also standard of living, productivity, and poverty as well as education and freedom, that is neither desired nor enjoyed by everyone on the planet, the prevailing argument has been to sustain economic development while reducing its impact on the environment. Satisfying this is believed that can be achieved through environmental regulations, technology developments and increases in resource efficiency (Holdren, 2008; Conrad and Cassar, 2014; Fletcher and Rammelt, 2017), an idea extensively used by ecomodernists (Albert, 2020). “Decoupling” is a concept that implies that economic activities and their environmental impact can be separated, or that their link can be broken (OECD, 2002), or that their current relationship can be reversed (when economic activities restore nature). Among others, this concept has been adopted by several national and international institutions as a critical priority for sustainable development (Yu et al., 2017). For example, in the EU the Green Deal aims at creating a competitive, resource-efficient economy, where “economic growth is decoupled from resource use” (European Commission, 2019). Additionally, the United Nations Environment Programme calls for “decoupling through maturation”, meaning that the natural transition from an extraction to a service-oriented economy can reduce the intensity of its negative impact on the environment by means of increasing efficiency (von Weizsäcker et al., 2014). However, increasing resource efficiency might be a valid policy objective to decrease pressures on the environment but not sufficient to avoid collapse, as pressures imposed by economic drivers (e.g., economic development and population growth) can outweigh its effects. Parrique et al. (2019) argue that rising energy expenditures, rebound effects and inadequate comprehension of the system hamper the possibility of increasing growth without negative effects.
Poor progress in the practical application of sustainable development shows insufficient understanding of its challenges, stemming from a long tradition of pursuing solutions to complex issues either through a social or ecological perspective (Adetunji et al., 2005). A systemic review of 94 case studies on sustainability policy implementation, found three recurring factors in policy failures: the inability to consider and internalize environmental costs, limited institutional capacity or political will to implement sustainability commitments, and weak communication of the urgency of sustainability challenges to key stakeholders (Howes et al., 2017). On the one hand, reducing manmade pressures on the environment, through reducing growth may lead to severe (real or perceived) social consequences, e.g., poverty increase or lowering people’s standards of living. Economic growth is considered the most powerful instrument for reducing poverty and improving the quality of life in developing countries (DFID, 2007), with both cross-country research and country case studies providing overwhelming evidence that rapid and sustained growth is critical to most United Nations Sustainable Development Goals (SDGs) but particularly the eight first (poverty, hunger, health, education, equality, water, energy and decent work), as economic development can lead to higher income per capita (Adams, 2013). Moreover, visions of sustainability as a “Simpler Way” society defined by low but sufficient material living standards (Trainer, 2010; Alexander, 2015; Values TTE, 2024), fail to inspire people to make the necessary changes for realising such visions, or even worse giving up altogether, if these are accepted as the only visions under which human civilization can operate viably within planetary boundaries (Trainer and Alexander, 2019; Rockström et al., 2024). On the other hand, historical rates cannot justify the goal of sustaining economic growth and reducing its impact on the environment by means of resource efficiency improvements and environmental protection policies alone (Hickel and Kallis, 2020; Haberl et al., 2020), other than leading to chilling visions of a future where society becomes increasingly relied on technology, artificial intelligence systems or humanity moving to other planets.
To move the discussion forward, we assume that there is another vision of sustainability, away from these two opposing visions of our future, that can be realised with fundamental changes in the use of natural capital (Haberl et al., 2017) and the way humans interact with nature. For this, we review the relationship between development and environmental degradation and revisit existing knowledge about them as derived from different disciplines (Soga and Gaston, 2021), looking at sustainability challenges from a systems perspective, and exploring the role of economics in the process. To support this analysis, we reviewed literature from sustainability science, systems thinking, environmental economics and the multiple approaches used to examine the growth–environment relationship. Sources were selected for their relevance to the core themes of the paper, conceptual paradigms, empirical methods, and policy tools, and were organised into these thematic categories to structure the discussion in a coherent and transparent way. We hope this exercise will reenergize discussions about sustainable development futures of increased prosperity that are desirable and can be delivered through sweeping environmental and economic radical changes and planetary-scale reforms.
2 Development and environmental impact
The systematic link between economic development and its effects on the environment has been receiving increasing attention in the last three decades (Dinda, 2004), aiming to elucidate how the different stages of economic development influence environmental quality. The Environmental Kuznets Curve (EKC) was the dominant approach between economists investigating the link between environmental quality and economic growth. Developed by Kuznets (1955) this approach hypothesizes an inverted-U long-run relationship between pollution and economic development, where environmental degradation increases with income initially, then decreases after a certain threshold (Figure 1). Though some pollutants, such as carbon dioxide increase as per capita income increases due to, for example, higher use of vehicles and intensifying production, the majority of pollutants (suspended particulate matter, sulphur oxides, nitrogen oxides, and water pollutants) rise to a point as income increases and then they decline (Hill and Magnani, 2002). The main thrust of the EKC is that at the early stages of development, the intensification of industrialization leads to rapid growth at the expense of the environment and income equality. As the growth of income per capita continues it reaches an inflection point (Nkwatoh, 2022), beyond which people start valuing higher improved states of the environment, and through the adoption of regulatory instruments, increasing environmental awareness and improved technology, degradation slowly diminishes (Dasgupta et al., 2002). Grossman and Krueger (1991) identify three different effects that dominate the economic growth-environment relationship at the aggregate level. First, as economies move from agriculture to industrial and manufacturing processes, higher investments in manmade capital result in environmental damage due to increases in the use of natural resources. Second, economic growth is accompanied by a composition effect (Taylor and Copeland, 2004) that relates to structural changes in the economy as it moves from being heavily relied on agriculture, to gradually consisting of industries that produce tangible goods and finally reaching a stage where a great share of industries produce services. Finally, the technique effect relates to the progressive replacement of obsolete inefficient technologies and processes by cleaner technologies that reduce the effects of production on the environment.
Figure 1. A typical representation of the EKC.
Scholars have conducted various studies that among others use forest logging rate (Panayotou, 1994), suspended particulate matter (Selden and Song, 1994) and industrial water use (Gu et al., 2017) as environmental variables to validate the EKC. In relation to water resources, the first study that validated EKC for water withdrawals was that of Rock (1998) followed by others (Cole, 2004; Duarte et al., 2013) that used cross-sectional data. In addition to that, the EKC has been found to represent the relationship between economic development and its effects on the environment for water withdrawal applications both in the industrial (Jia et al., (2006) and Jia, 2005; Hemati et al., 2011) and agricultural sectors (Goklany, 2002; Bhattarai, 2004). Other studies that assess how water quality is influenced by development are that of Paudel et al. (2005) and Thompson (2014) that did find evidence of the relationship between the two, while Farzin and Grogan (2012) did not. Since then, and particularly with the development of the “natural capital” concept, and several studies investigating how it is impacted by economic activities, the EKC relationship has been challenged.
The term Natural Capital was introduced by David Pearce in 1988, and can broadly be defined as the quantity of natural resources and the ecological services they provided that when combined with manmade and financial capital result in the provision of marketed products and intangible benefits that satisfy human needs (Bateman and Mace, 2020). One such study is that of Wang et al. (2021) who by investigating the level of economic development and natural capital in China, found that the pattern of demand for the latter across regions varies significantly, depending among others on the industrial structure, population size and energy efficiency. Additionally, recent studies indicate that the curve may follow an N-Shape as in the study of Chuku (2011) about the income-environment relationship in Nigeria and in that of Brockwell et al. (2021) assessing the EKC relationship between income and water quality in twenty European countries, or an S-shape (Friedl and Getzner, 2003; Gangadharan and Valenzuela, 2001), while several studies do not find evidence of the EKC hypothesis (Stern and Common, 2001; Perman and Stern, 2003; ChienChiang et al., 2010).
Furthermore, the influence of several other factors, such as the intensity of foreign trade (Saidi and Ben, 2017), urbanization (Ozatac et al., 2017), environmental patents (Cheng et al., 2019), institutional quality (Allard et al., 2018), finance (Nassani et al., 2017) and social variables such as social capital (Hao et al., 2020; Rahman and Alam, 2021; Paudel and Schafer, 2009) among others have been shown to determine environmental degradation. However, the effects of such variables are inconclusive, influenced by the heterogeneity across countries in terms of their level of development and income. For instance, Allard et al. (2018) conclude that trade increases CO2 for lower-middle-income but not for high-income countries, while other studies conclude that trade openness reduced environmental pollution in countries such as China and India (Aydin and Turan, 2020). Other studies have been including the ecological footprint instead of pollutants as the explained variable, shown in some cases to be positively affected by economic growth (Destek and Sinha, 2020; Alola et al., 2019) (U-shaped curve), while in others the EKC hypothesis was verified (Ahmad et al., 2021). Furthermore, a body of research shows socio-political parameters playing a key role in determining the shape of EKC. For instance, Farzin and Bond (2006) found a significant relationship between income inequality, age distribution, education, and CO2 emissions; Dutt (2009) included an index of socioeconomic conditions related to the levels of unemployment, consumer confidence and poverty, an index of education. In this study the high correlation of such variables with income did not show significant effects, however, their improvement could speed up improvement in environmental quality. Additionally, the human development indicator was included in the analyses of Farhani et al. (2014) and showed to positively influence CO2 emissions.
The EKC has also been criticised for using aggregate data and disregarding microeconomic information stemming from non-market valuation (McConnell, 1997). Besides structural effects, behavioural factors that influence individuals’ choices on environmental services influence the economic development-environment relationship (Panayotou, 2000). Models developed to study the micro foundations of the EKC show that low income and consumption in combination with increased environmental endowments lead to increasing environmental damage (Murty, 2003; Pfaff et al., 2004) at least for low incomes. Ma and Shi (2014) using a static model explain that at low-income levels, individuals perceive pollution caused by economic growth as acceptable as they are more concerned with wellbeing stemming from the consumption of produced goods. Additionally, given limited financial capital at such stages, investments for improving environmental quality are not favoured. Furthermore, at the micro level, the relationship between environmental degradation and economic growth has been studied, though not extensively, under the prism of the Environmental Engel Curve framework (Baudino, 2020) that incorporates socioeconomic characteristics, commonly hypothesised to affect household behaviour (Borghans et al., 2021; Sager, 2019). Critiques raised against the EKC extend to this framework and include among others the issue of neglected reverse causality, i.e., bi-directional causality between income/growth and pollution (Baudino, 2020). From a theoretical perspective, the greatest share of research disregards feedbacks from environmental degradation to economic output, by specifying the income variable as exogenous (Stern, 2003). Contrary to that, Barassi and Spagnolo (2012) examining the causal relationship of per capita CO2 emissions and output growth for six countries (Canada, France, Italy, Japan, the United Kingdom, and the United States), found feedback between the two, revealing that economic growth may not only be the cause of pollution, but also the result of it.
A closer examination of the empirical literature on the EKC and its extensions reveals substantial methodological diversity, which contributes to the inconsistent and often contradictory results reported in this field. Studies differ widely in their choice of environmental indicators, functional forms, country samples, and time periods, as well as in the econometric techniques employed—from simple panel regressions to cointegration and causality tests. These variations limit comparability and undermine the ability to draw general conclusions. While one might be tempted to question the validity of all these studies offering contradictory findings, the main problem seems to be with how the EKC has been applied among economists to model the connection between development and its environmental impacts, as a relationship that is fixed, predetermined and unconditional. The EKC simply models an essentially empirical phenomenon (Stern, 2004) and is only correct when it happens that the actions and policies on the ground, support and deliver what it claims to predict. Concentrations of some local pollutants have clearly declined in developed countries when the right policies were introduced (Stern, 2017), but emissions of many pollutants have increased in the absence of such policies (Hoang et al., 2019). Studies of the relationship between per capita emissions and income find that per capita emissions of pollutants rise with increasing per capita income when other factors are held constant if these are not targeted. Moreover, even changes in these other factors may be sufficient to reduce pollution if these complex interactions are understood and managed appropriately. For example, in rapidly growing middle-income countries, the effect of growth overwhelms the effects of other factors (e.g., production efficiency, state of technology, input mix), while in wealthy countries, growth is slower, and pollution reduction efforts can overcome its effects (Stern, 2018) through reshaping the interactions among human capital, technology, production and consumption among others (Song et al., 2021). More importantly, EKC and related empirical approaches tend to reduce complex socio-ecological dynamics to highly simplified relationships, assuming stable functional forms and linear behaviours that rarely characterise real-world systems. Such models typically neglect critical features of socio-ecological interactions, including feedback loops, time delays, non-linear responses, threshold effects, and institutional or spatial heterogeneity.
These methodological constraints highlight the reductionist nature of EKC-based analyses and reinforce the need for analytical frameworks that explicitly incorporate system interactions, non-linearities, cross-scale processes, and the co-evolutionary structure of socio-ecological systems. Such evidence reinforces the claims that environmental problems should not be expected to be eliminated through simply achieving higher economic growth, but through targeted interventions and policies (Arrow et al., 1996) able to take into account the complex relationships of a socio-ecological system.
3 Human nature interactions and sustainable development
Human-nature interactions, and particularly our relationship with nature have evolved over time. From the ancient Greek notions of cosmology that viewed the natural world as one unified organism (Furley, 1987), with humans being a factor contributing to the organism’s overall functioning, to the Renaissance, when modern scientific thinking began to take shape, seeing the natural world as a machine (Oakley, 1961), but humans placed “outside of nature”. Contemplating nature from the outside (Parisi, 2000), scientists believed that objective observation and controlled experiments could decode the workings of nature. Environmental management followed a similar trajectory, with passive strategies implemented in the beginning of the industrial revolution viewing the environment as being able to absorb wastes generated from production and consumption activities, with end-of-pipe technologies treating pollution at the end of production processes (Mengist, 2020). Despite evidence of low performance, such approaches are still being implemented today, not as a result of concrete analysis and data, but rather based on “how we are used of doing things” (Boeuf et al., 2018). Similarly, when economic analysis is employed, it often mainly revolves around financial costs, disregarding environmental and resource costs and benefits (Souliotis and Voulvoulis, 2021a). Reductionist approaches, under the assumption of certainty and predictability, are shown to fail addressing complex problems (Gorzeń-Mitka and Okręglicka, 2014). Sectoral planning that does not consider the wide range of effects of policy interventions, for example, often fails or results in short term improvements that do not improve wellbeing (Souliotis and Voulvoulis, 2021b). Indeed, most traditional approaches to economic and environmental management have been based on static, compartmentalized models that through mechanistic approaches often fail to understand the complex relationship between human societies and the natural world. Moreover, the study of social, economic, and ecological domains was traditionally performed within disciplinary boundaries, the same way scientific knowledge in ecological and social sciences has been developing independently (Ostrom, 1979). This minimal interaction between natural and social sciences (Rosa and Dietz, 1998) has led to neglecting the importance of ecosystems as unities with different socioeconomic, environmental, biological, chemical, and other characteristics (Liu et al., 2007) and to tackling concurring interlinked challenges in silos (Haberl et al., 2019). A systemic understanding of nature-human interactions, to the contrary, offers a more integrative view of the one and same system, where humanity and nature constantly interact by exchanging energy, information, and materials (Rees, 2019). Consequently, defining goals requires understanding of how processes that take place in one part of the system affect the status of the whole system. Examining how changes occur in the system, for example, shifts from low pollution-low socioeconomic costs to high pollution-high socioeconomic costs stages, calls for integration of disciplines and the development of interpretative frameworks that focus on the interactions of components rather than the components as outcomes. Ecosystems and industrial systems are tightly coupled and dynamic systems, which often operate far from equilibrium and exhibit nonlinear and sometimes chaotic behaviour. Systems thinking recognizes that our economies are subsets of their environments, and instead of viewing the world as a collection of unconnected objects, allows us to see reality as a nested holarchy of interacting systems (Taylor, 2009). The linkages between natural and economic systems exhibit complex threshold effects (Folke et al., 2002), dangers of irreversible damages, and interactions between global changes and place-based, location-specific effects.
Complexity and nonlinear dynamics are areas of important recent innovations in the natural sciences, that pose a challenge to standard economic models (not yet been fully absorbed) (Spangenberg and Polotzek, 2019; Farrell, 2019). Systems-based views, values, social structures, technologies, and economic processes are rapidly emerging. They describe a different worldview, where humans and ecological systems interact, impacting one another and co-evolve over time (Quintas-Soriano et al., 2018). This systemic interpretation of the relationship between humans and nature is now becoming the cornerstone of integrated environmental management policies (Kelly et al., 2013). For instance, the leading policy instrument to manage water resources in the EU, the Water Framework Directive, by defining each river catchment as the system of interest (Voulvoulis et al., 2017) calls for understanding the interactions of society with water resources, the trade-offs between economic benefits and water status classifications and designing interventions that take into account socio-environmental sustainability considerations. Its implementation also highlights how difficult and challenging managing our interactions with nature as one system can be on the ground, revealing the absence of the paradigm shift towards the systems (integrated) thinking that the WFD was grounded on, as a barrier to its effectiveness (Voulvoulis et al., 2017).
Another prominent issue that dominates the relationship between humans and nature relates to structural aspects and the mechanics of the socioecological system. Conceptualising nature as natural capital (Pearce et al., 1989) and the benefits humans obtain from interacting with the environment as ecosystem services has not only promoted the development of systemic socio-ecological approaches especially in the field of environmental and ecological economics (Sullivan, 2014), but has become synonymous with environmental care (Carver and Sullivan, 2014) by shedding light on the nexus between the satisfaction of human needs and protection of nature (Prugh, 1999; Daly, 2019). In line with this, the notion of critical natural capital signifies the limits to utilizing nature for sustaining production and consumption. According to it, natural capital performs environmental functions that cannot be replaced by other types of capital (Dietz and Neumayer, 2007; DesRoches, 2019), and preserving natural capital is vital for maintaining the provision of ecosystem services (De Groot et al., 2003; O’Neill et al., 2018). This concept denotes the lower level of stock of natural capital, below which ecosystems malfunction and some ecosystem services seize to exist, with negative socio-cultural, ecological, sustainability, ethical, and economic consequences. For instance, Ekins (2003) presents the long-term heavily polluted state of the Trent river in the UK and modifications in its flows, as the reasons water from the river was made unsuitable for human consumption and significantly reduced the wildlife and biodiversity it supported previously.
The popularization of the concept of ecosystem services, commonly attributed to the publication of the Millenium Ecosystem Assessment (2005) and its adoption by various disciplines has been generating integrated tools and approaches that enable policymakers to account for the reciprocal relationship between humans and nature in relevant decision-making processes. Ecosystem services have been used extensively in land management (for example, climate change research (Mooney et al., 2009; Munang et al., 2013)). Additionally, economics has incorporated ecosystem services into valuation techniques (Koundouri et al., 2017; Koundouri et al., 2016; Ghermandi et al., 2010; Costanza et al., 2014), which have improved relevant analyses by considering a broader spectrum of positive and negative interactions within the socioecological system. Still, Economics is often criticized for adopting a narrow definition of the economy as a system (Goodwin, 2019), leading to considering social, economic, and environmental impacts stemming from human activities as external effects (externalities), often disregarded in economic analysis, even when having a measurable footprint (Unerman et al., 2018; Beaton and Maser, 2011). Monitoring natural capital through the development of use, extent and ecosystem services flow accounts aims to provide information on the status of the environment, the dependence of the economy and society on natural resources, promote their sustainable use and reveal the broad effects of policy interventions (Souliotis and Voulvoulis, 2021b). Natural capital accounting, a methodology promoted by the United Nations (United Nations- Statistics Division, 2013) has been mobilized to reveal how economic activities and policy interventions influence nature and consequently the wealth of a nation. The metaphor of nature as natural capital and consequently its valuation may indeed shape development goals following the logic that extensive exploitation of natural capital resources beyond their critical levels, reduces welfare in the long-term (Ulgiati et al., 2011) both by losing intangible benefits (e.g., recreational and health benefits) and inputs for sustaining production, leading to ‘uneconomic’ development. In other words, a systemic view of the human-nature relationship considers (external) effects inherent to the system (Vatn and Bromley, 1997), relating them to its structure which accommodates a specific configuration of interconnections, ultimately reframing the notion of sustainability and shaping its normative goals. The fundamental premise of policymaking is to intervene in the system (Meadows, 2009) in such a way that the flow of information and materials ensure “sustaining life-enhancing conditions” (Reed, 2007) rather than achieving specific targets in different domains (Robinson and Cole, 2015; Du Plessis and Brandon, 2015), that often do not work or produce unexpected outcomes.
Human-nature interactions may produce positive economic outcomes when natural resources are used at a smaller rate than their rate of self-replenishment (Bateman and Mace, 2020; Bierkens and Wada, 2019); negative in the opposite case; or positive socioecological effects when human activities result in further enhancing the ability of ecosystems to produce services (Blignaut, 2019). The latter demonstrates the potential of natural capital regeneration as a vessel for economic growth through decisions that influence the properties of the system towards thrivability (Hes and du Plessis, 2014; Gibbons, 2019; Du, 2012) i.e., continued socio-economic and ecological development that does not just sustain the system, but moves it towards states of increased resilience. This is promising particularly considering that most research concerned with the relationship between economic development and environmental degradation often disregards the regenerative ability of nature1 (Bertinelli et al., 2008), which constitutes a significant aspect of the resilience of ecosystems as complex adaptive systems (Adger et al., 1979). Policy decisions directly or indirectly can influence ecosystems and their processes positively or negatively, ultimately affecting their regeneration ability (Seddon et al., 2016). Loss of resilience in socio-ecological systems, and their operation near tipping points, where rapid shifts occur, has been observed to be followed by slow recovery from shock, as the effects of positive feedback loops are of higher magnitude than the stabilizing effect of negative ones (Bueno, 2012). Therefore, improving the regenerative ability in such systems, safeguards that the overall system will operate away from critical conditions that may lead to its destruction. Sustainable development that takes into account the regenerative aspects of socio-ecological systems, aims to create conditions for development through restoring the health of the system (Clegg, 2012). According to Du (2012), sustainability in this respect considers that nature and humans are one autopoietic system, which requires focusing on understanding how nature works and base development on that rather than on developing processes to control ecological functions. Consequently, policy decisions in the form of technical, economic, and legal interventions must support the health of the entire system (Gibbons, 2020), ultimately resulting in the protection and regeneration of natural capital to support human welfare.
4 Policies for sustainability transformation
Reversing the trend of environmental degradation and reaching sustainability requires intentional transformation of technology, social practices, societal norms, policy instruments and business models (Voulvoulis et al., 2022). Internationally, the SDGs and in Europe the Green Deal and 2030 EU Biodiversity Strategy aim at addressing interlinked environmental, societal, and economic challenges. Sustainability transformations consist of “fundamental changes in structural, functional, relational, and cognitive aspects of socio-technical-ecological systems that lead to new patterns of interactions and outcomes” (Patterson et al., 2017), following a vision of a sustainable society and actions to realise it (Holmberg and Larsson, 2018). Achieving that requires the adoption of structural, systemic, enabling approaches or a combination of the above (Scoones et al., 2020). For instance, degrowth theory prescribes structural changes that relate to changes in the production and consumption practices, whereas decoupling in a growing economy paradigm is associated with systemic approaches of transitioning to different system states through ‘niche’ innovations and transforming the rules that govern the interactions of different components (Späth and Rohracher, 2012; Smith and Raven, 2012; Geels, 2005; Köhler et al., 2019). From a systems perspective, these approaches could ultimately converge to a similar sustainable future. Additionally, enabling approaches focus more on factors that create the capacity of individuals to take action and collectively shift the system towards states that correspond to their values (Scoones et al., 2020).
Tackling environmental pressures through a systems thinking perspective requires managing authorities to take into account the environment at large (Jager et al., 2016), evaluating how each sector of the economy interacts with the environment, and assessing the various economic, aesthetic, cultural, emotional, and environmental dimensions of natural ecosystems (Hellegers and Davidson, 2021). Therefore, while it could be claimed that such a tool could lead to “putting a price on nature” (Sukhdev, 2012), deepening our understanding of the functioning and outputs of nature as well as assessing how actions affect the environment and in turn, human welfare, provides opportunities for identifying sources of welfare and growth. In fact, it is claimed that natural capital and its services, directly and indirectly, generate $44 trillion of economic value each year (White et al., 2020). Reporting on stocks of natural capital and not just flows of its services reinforces socio-ecological transformation by influencing spending options (Bateman and Mace, 2020) towards desired outcomes for humans and nature, that may reveal opportunities for transitioning from a high to a low environmental impact economy. One example of a successful systemic transformation is Costa Rica’s commitment to environmental protection by implementing the first Payment for Ecosystem Services Programme at a national scale (Geng et al., 2024; Le et al., 2024). The programme provides financial incentives to landowners to encourage forest recovery. The majority of payments are directed toward forest conservation, whereby participants commit to allowing existing forests to regenerate naturally (Delgado et al., 2024). With over 25% of its land protected (Li et al., 2025), the country is deeply committed to securing and enhancing biodiversity, recognising that its forests deliver multiple ecosystem services, including water regulation, carbon storage, biodiversity conservation, and scenic beauty (Delgado et al., 2024). Another example of systemic interventions is the Grain for Green Program implemented by the Chinese government, one of the largest ecological restoration initiatives worldwide. Through the afforestation of farmland, establishment of fruit tree plantations, afforestation of degraded land and conservation of natural forest, the program established a significant area of forest in 25 Chinese provinces, contributing to the reversal of ecosystem degradation (Xian et al., 2020). Although the primary objective was to mitigate soil erosion and flood risks, the resulting increase in vegetation delivers generates a wide array of additional ecosystem services (Yuan et al., 2019). In fact, Jia et al. (2025) identified significant co-benefits including water conservation, carbon sequestration, air purification, nutrient fixation and biodiversity conservation, with economic value of these ecosystem services for five provinces estimated 3604.99 × 108 yuan (around £39 million) per year.
Nevertheless, sustainability transitions will not occur simply by following a methodological approach to assess human-nature relationships, but through large-scale social, political, and behavioural changes that can ensure the reshaping of human-nature interactions and consequently minimize negative impacts. For instance, Klingert (1998) suggests that environmental improvements require radical dematerialisation. Others (Maxwell et al., 2006; Baines et al., 2007) claim that “servitization”, i.e., the integration by manufacturers of service elements into physical products (Szász and Seer, 2018), can contribute to the reduction of environmental impact. Consequently, shifting to a more sustainable paradigm requires a new vision of prosperity, which will require radical policy changes both at a micro and a macro scale.
Closing the gap between the current and a desired state where pressures are minimized, calls for reversing the downward trends of environmental quality through decoupling opportunities and increasing the regeneration capacity of ecological systems (Figure 2). Disentangling economic growth from resource use and negative environmental impact, a key component for increasing resilience, given lock-ins and rebound effects (Haberl et al., 2017; York, 2006) can only happen through systemic sustainability transformation on the premise that fundamental changes in production and consumption (regarding, for example, the type of inputs, technology, and followed processes) lead to rebalancing of socio-ecological systems (similar to the structural changes proposed for degrowth). Regeneration, on the other hand, proposes investing in policy measures that increase biodiversity and natural capital and through that increase socioeconomic benefits from ecosystem services, an option that has not been explored exhaustively yet. Indeed, the OECD estimates global biodiversity finance at USD78–91 billion per year from 2016 to 18 (OECD, 2020), whereas Seidl et al. (2020) estimate that the annual public biodiversity expenditure was 0.19%–0.25% of global GDP over the past decade, noting that a higher volume of investment is needed for reducing pressures on biodiversity and promoting its conservation and sustainable use.
Figure 2. Schematic representation of the proposed objectives. Adjusted from Natural Capital Committ ee (2015).
Research suggests that (assisted) natural regeneration of degraded ecosystems is able to sequester significant amounts of CO2 (Brown et al., 2011), protect against flooding (Kelly et al., 2016) and increase resilience against the effects of climate change among others (Chausson et al., 2020). Furthermore, natural capital can increase through deliberate investments in replenishing habitats for species and restoration of ecosystems (Segura and Boyce, 1994; Hinterberger et al., 1997). Regeneration investments result in significant benefits. For instance, an investment of 1 million USD in aviation can result in the creation of 19 jobs, while the same amount can generate almost 40 jobs if invested in reforestation, land and watershed restoration and sustainable forest management (Edwards et al., 2013), that also deliver other health and welfare benefits through ecosystem services generation rarely accounted for, explaining conventional investment in grey infrastructure. In relation to this, decoupling studies have often been criticized for using GDP as the measure of the outcome of the economy, with scholars advocating for the use of welfare indicators instead (Beça et al., 2014; Bleys and Whitby, 2015; Menegaki and Tugcu, 2016). For instance, Kalimeris et al. (2020) note that using GDP as the index of economic welfare provides an optimistic vision of the dependence of economic development on the environment, given that empirical estimates show a higher degree of decoupling. Several other studies have highlighted the problems with using GDP as a measure of welfare (Hoekstra, 2019; Cos et al., 2014; Kubiszewski et al., 2013; Stiglitz et al., 2009). The recognition that we need to move beyond GDP, since the 1970s, has resulted in many alternative indicators that emphasise a more systemic, sustainable and inclusive conception of wellbeing (Jansen et al., 2024). Although no universally agreed indicator exists, such integrated metrics encompass to various extents, environmental, social, and economic dimensions (Berkes et al., 2008), that can enable policymakers to monitor progress, detect emerging risks, and evaluate transition outcomes using consistent indicators. Recent evidence further reinforces the need for integrated metrics, showing that the top 10%–20% of consumers account for 31%–67% of planetary-boundary transgressions (Tian et al., 2024a). However, in order to replace GDP as the dominant measure of performance, given the degree to which it constitutes a key metric across countries, we need broad agreement and commitment to a new shared vision of sustainable development (Kubiszewski et al., 2025).
Such a shift also requires adapting the policy and investment frameworks that structure economic decision-making. Mainstreaming investments in natural capital face barriers related to institutional failures in the sense that users reap benefits whereas policymakers face their costs (Turner and Daily, 2008); undervaluation of benefits that reinforces free riding; and lack of information regarding the distribution of benefits and costs among users (Vogl et al., 2017) (for instance rising energy costs across 31 developed countries disproportionately strain elderly and low-income households (Tian et al., 2024b)). New approaches such as nature-based solutions (NbS) (Singhvi et al., 2022), have the potential to overcome such issues, designed to provide additional benefits besides those directly related to minimizing identified environmental pressures. NbS loosely defined as interventions that operationalize the functioning of nature to reduce pressures on the environment, while generating a wide range of socioeconomic benefits have been shown to be cost-effective (Souliotis and Voulvoulis, 2022) and have the potential to attract private investments (Sutton-Grier et al., 2018; K et al., 2021; Loiseau et al., 2016). NbS inherently integrate hydrological, ecological, climatic, and socio-economic processes, aligning with systems thinking principles of interdependence, nonlinearity, and co-evolution (Santos, 2025). Therefore, they can involve protecting, restoring, and managing existing ecosystems or creating new ones to maintain biodiversity and its functioning and/or enhancement to alleviate negative impacts on the environment (Cohen-Shacham et al., 2016; Rodriguez-Gonzalez et al., 2020) while addressing social and economic challenges (Faivre et al., 2017). The emergence and widespread recognition of the significance of NbS have been heavily influenced by the concept of ecosystem services (Hanson et al., 2020) and the theory of systems thinking (Keesstra et al., 2018). Positive and negative feedback loops inherent in natural systems, and their ability to adapt to their environment (Cropp and Gabric, 2002) are key elements in properly designing such activities, as their effectiveness relates to their potential to cascade through interconnected subsystems addressing the root cause of complex problems (Lehmann et al., 2025). NbS are considered to provide multiple benefits, such as offsetting greenhouse gas emissions, removing water and air pollutants, as well as recreational and health benefits (Raymond et al., 2017; Joscha et al., 2015; Kabisch et al., 2017; Liquete et al., 2016). Additionally, NbS are strongly associated with benefitting biodiversity, either through increases in the diversity and/or populations of species, and the improvement of habitat quality and/or community composition (Chausson et al., 2020), thus promote the regenerative capacity and resilience of socio-ecological system (Yadav and Yadav, 2024), rather than treating undesired outcomes (Woroniecki et al., 2023).
Several studies have discussed barriers of NbS implementation, including the lack of awareness, functional and effectiveness uncertainty, lack of financial resources and political will, land use conflicts, as well as the time needed to reach their full potential (Castellar et al., 2024; Sarabi et al., 2020; Seddon et al., 2020; Picon et al., 2025). Being knowledge intensive approaches, to overcome such barriers, NbS require integrated expertise of various disciplines while fostering co-production with stakeholders (Santos, 2025; Calliari et al., 2019; Dorst et al., 2022). This enables systemic design and implementation that reflects the complexity of given problems and the tools to tackle them, making it possible to account for feedback mechanisms, system dynamics, and potential unintended outcomes (Alvarado et al., 2023; Carmen et al., 2024), enhancing the overall effectiveness and robustness of NbS.
Shifting from reductionist to systems worldviews and thinking, not only shapes policy objectives, but also the means to achieve them. Instead of asking “What is the optimal level of growth that does not lead to environmental degradation?”, managing complex environmental interactions through systems thinking would pose the question “What interventions could we undertake to influence the interactions among the society, economy and nature in such a way to reach a desired state?”. In other words, under such a worldview, the emphasis is given to interactions between components, that give rise to properties. In the context of decision-making, integrated economic assessments that capture a wider range of social, health, environmental and economic costs and benefits can translate these interactions into a common currency, improving understanding of how different components of the system are interrelated. Transitions from the current to a desired state involve extensive changes that relate to a broad range of actors (Markard et al., 2012), which inevitably reform the economy as a system2. However, several obstacles hinder the practical implementation of systems thinking approaches. As Voulvoulis et al. (2022) note, systems thinking competences are not widespread, as educational systems do not focus on developing such competencies. Institutions also reinforce fragmentation, as policies are often developed sector-by-sector. Implementing systems thinking requires interdisciplinary collaboration and working in the margins rather than the centre of disciplines, which also requires new skills and may conflict existing professional norms. Furthermore, systems thinking relies on public engagement, but building shared understanding among stakeholders may demand significant effort. Nguyen et al. (2023) reviewed the literature and identified further challenges including difficulties in conceptualisation, language, and communication; time and resource constraints for carrying out meaningful stakeholder engagement; and limited approaches for evaluating the outcomes and effectiveness of systems-thinking interventions (Telukdarie et al., 2024).
Government agencies play a significant role in guiding visions of transitions (Späth and Rohracher, 2012) through policies, regulations, and funding of environmental programmes. Practical approaches, such as economic valuation and cost-benefit analysis inform such decisions. However, as it is often argued, neglecting the full spectrum of ecosystem services benefits leads to low awareness of the importance of nature and consequently to mismanagement (Neill et al., 2020). Systemic accounting tools that track information on the stock of natural capital, the ecosystem services it provides and their value to humans are essential for providing direction to systemic changes and assist in detecting signs of increased pressure in the system (Barnosky et al., 2012; Galli et al., 2012). Economic valuation thus serves the role of communicating the magnitude of interactions between components of the system in a common unit of value (Kemp-Benedic and Kartha, 2019). Additionally, unravelling how preferences transform within a system (Fischhoff, 1991), reveals patterns of behaviour and structures enabling us to move away from those that do not serve us well. Consequently, in this type of world, by accepting that interventions are not only associated with costs, but the reduction of pressures creates beneficial interactions with different components of the system, promotes diverting public investments towards generation of benefits3, which might further favour the role of NbS for increasing regeneration in the system.
By putting humans back in nature and treating the human-nature interface as the one system where the fates of humanity and nature are intertwined, enables the emergence of a truly sustainable world. Systems thinking allows us to look far into the future, think beyond ourselves about the greater collective (born and unborn, human, and non-human), and look deeper below the surface to understand how things really work, and not just for avoiding ecosystem collapse but ultimately creating conditions of prosperity for all. We are not by necessity destined to Malthusian catastrophe of growth and collapse. However, change is required in many areas, including to address issues like overconsumption, inequality, power asymmetries, vested interests and short-termism. Acknowledging and questioning the mindsets and paradigms that underpin our societies, economies and institutions is necessary. In the context of biodiversity, the global crisis is tightly linked to the way nature is valued in policymaking, which, unfortunately, has predominantly ‘prioritised a narrow set of values at the expense of both nature and society’ despite the diversity of nature’s values (IPBES, 2019).
The European Green Deal, along with the EU’s commitment to the UN’s 2030 Agenda and its Sustainable Development Goals, demonstrates an appreciation of the systemic nature of sustainability challenges, and generates unprecedent ambition and policy effort. However, the European Green Deal’s full potential has yet to be realised. Cultural, political and economic systems are co-produced and essentially engrained in societal mental models and paradigms. This is why change has to ‘scale deep’, and why deep innovation and deep societal involvement are called for in sustainability transitions and transformations4. While paradigm shifts are one of the strongest levers for system change, they are also the most resisted and difficult to achieve (Meadows, 2009). To the extent that systemic challenges and systemic change are governable, they call for all powers of governance to play a role—including government, markets and civil society, and their mutual interactions. Achieving the SDGs and progressing towards just and sustainable futures requires a shift in decision making to better recognise the values of nature, both at the level of institutions and individuals (IPBES, 2019).
At the level of civil society, there are many societies and cultures where the commodification of nature did not take place to the same extent and where other life forms and elements of the biosphere have a different and higher status. Importantly, some citizens of modern, industrialised societies relate to nature in terms of belonging, kinship, stewardship and respect and can be a source of inspiration. In modern capitalist societies, at the interface between civil society and the market, there is the particular construct of citizens as consumers, absolving a fundamental function in the treadmill of production underpinning economic growth (Gould et al., 2015; Dewandre and Gulyas, 2018). Consumption levels, patterns and lifestyles underpinned by affluent societies and individuals are also acknowledged to be among the main drivers of environmental pressures. There is little point in trying to enforce policies grounded in systemic transformations if materialism and massive consumption still dominate hegemonic discourses and cultural norms. In terms of governance, the challenges call for accepting a wider range of justifications for protecting nature, beyond anthropocentric utilitarian arguments. There are even proposals of a charter for the fundamental legal rights of nature. Governance systems and policy instruments have a fundamental role to play. It seems unlikely, though, that shifts in governance can be achieved by top-down approaches and independently from a cultural shift in policymaking. Policies may have to move into the unchartered space of discussing behaviours, lifestyles and systems of values. Governance itself has to become not only wise (Oliver et al., 2021) but truly participatory, symbiotic and tentacular. Our societies would need to be governed in a way that aligns with the needs and concerns of those who are currently ‘left behind’, humans and non-humans, and respects the Earth’s carrying capacity. To realise the full ambitions of the European Green Deal and the vision of the eighth EAP, a change from considering ‘us and them’ to ‘all of us’ is essential. This change would create new motivations to protect biodiversity based on an expanded sense of responsibility.
5 Discussion
Several theories exist that mould the strategies societies must follow to achieve sustainable development. Green growth, degrowth and a-growth are mostly discussed in Europe (Lehmann et al., 2022), whereas the steady-state economy proposed by Daly (1973) is a concept used more widely in North America (Martínez-Alier et al., 2010). Degrowth, at one end of the spectrum, treats natural capital and ecosystem services as un-substitutable by other forms of capital, with their intrinsic superior to their instrumental value (Gabriel and Bond, 2019). Proponents of degrowth claim that sufficiently reducing impacts to levels that can ensure ecological resilience and increased wellbeing cannot be accompanied by increasing economic growth (Kallis et al., 2018). Consequently, this means that enhancing ecological conditions requires downscaling of consumption and production (Schneider et al., 2010; Krpan and Basso, 2021), and as a result, a reduction of GDP. The theory of a-growth rests in the middle of the spectrum, largely influenced by the works of van den Bergh (Lehmann et al., 2022), primarily aiming at developing effective policies for the protection of the environment that are socially acceptable, without necessarily attempting to achieve specific economic development objectives (Bergh, 2010; Bergh, 2017). At the other end of the spectrum, proponents of economic growth advocate that growth remains essential for supporting continued improvements in factors that affect people’s wellbeing, from health and employment to education and quality of life, and for helping governments deliver on a range of policy objectives, amongst them environmental ones (Everett et al., 2010), as well as investing in the development of more efficient technologies that are able to minimize the impact of production and consumption on the environment (Ekins, 2002).
Somewhere in between there is also a rather misunderstood concept referred to as “green growth” or more specifically the concept referred to as decoupling-decoupling of economic growth (Nyangchak, 2023) and ultimately of our prosperity from resources, pollution, waste, and carbon emissions (Vadén et al., 2020; Naz et al., 2024) through technological innovation, market restructuring, new business models and not just efficiency improvements. More of a victim of the rivalry between the two above extremes, opponents from the one side, claim that green growth cannot be achieved without jeopardizing economic growth (Fernandes et al., 2021); while the others argue that it is not possible to respect sustainability if intensive consumption of goods continues to foster economic growth. Still, decoupling is a foundational component of the UN 2030 agenda of Sustainable Development Goals, and specifically a target of SDG 8 on sustainable economic growth. Target 8, 4 refers to the need to “improve global resource efficiency in consumption and production and decouple economic growth from environmental degradation. Indeed, dematerialisation, servitisation, collaborative consumption and a shift from ownership to access have the potential to restructure the economics of consumption, accelerate decoupling, and help us to envision and potentially create a sustainable economy that delivers social, economic and environmental benefits by improving planetary health and human prosperity (Voulvoulis, 2022).
While absolute decoupling has not occurred so far (Vadén et al., 2020), and most empirical analyses have been conditional on specific and complex institutional arrangements (Naz et al., 2024), decoupling policies and targets have not been operationalised and rarely feature in sustainability efforts. Interestingly, Infante-Amate et al. (2025), emphasize that most of CO2 reductions in history have occurred due to recessions, wars or other crises, rather than deliberate green policies. Despite such empirical evidence, climate-economy prediction models commonly estimate how to reach predetermined climate and emission constraints at minimum cost (Gambhir et al., 2019), which contributes to sustaining the belief that climate change can be avoided by applying certain efficiency improvement policies and developing certain technologies for CO2 capture. Pindyck (2017) highlights several shortcomings of Integrated Assessment Models, including the fact that the damage functions used to describe the relationship between temperature increases and GDP losses are largely assumed or invented by model developers, as the true relationship is unknown. Besides that, most models assume linear relationships, ignore increasing returns, path dependence, lock-in related to technological change (Ahmed et al., 2025; Raihan et al., 2023; Stern et al., 2022). These simplifications tend to overestimate the feasibility of low-cost transitions and introduce systematic biases into policy recommendations.
Proponents of degrowth, such as Hickel and Kallis (2020) claim that despite economies shifting from manufacturing to services and the development of possible technological innovations which will decrease the dependence of the economy on natural capital, absolute decoupling is not likely to occur. Furthermore, they advocate for limiting economic growth within sustainable ecological limits through structural changes in production and consumption while increasing human welfare (Latouche, 2009). The conditions though under which a state of degrowth can be achieved have not been adequately investigated and such a vision has not been proven practically possible (Sandberg et al., 2019), as degrowth research has largely focused on theoretical explanations of complex interrelations, with limited evidence of practical implementation (Polewsky et al., 2024). On the other hand, a counter argument on reducing growth could be that of van Krevel (2021) who claims that policies that may result in the depletion of natural capital for the purposes of economic growth promote sustainable development through the generation of manmade capital assets that increase the per capita Inclusive Wealth5. Decoupling finds itself between two extreme schools of thought and a current debate on sustainability challenges focusing on the optimal level of growth following a long empirical tradition of associating the development of socioeconomic variables to environmental impacts.
A central point of agreement between degrowth and economic growth as two seemingly opposed paradigms is that the current economic model is unsustainable and that some form of fundamental system transformation is necessary to address the environmental crisis. It becomes evident that the core disagreement among theories lies not in the need for change, but in whether the transformation can occur within the existing capitalist framework or requires transcending it entirely. A systems perspective, however, shifts the attention away from this dichotomy by highlighting that economic growth is not simply the result of intensified use of natural resources, but rather the result of a series of interactions that take place simultaneously (social, cultural, institutional, etc.). Therefore, pursuing some sort of transformation either through technological progress to promote the efficient use of natural resources (efficiency), or through reducing economic output (sufficiency) to maintain environmental integrity are ill-thought visions that provide neither holistic objectives nor the means to achieve them (Jakob and Edenhofer, 2014) and disregard a large number of parameters that influence both growth and environmental integrity. Sustainability challenges are complex given the high number of agents, interactions, and feedbacks that socioecological systems encompass. Instead of reducing complex sustainability issues to manageable problems revolving around the level of growth, falsely leading to the belief that socioecological systems can be controlled, policymakers, academics, and society as a whole need to focus on how to harness or influence (Mueller, 2020) such systems towards a vision of prosperity that goes beyond growth, as well as beyond efficiency and recycling, delivering prosperity sustainably.
Individuals obtain benefits not only by directly consuming manufactured goods, expressed in GDP terms, but through a broad range of services provided by the environment, natural or manmade as infrastructure, green or grey, that need to last long to deliver those services. Changes in the production and/or provision of ecosystem services, either ignited by human activities or shocks affect human wellbeing. To elucidate that, a recent study by the River Trust finds that recreational fisheries in England’s freshwater bodies alone provide economic benefits of more than £1.7 billion per year (The Rivers Trust, 2021). However, currently, 93% of principal salmon rivers in England are assessed as being at risk due to urban, industrial, and agricultural pollution (Environment Agency, 2020), which, if not reduced, might lead to diminishing market and non-market benefits. Consequently, a goal towards sustainable development would be to eradicate pressures that increase the risk of losing ecosystem services. Such an argument, however, requires caution. For example, agriculture constitutes a significant sector for the production of food, while it is identified as a leading driver of river eutrophication, land use changes, depleting water tables, etc., (Stoate et al., 2009; van Vliet et al., 2015; Monaghan et al., 2013). Reducing agricultural production for the sake of the environment would potentially decrease food security. On the contrary, measures to mitigate pollution such as Nitrate Vulnerable Zones (NVZs), agri-environment schemes (Environmental Stewardship and Countryside Stewardship), and the Catchment Sensitive Farming (CSF) partnership implemented in the UK (Jones et al., 2017), might be proven effective in satisfying dietary needs at a lower environmental impact. From a policy perspective, resource efficiency may be improved through deliberate efforts, without the need to forego economic growth, though technological, institutional, and behavioural transformation may be required as the appearance of rebound effects (Joyce et al., 2019; Shao and Rao, 2018) may cancel out any benefits that may result from decoupling opportunities. For instance, Brockway et al. (2021), analysed 21 Computable Equilibrium Studies and showed a range of rebound effects from 12% to over 200%.
Policy decisions either directly or indirectly affect natural capital and the regenerative capacity of natural ecosystems, which in turn influence economic performance (Borucke et al., 2013). Increasing the capacity of the system to respond to disturbances necessitates radical societal changes (Olsson et al., 2014). A transformation towards sustainable development requires both monitoring such parameters as well as incorporating such considerations into day-to-day decision making. Furthermore, the type of implemented investments is crucial as it determines the path that the system follows from the present to the future. Time delays in systems mean that an intervention may influence different long-run and short-run responses (Sterman, 2015). However, policy interventions are often myopic, prioritizing short-term benefits over long-term successes (Goodwin, 2019; Mayor et al., 2021; Toxopeus and Polzin, 2021), and follow reductionist approaches that promise to provide easy solutions to complex problems. Positive and negative effects that are generated by and unfold in the system are frequently seen as static and external (Sahdev, 2016; LeSage and Fischer, 2012; Carlaw and Lipsey, 2002) often being disregarded from relevant economic analyses reinforcing convictions of system equilibria. In that regard, economics plays the role of promoting understanding of how system properties emerge through concepts related to socioeconomic values (e.g., wellbeing, preferences, benefits, costs, natural capital accounting), and based on that assist in shaping policymakers’ aspirations, contributing to moving away from the “mechanical application of generic rules” (Scott, 1998). In line with this, as Mueller (2020) notes, in order to decrease policy failure, we must opt for those that are “immune to specific problems” created by complexity, meaning actions that do not rely heavily on interventions from policymakers, their design emerges from the bottom up and are able to accommodate the preferences of stakeholders.
In recent years, cost-effective systemic solutions have been gaining increasing currency, currently forming a paradigm of ‘working with nature’ (European Commission, 2020). Nature-based solutions, the leading example of such approaches, demonstrate a new norm of environmental management that aims to address economic and societal challenges, while tackling the global environmental crisis (Maes and Jacobs, 2017). In essence, using nature-based solutions entails a paradigm shift, as it requires abandoning the dichotomy between nature and humans, and generating evidence to increase trust in natural processes (Fernandes and Guiomar, 2018) and the potential of tailor-made approaches to tackle complex socio-environmental issues. An emerging body of research points out that such alternatives can be cheap to implement, with the accruing value of benefits significantly overshooting costs. For instance, Souliotis and Voulvoulis (2022) show that a constructed wetland was able to enhance the quality of water discharged from a recycling centre, creating, and supporting new habitats, at a cost 5 times lower than the installation of new filters to the treatment facilities considered as the alternative.
Still, to truly harvest the benefits of decoupling opportunities through regenerative investments a new paradigm of management is required. Currently, prices and not value determine the selection of policies (Adam, 2014). Therefore, there is an urgent need to broaden the spectrum of costs and benefits that feed into economic analyses, through the quantification and mapping of ecosystem services (Egoh et al., 2008; Willaarts et al., 2012; Tallis and Polasky, 2009; Villa et al., 2009; De Groot et al., 2010) and the development of the associated natural capital accounts (Sumarga et al., 2015; Edens and Hein, 2013) to monitor the flows of goods and services of nature as well as their value (La Notte et al., 2017). Furthermore, assessments need to focus on specific contexts (environmental, cultural, socioeconomic) and scales (local, regional, global) to account for heterogeneity (Hasse and Krücken, 2012) between systems. Besides that, selected policy objectives need to be in accordance with the specific characteristics of the system, its status, and the way it interacts with systems of lower or higher levels (Gunderson and Holling, 2002). Finally, understanding how decision outcomes are valued by stakeholders is a key issue in setting objectives and achieving sustainability (Rammel et al., 2007). Participation may bring to light conflicts among heterogeneous groups of stakeholders, information on the natural environment and its history of changes, as well as promote the acceptance of policy prescriptions (Beyers and Arras, 2021; Santos et al., 2006; Bijls et al., 2011). Addressing socioenvironmental challenges that “sit between science and society” (Surridge and Harris, 2007) calls for structural changes and a transition towards integrated approaches (Jager et al., 2016; Macleod et al., 2007; Pahl-Wostl et al., 2008), based on a better understanding of human-nature interactions and a long-term vision of the socioecological system realised by strategies that promote its longevity and prosperity.
6 Conclusion
Despite advances in research, interdisciplinary collaboration, and rising environmental awareness, society still lacks a deep understanding of socio-ecological processes and a coherent vision for a sustainable future. Competing schools of thought have produced ideological polarization over how to achieve sustainability, yet these positions often converge on two central insights: that business-as-usual is untenable and that systemic change is required.
This study argues that dominant empirical approaches to the relationship between economic growth and environmental degradation are overly reductionist. By treating socio-ecological systems as simple, linear relationships, mainstream analyses overlook the feedbacks, thresholds, and complexities that determine real-world outcomes. Recognizing these limitations highlights the need for a new sustainability paradigm grounded in systems thinking.
Such a paradigm would shift attention away from the scale of economic activity and toward the functioning of socio-ecological systems. Rather than optimising growth rates, the central objective would be to maintain, and ideally enhance, the ecological conditions that support long-term human wellbeing. Development, in this view, is defined not by the quantity of economic output but by the stewardship of interconnected systems whose resilience underpins prosperity. Economics can play a pivotal role in advancing this agenda. By reframing how society understands system interactions and informing decisions consistent with ecological dynamics, economics can help redefine prosperity in ways that align human activity with the stability of the planet.
Data availability statement
The original contributions presented in the study are included in the article/supplementary material, further inquiries can be directed to the corresponding author.
Author contributions
IS: Writing – original draft, Writing – review and editing. NV: Writing – review and editing, Writing – original draft.
Funding
The authors declare that no financial support was received for the research and/or publication of this article.
Conflict of interest
The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.
Generative AI statement
The authors declare that no Generative AI was used in the creation of this manuscript.
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Footnotes
1Regeneration can be understood as the process through which systems renew or recreate the conditions necessary for a desired state to persist or improve (Fischer et al., 2024).
2We follow the argument of Norgaard (2019) that describes the economy as a system consisted of values, knowledge, technology, social organization.
3Gomes and Barros (2022) explain that commonly investments in environmental technologies are lower than the social benefits, which requires governments to provide the conditions to mitigate this issue.
4While both terms denote movement from one state to another, transition refers to the process through which a system evolves, whereas transformation captures a more profound reconfiguration in the system’s structure, functions, or outcomes (Child and Breyer, 2017).
5The study is based on the idea of weak sustainability (Solow, 1974; Solow, 1986; Solow, 1993; Hartwick, 2017; Hartwick, 1978; Hartwick, 1990) that does not account for ecological sustainability.
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Keywords: sustainable development, systems thinking, natural capital, economics, development
Citation: Souliotis I and Voulvoulis N (2025) Sustainability transitions: the role of systems thinking in improving planetary health and human prosperity. Front. Environ. Sci. 13:1730692. doi: 10.3389/fenvs.2025.1730692
Received: 23 October 2025; Accepted: 25 November 2025;
Published: 18 December 2025.
Edited by:
May Massoud, American University of Beirut, LebanonReviewed by:
Irina Georgescu, Bucharest Academy of Economic Studies, RomaniaPeipei Tian, Shandong University, China
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*Correspondence: Nikolaos Voulvoulis, bi52b3Vsdm91bGlzQGltcGVyaWFsLmFjLnVr