The 'most important' economic development

During the '70s, much ink and energy were devoted to the ''growth versus no growth'' debate. Spawned by publication of ''The Limits to Growth'' in 1972, the argument never seemed to lead anywhere, perhaps in part because it was not appropriately framed.

Now, as the '80s begin, the issue appears to be more a choice between growth and sustainability - the capacity to maintain various operations in the face of scarcities or changes in resources. There is already evidence of a subtle but unmistakable shift in investment away from that designed to achieve growth and toward that designed to ensure sustainability. This new attention to sustainability at the expense of near-term growth in both the public and private sectors may be the most important, but analytically neglected, economic development of recent years.

This shift takes many forms, but investments in various renewable energy sources and in energy conservation as replacements for oil or natural gas and, to a lesser degree, coal are among the most numerous. Occasionally, renewable sources will supplement nonrenewable ones, but for the most part they will substitute for them, helping to sustain rather than expand the economy. Although the switch in energy sources may not increase energy output, the investment in new equipment used in the conversions will boost GNP in the short run.

Electric utilities are already investing heavily in converting existing generating capacity from oil to coal, geothermal power, hydropower (large-scale or small-scale), wind power, and, in a handful of countries, wood-fired capacity. Substantial though such investments are, most are aimed not at increasing generating capacity but at ensuring that the utility will continue to generate electricity as oil supplies dwindle. Likewise, in countries shifting to alcohol fuels the large investment in fuel-grade distilleries to replace oil refineries will not increase the liquid fuel supply. But it will help keep the arteries of transportation open as oil supplies dwindle.

Corporations the world over are investing large sums of money to ensure that their operations can be sustained. For example, the Scott Paper Company, one of the world's largest manufacturers of paper products, is converting its oil-fired plant and electrical generating complex in Maine so that it can be fueled with wood. This $65 million expenditure will not increase the Scott Paper Company's output of tissues by one box. But the company thinks the investment is justified because it will mean that output can be sustained when oil is no longer available. Worldwide, hundreds of similar investments are being made in the paper and wood-products industry.

The aluminum industry, too, is changing, for plants are being relocated as part of the shift from fossil fuels to renewable energy sources. Perhaps the most dramatic early example of such a shift involves the migration of aluminum firms to the Amazon. Brazil plans to exploit the enormous hydroelectric potential of the Amazon and its tributaries for this manufacturing process, while aluminum firms from the United States, Canada, the Netherlands, West Germany, and Japan are also investing in Brazil. As a direct consequence, Brazil's aluminum output has quadrupled in 10 years, a pace that appears likely to continue as other investment plans materialize. Clearly opting for sustainability of aluminum production over growth in output per se, Japanese firms are closing their domestic fossil-fuel-based aluminum facilities as they build new plants in Brazil and elsewhere.

Until recently, new investment in the American automobile industry was largely in new plants for expanded output. Now, however, the automobile manufacturers are committing vast sums of money to the design and production of more fuel-efficient automobiles. The associated retooling investments, the largest in the industry's history, are not intended to expand automobile production capacity but rather to help ensure that automobile-centered transport systems will become efficient enough to survive as liquid fuels become scarce.

In households, investment trends are starting to reflect the same philosophy that industry and governments are adopting. During the '50s and '60s, most home-improvement loans in the US were for adding new rooms either for family expansion or recreation. In the late '70s, this investment pattern began to shift as homeowners invested more and more in insulation, solar retrofitting, and other ''no-growth'' measures in an effort to reduce their energy bills. These investments do not increase the capacity of the home, but they do help ensure that the house will remain comfortable and affordable as energy prices climb.

This belated concern with sustainability is now permeating the thinking of government planners and corporate executives as well as individual consumers. Engineering the transition to a sustainable society may become an all-absorbing activity, one that will eclipse growth as the focus of economic policymaking.Lester R. Brown is president of the Worldwatch Institute and author of the recently published book ''Building a Sustainable Society'' on which this article is based.