Environmental Environmental Economics, Politics, and Economics, Politics, and

WorldviewsWorldviews

Chapter 2Chapter 2

Key ConceptsKey Concepts

Neoclassical and ecological economicsNeoclassical and ecological economics

Monitoring environmental progressMonitoring environmental progress

Full-cost pricingFull-cost pricing

Poverty and lower environmental qualityPoverty and lower environmental quality

Shifting to environmentally sustainable economiesShifting to environmentally sustainable economies

US environmental policiesUS environmental policies

Guidelines for environmental policiesGuidelines for environmental policies

Environmental worldviewsEnvironmental worldviews

Living sustainablyLiving sustainably

Biosphere 2: A Lesson in HumilityBiosphere 2: A Lesson in Humility

PurposePurpose

Located near Tucson, Arizona, USALocated near Tucson, Arizona, USA

Unexpected consequencesUnexpected consequences

Effects from the outsideEffects from the outside

Lessons learnedLessons learned

Fig. 18-1, p. 412

Biosphere 2: A Lesson in HumilityBiosphere 2: A Lesson in Humility

Fig. 18-1, p. 412

Economics and Economic Economics and Economic ResourcesResources

What is economics? What is economics?

Market-based economic systemMarket-based economic system

MarketsMarkets

Natural resources (natural capital)Natural resources (natural capital)

Human resources (human capital)Human resources (human capital)

Manufactured resources (manufactured capital)Manufactured resources (manufactured capital)

Natural Resources

Manufactured Resources

Human Resources

Goods and Services

Fig. 18-2, p. 414

Types of Resources Types of Resources

+ + =

Types of EconomistsTypes of Economists

Neoclassical economists Neoclassical economists

Ecological economistsEcological economists

Environmental economistsEnvironmental economists

Environmentally sustainable economy (eco-economy)Environmentally sustainable economy (eco-economy)

Suggestions for transitioning to an eco-economySuggestions for transitioning to an eco-economy

Fig. 18-3, p. 414

SunEARTH

Natural CapitalAir; water, land, soil, biodiversity, minerals, raw materials, energy resources, and dilution, de-gradation, and recycling services

EconomicSystems

Production

Consumption

Heat

Depletion of nonrenewableresources

Degradation and depletion of renewable resources used faster than replenished

Pollution and waste from overloading nature’s waste disposal and recycling systems

Ecological Economics Ecological Economics

©2006 Brooks/Cole - Thomson

Characteristic

Production emphasis

Natural resources

Resource productivity

Resource throughput

Resource typeemphasized

Resource fate

Pollution control

Guiding principles

UnsustainableEconomic Growth

Quantity

Not very important

Inefficient (high waste)

High

Nonrenewable

Matter discarded

Cleanup(output reduction)

Risk–benefitanalysis

EnvironmentallySustainableEconomic

Development

Quality

Very important

Efficient (low waste)

Low

Renewable

Matter recycled,reused, or composted

Prevention(input reduction)

Prevention andprecaution

Unsustainable Economic Growth and Unsustainable Economic Growth and Sustainable Economic Development Sustainable Economic Development

Fig. 18-4, p. 415

Recycling, reuse,and composting

Production ofenergy-efficientfuel-cell cars

Deep-seaCO2 storage

Underground CO2

storage usingabandoned oil wells

Landfill

Cluster housing development

Bicycling

High-speed trains

Wind farms

Waterconservation

Recyclingplant

Solar-cellfields

Communities ofpassive solar homes

No-tillcultivation

Forestconservation

Fig. 18-5, p. 416

Components of Sustainable Economic Development Components of Sustainable Economic Development

Environmental and Economic Environmental and Economic IndicatorsIndicators

Gross domestic product (GDP) Gross domestic product (GDP)

Per capita GDPPer capita GDP

Limits of economic indicatorsLimits of economic indicators

Genuine progress indicator (GPI)Genuine progress indicator (GPI)

Fig. 18-6, p. 417

35,0001

99

6 D

oll

ars

pe

r p

ers

on

Per capita genuine progress indicator (GPI)

01960 1970 1980 1990

Year

20001950

Per capita gross domestic product (GDP)

5,000

10,000

15,000

20,000

25,000

30,000

Per Capita GDP vs. Per Capita Per Capita GDP vs. Per Capita GPI for the US (1950-2002) GPI for the US (1950-2002)

Economics and Environmental Economics and Environmental QualityQuality

Internal costsInternal costs

External costsExternal costs

Full-cost pricingFull-cost pricing

Government subsidies and tax breaksGovernment subsidies and tax breaks

Green taxes and feesGreen taxes and fees

Tax shiftingTax shifting

Environmental tax reformEnvironmental tax reform

Trade-Offs

Environmental Taxes and Fees

Advantages Disadvantages

Fig. 18-7, p. 418

Tradeoffs of Green Taxes and FeesTradeoffs of Green Taxes and Fees

Helps bring about full-cost pricing

Provides incentive for businesses to do better to save money

Can change behavior of polluters and consumers if taxes and fees are set at a high enough level

Easily administered by existing tax agencies

Fairly easy to detect cheaters

Penalizes low-income groups unless safety nets are provided

Hard to determine optimum level for taxes and fees

Need to frequently readjust levels, which is technically and politically difficult

Governments may see this as a way of increasing general revenue instead of using funds to improve environmental quality and reduce taxes on income, payroll, and profits

© 2006 Brooks/Cole - Thomson Fig. 18-8, p. 419

Advantages of Less Taxing of Wages and Profits Advantages of Less Taxing of Wages and Profits

and More Taxing of Pollution and Wasteand More Taxing of Pollution and Waste •Decreases depletion and degradation of natural resources

•Improves environmental quality by full-cost pricing

•Encourages pollution prevention and waste reduction

•Stimulates creativity in solving environmentalproblems to avoid paying pollution taxes and therebyincreases profits

•Rewards recycling and reuse

•Relies more on marketplace rather than regulation forenvironmental protection

•Provides jobs

•Can stimulate sustainable economic development

•Allows cuts in income, payroll, and sales taxes

Environmental Laws and Environmental Laws and RegulationsRegulations

Environmental regulationsEnvironmental regulations

Innovation-friendly regulationsInnovation-friendly regulations

Tradable pollution and resource-use permitsTradable pollution and resource-use permits

Eco-labelingEco-labeling

Trade-Offs

Tradable Environmental Permits

Advantages Disadvantages

Flexible

Easy to administer

Encourages pollution prevention and waste reduction

Can guarantee achievement of caps

Permit prices determined by market transactions

Confronts ethical problem of how much pollution or resource waste is acceptable

Confronts problem of how permits should be fairly distributed

Big polluters and resource wasters can buy their way out

May not reduce pollution at dirtiest plants

Can exclude small companies frombuying permits

Caps can be too low

Caps must be gradually reduced to encourage innovation

Determining caps is difficult

Must decide who gets permits and why

Administrative costs high with many participants

Emissions and resource wastes must be monitored

Self-monitoring can promote cheating

Sets bad example by selling legal rights to pollute or waste resources

Fig. 18-9, p. 420

Tradeoffs of Tradable Pollution Tradeoffs of Tradable Pollution

Fig. 18-10, p. 420

Eco-labeling Programs in Eco-labeling Programs in Various Countries Various Countries

Germany:Blue Angel (1978)

Canada:Environmental Choice (1988)

United States:Green Seal (1989)

Nordic Council:White Swan (1989)

European Union:Eco-label (1992)

China:Environmentallabel (1993)

PovertyPoverty

What is poverty?What is poverty?

World poverty and homelessnessWorld poverty and homelessness

Environmental and human health impacts of povertyEnvironmental and human health impacts of poverty

Neoclassical economists’ solutions (trickle-down effect)Neoclassical economists’ solutions (trickle-down effect)

Wealth gapWealth gap

Upward flow of wealthUpward flow of wealth

Causes of povertyCauses of poverty

Poverty and HomelessnessPoverty and Homelessness

Fig. 18-11, p. 421

Fig. 18-12, p. 421

Richest fifth85%

Poorest fifth1.3%

Global Distribution of Income Global Distribution of Income

Reducing PovertyReducing Poverty

Shifting national budgetsShifting national budgets

Poor need land for agriculturePoor need land for agriculture

Conditionally forgiving debts of developing countriesConditionally forgiving debts of developing countries

Increasing aid directly to the poor in developing countriesIncreasing aid directly to the poor in developing countries

Global effort to eliminate malnutrition and infectious diseasesGlobal effort to eliminate malnutrition and infectious diseases

Small loans to the poorSmall loans to the poor

Global OutlookGlobal Outlook, p. 423, , p. 423, Microloans for the PoorMicroloans for the Poor

Investments in small-scale infrastructuresInvestments in small-scale infrastructures

Transitions to eco-economiesTransitions to eco-economies

© 2006 Brooks/Cole - Thomson

Fig. 18-13, p. 422

Expenditures per year (2003)

$12 billion

$11 billionprovide basic healthcare for all

provide clean drinking water for all

$12 billion

Expenditures per year needed to

$19 billioneliminate hunger and malnutrition

eliminate illiteracy

protect tropical forests

$5 billion

$8 billion

$29 billionU.S. highways

U.S. military $449 billion

$956 billionWorld military

U.S. cosmetics

U.S. foreign aid

U.S. EPA

U.S. pet foods

$8 billion

$8 billion

$8 billion

What Should be Our Priorities? What Should be Our Priorities?

Fig. 18-14, p. 423

Economics EnvironmentallySustainable

Economy(Eco-Economy)

Resource Useand Pollution

Ecology andPopulation

Reward (subsidize) earth-sustaining behavior

Penalize (tax and do notsubsidize) earth-degrading behavior

Shift taxes from wages and profits to pollution and waste

Use full-cost pricing

Sell more services insteadof more things

Do not deplete naturalcapital

Live off income fromnatural capital

Reduce poverty

Use environmental indicators to measureprogress

Certify sustainable practices and products

Use eco-labels on products

Reduce resource useand waste by refusing,reducing, reusing, andrecycling

Improve energyefficiency

Rely more onrenewable solar andgeothermal energy

Shift from a carbonbased (fossil fuel)economy to asolar–hydrogen basedeconomy

Mimic nature

Preserve biodiversity

Repair ecologicaldamage

Stabilize population by reducing fertility

Principles for Shifting to Eco-Principles for Shifting to Eco-EconomiesEconomies

Factors Hindering the Ability of Democracies to Factors Hindering the Ability of Democracies to Deal with Environmental ProblemsDeal with Environmental Problems

PoliticsPolitics

Constitutional democraciesConstitutional democracies

Checks and balances between executive, judicial, and legislativeChecks and balances between executive, judicial, and legislative

Special-interest groupsSpecial-interest groups

Profit-making organizationsProfit-making organizations

Nonprofit nongovernmental organizations (NGOs)Nonprofit nongovernmental organizations (NGOs)

Dealing with long-term environmental problemsDealing with long-term environmental problems

Developing Environmental PoliciesDeveloping Environmental Policies

What is environmental policy?What is environmental policy?

Principles for making environmental policy decisions (list, p. 424)Principles for making environmental policy decisions (list, p. 424)

Individuals matterIndividuals matter

Bottom up (grassroots) changeBottom up (grassroots) change

Environmental leadershipEnvironmental leadership

Lead by exampleLead by example

Work in the systemWork in the system

““Vote with our wallets”Vote with our wallets”

Run for officeRun for office

Propose and work for better solutionsPropose and work for better solutions

Democracy in ActionDemocracy in Action

Fig. 18-15, p. 425

© 2006 Brooks/Cole - Thomson

Fig. 18-16, p. 425

•Become informed on issues

•Run for office (especially at local level)

•Make your views known at public hearings

•Make your views known to elected representatives

•Contribute money and time to candidates for office

•Vote

•Form or join nongovernment organizations (NGOs)

seeking change

•Support reform of election campaign financing

What Can You Do?

Influencing Environmental Policy

What Can You Do?What Can You Do?

Environmental Policy in the USEnvironmental Policy in the US

Federal government and policyFederal government and policy

LawsLaws

US Environmental lawsUS Environmental laws

FundingFunding

RegulationsRegulations

Court appealsCourt appeals

Politics in government agenciesPolitics in government agencies

LobbyingLobbying

““The revolving door”The revolving door”

Policy life cyclePolicy life cycle

Purchase recyclable, recycled, and environmentally safe products

Recycle cans, bottles, paper, and plastic

Plant a garden

Individual

Donate clothesand used goods to charities

Use water, energy, and other resources efficiently

Use mass transit,walk, ride abike, or carpool

Laws and regulations

Membership support

Lawyers

Courts

Boycotts

Environmentalorganizations

Legal action

Laws andregulations

Corporations and small businesses

Special interest groups

Lobbyists Lobbyists

Lawmaking body

Public advisory

Public hearing

Regulating enforcement body

Fig. 18-17, p. 426

Enacting Environmental Legislation in the USEnacting Environmental Legislation in the US

Lawyers

Legal action

Fig. 18-18, p. 427

National Energy Act

1970

1971

1972

1969

1973

1974

1975

1976

1977

1978

1979

National Environmental Policy Act (NEPA) 1969

Clean Air Act

Clean Water Act; Coastal Zone Management Act;Federal Insecticide, Fungicide, and Rodenticide Act;Marine Mammal Protection Act

Endangered Species Act

Safe Drinking Water Act

Resource Conservation and Recovery Act; Toxic Substances Control Act; National Forest Management Act

Soil and Water Conservation Act; Clean Water Act;Clean Air Act Amendments

Major US Environmental Laws Major US Environmental Laws Since 1969Since 1969

Fig. 18-18, p. 427

1981

1982

1983

1980

1984

1985

1986

1987

1988

1989

Superfund (CERCLA); National Energy Act Amendments; Coastal Zone Management Act Amendments

Endangered Species Act Amendments

Hazardous and Solid Waste Amendment Act (SARA); Safe Drinking Water Act Amendments

Endangered Species Act Amendments

Clean Water Act Amendments

Federal Insecticide , Fungicide, and Rodenticide Act Amendments; Endangered Species Act Amendments

Superfund Amendments and Reauthorization

Major US Environmental Laws Major US Environmental Laws Since 1969Since 1969

Fig. 18-18, p. 427

1991

1992

1993

1990

1994

1995

1996

Clean Air Act Amendments; Reauthorization of Superfund; Waste Reduction Act

Energy Policy Act

Endangered Species Act Amendments

Safe Drinking Water Act Amendments

Major US Environmental Laws Major US Environmental Laws Since 1969Since 1969

© 2006 Brooks/Cole - Thomson

Nonpoint-source water pollution

Indoor air pollution

Reuse

Mining wastes

Groundwater contamination

Environmentally harmful subsidies

Market prices do not include environmentallyharmful costs

Integrated environmentalmanagement

RecognitionIdentify the problem.

Global warming

Urban sprawl

Nuclear wastes

Biodiversityprotection

Pollution prevention

Toxic wastes

Resourceproductivity

Aquifer depletion

Environmentaljustice

Sustainable economicdevelopment

FormulationLook for solutions.

Acid deposition

Ozone depletion

Municipal solid waste

Protecting endangeredspecies

Pest control

Soil erosion

ImplementationImplement solutions.

Outdoor air pollution

Sewage treatment

Drinking watertreatment

Point source water pollution

Recycling

Some infectiousdiseases

ControlThings are improving.

Fig. 18-19, p. 428

Policy Life CyclePolicy Life Cycle

Mainline and Grassroots Mainline and Grassroots Environmental GroupsEnvironmental Groups

Nonprofit nongovernmental organizations (NGOs)Nonprofit nongovernmental organizations (NGOs)

Grassroots groupsGrassroots groups

Lobbying effortsLobbying efforts

Working with industries to solve environmental problemsWorking with industries to solve environmental problems

Global sustainability movementGlobal sustainability movement

Internet and “bottom up” changesInternet and “bottom up” changes

Community actionCommunity action

Environmental justiceEnvironmental justice

Protest marches and tree sittingProtest marches and tree sitting

Acts of violenceActs of violence

Environmental Action in the USEnvironmental Action in the US Environmental awareness on campusesEnvironmental awareness on campuses

Environmental audits of campusesEnvironmental audits of campuses

Green dormitoriesGreen dormitories

Accomplishments of environmental groupsAccomplishments of environmental groups

Polls of the US publicPolls of the US public

Opposition to environmental groupsOpposition to environmental groups

Explaining unseen environmental problems to the publicExplaining unseen environmental problems to the public

Developing environmentally sustainable political and economic systemsDeveloping environmentally sustainable political and economic systems

Encouraging experiments in sustainability (Curitiba, Brazil)Encouraging experiments in sustainability (Curitiba, Brazil)

Looking for solutionsLooking for solutions

Fostering Cooperation on Environmental Fostering Cooperation on Environmental Issues Rather than ConfrontationIssues Rather than Confrontation

Recognize that business is not the enemyRecognize that business is not the enemy

Emphasize pollution preventionEmphasize pollution prevention

Emphasize market place solutions rather than regulationEmphasize market place solutions rather than regulation

Look for “win-win” solutionsLook for “win-win” solutions

Don’t exaggerateDon’t exaggerate

Be responsibleBe responsible

Global Environmental PolicyGlobal Environmental Policy

Military, economic, and environmental securityMilitary, economic, and environmental security

International environmental organizationsInternational environmental organizations

UN organizationsUN organizations

World bankWorld bank

Global Environment Facility, World Conservation Union, etc.Global Environment Facility, World Conservation Union, etc.

Roles of various organizationsRoles of various organizations

International cooperationInternational cooperation

Trade-OffsGlobal Efforts on

Environmental Problems

Good News Bad News

Environmental protection agencies in 115 nations

Over 500 international environmental treaties and agreements

UN Environment Programme (UNEP) created in 1972 to negotiate and monitor international environmental treaties

1992 Rio Earth Summit adopted key principles for dealing with global environmental problems

2002 Johannesburg Earth Summit attempted to implement policies and goals of 1992Rio summit and find ways to reduce poverty

Most international environmental treaties lack criteria for monitoring and evaluating their effectiveness

1992 Rio Earth Summit led to nonbinding agreements without enough funding to implement them

By 2003 there was little improvement in the major environmental problems discussed at the 1992 Rio Earth Summit

2002 Johannesburg Earth Summit failed to provide adequate goals, deadlines, and funding for dealing with global environmental problems such as climate change, biodiversity loss, and poverty Fig. 18-20, p. 431

Global Environmental EffortsGlobal Environmental Efforts

Environmental WorldviewsEnvironmental Worldviews What is an environmental worldview?What is an environmental worldview?

Environmental ethicsEnvironmental ethics

Views widely vary and often conflictViews widely vary and often conflict

Human-centered views: planetary management and stewardshipHuman-centered views: planetary management and stewardship

Instrumental valueInstrumental value

Life-centered views: environmental wisdomLife-centered views: environmental wisdom

Inherent or intrinsic valueInherent or intrinsic value

Ecocentric viewEcocentric view

© 2006 Brooks/Cole - Thomson

Planetary Management

• As the planet’s most important species, we are in charge of the earth.

• Because of our ingenuity and technology we will not run out of resources.

• The potential for economic growth is essentially unlimited.

• Our success depends on how well we manage the earth’s life-support systems mostly for our benefit

Environmental Wisdom

• Nature exists for all species and we are not in charge of the earth.

• Resources are limited, should not be wasted, and are not all for us.

• We should encourage earth- sustaining forms of economic growth and discourage earth degrading forms.

• Our success depends on learning how the earth sustains itself and integrating such lessons from nature into the ways we think and act

Stewardship

• We are the planet’s most important species but we have an ethical responsibility to care for the rest of nature.

• We will probably not run out of resources, but they should not be wasted. • We should encourage environmentally beneficial forms of economic growth and discourage environmentally harmful forms.

• Our success depends on how well we manage the earth’s life-support systems for our benefit and for the rest of nature

Environmental Worldviews

Fig. 18-21, p. 432

Environmental WorldviewsEnvironmental Worldviews

Environmental Wisdom Environmental Wisdom WorldviewWorldview

Fig. 18-22, p. 433

Living More SustainablyLiving More Sustainably

Environmental literacy: key goals and basic comprehension (p. 433)Environmental literacy: key goals and basic comprehension (p. 433)

Ecological identityEcological identity

Learning from the EarthLearning from the Earth

Sense of placeSense of place

Living more simplyLiving more simply

Avoiding materialismAvoiding materialism

Principle of enoughnessPrinciple of enoughness

Becoming better environmental citizensBecoming better environmental citizens

Avoiding traps Avoiding traps

Components of the Components of the Environmental RevolutionEnvironmental Revolution

Environmental or sustainability revolutionEnvironmental or sustainability revolution

Biodiversity protectionBiodiversity protection

EfficiencyEfficiency

EnergyEnergy

Pollution preventionPollution prevention

SufficiencySufficiency

DemographicsDemographics

Economics and politicsEconomics and politics

Individuals matterIndividuals matter

““All sustainability is local” and “Think globally, act locally”All sustainability is local” and “Think globally, act locally”

SolutionsDeveloping Environmentally

Sustainable Societies

Guidelines Strategies

Leave world in as good a shape as—or better than—we found it

Do not degrade or deplete the earth's natural capital, and live off the natural income it provides

Copy nature

Take no more than we need

Do not reduce biodiversity

Try not to harm life, air, water, soil

Do not change the world's climate

Help maintain the earth's capacity for self-repair

Do not overshoot the earth's carrying capacity

Repair past ecological damage

Sustain biodiversity

Eliminate poverty

Develop eco-economies

Build sustainable communities

Do not use renewable resources faster than nature can replace them

Use sustainable agriculture

Depend more on locally available renewable energy from the sun, wind, flowing water, and sustainable biomass

Emphasize pollution prevention and waste reduction

Do not waste matter and energy resources

Recycle, reuse, and compost 60–80% of matter resources

Maintain a human population size such that needs are met without threatening life-support systems

Emphasize ecologicalrestoration

Fig. 18-23, p. 434

Environmentally Sustainable Environmentally Sustainable SocietiesSocieties