Ch 2 Environmental Ethics and Economics: Values and Choices Part 1: Foundations of Environmental Science PowerPoint® Slides prepared by Jay Withgott and Heidi Marcum Copyright © 2008 Pearson Education, Inc., publishing as Benjamin Cummings

This lecture will help you understand: Culture and worldviews Environmental ethics Classical and neoclassical economics Economic growth, economic health, and sustainability Environmental and ecological economics

Central Case: The Mirrar Clan Confronts the Jabiluka Uranium Mine Uranium deposits in Australia often occur on sacred Aboriginal land The Mirrar oppose the mine for cultural, religious, ethical, health, and economic reasons The mine will not be developed unless the Mirrar agree

Ethics and economics Both disciplines deal with what we value Our values affect our environmental decisions and actions

Culture and worldview Our relationship with the environment depends on assessments of costs and benefits Culture and worldview also affects this relationship Culture = knowledge, beliefs, values, and learned ways of life shared by a group of people Worldview = a person’s or group’s beliefs about the meaning, purpose, operation, and essence of the world Culture and worldview affect our perception of the environment and environmental problems

Worldviews differ among people Different worldviews result in different perceptions Aborigines saw the negative environmental impacts of the Jabiluka mine Others saw jobs, income, and energy from the mine

Many factors shape worldviews Religions Communities Political ideology Economics Individual interests Vested interest = an individual with strong interests in the outcome of a decision that results in gain or loss for that individual

Ethics Ethics = the study of good and bad, right and wrong Relativists = ethics varies with social context Universalists = right and wrong remains the same across cultures and situations Ethical standards = criteria that help differentiate right from wrong Classical standard = virtue The golden rule Utility = something right produces the most benefits for the most people

Environmental ethics Environmental ethics = application of ethical standards to relationships between human and non-human entities Hard to resolve; depends on the person’s ethical standards Depends on the person’s domain of ethical concern Should we conserve resources for future generations? Is is OK to destroy a forest to create jobs for people? Should humans drive other species to extinction? Is it OK for some communities to be exposed to excess pollution?

We have expanded our ethical consideration To include animals, communities, nature

Expanding ethical concern Why have we expanded our ethical concerns? Economic prosperity: more leisure time, less anxieties Science: interconnection of all organisms Non-western cultures often have broader ethical domains Three perspectives in Western ethics Anthropocentrism = only humans have rights Biocentrism = certain living things also have value Ecocentrism = whole ecological systems have value Holistic perspective, stresses preserving connections

Western ethical expansion

History of environmental ethics People have questioned our relationship with the environment for centuries Christianity’s attitude towards the environment Anthropocentric hostility, or Stewardship? The Industrial Revolution increased consumption and pollution People no longer appreciated nature Transcendentalism = nature is a manifestation of the divine Ralph Waldo Emerson, Henry David Thoreau

The preservation ethic Unspoiled nature should be protected for its own inherent value John Muir (right, with President Roosevelt at Yosemite National Park) had an ecocentric viewpoint

The conservation ethic Use natural resources wisely for the greatest good for the most people Gifford Pinchot had an anthropocentric viewpoint

The land ethic Healthy ecological systems depend on protecting all parts Aldo Leopold believed the land ethic changes the role of people from conquerors of the land to citizens of it

Deep ecology, ecofeminism, and justice Deep ecology = humans are inseparable from nature Since all living things have equal value, they should be protected Ecofeminism = male-dominated societies have degraded women and the environment through fear and hate Female worldview = cooperation Environmental justice = the fair and equitable treatment of all people regarding environmental issues Wealthy nations dump hazardous waste in poorer nations with uninformed residents

Environmental justice (EJ) The poor and minorities are exposed to more pollution, hazards, and environmental degradation 75% of toxic waste landfills in the southeastern U.S. are in communities with higher racial minorities

Environmental justice and Native Americans From 1948 to the 1960s, Navajo miners were not warned of radiation risks, nor provided protection by the industry or the U.S. government

Economics Friction occurs between people’s ethical and economic impulses Is there a trade-off between economics and the environment? Generally, environmental protection is good for the economy Economics studies how people use resources to provide goods and services in the face of demand Most environmental and economic problems are linked Root “oikos” gave rise to both ecology and economics

Types of modern economies Economy = a social system that converts resources into Goods: manufactured materials that are bought, and Services: work done for others as a form of business Subsistence economy = people get their daily needs directly from nature; they do not purchase or trade Capitalist market economy = buyers and sellers interact to determine prices and production of goods and services Centrally planned economy = the government determines how to allocate resources Mixed economy = governments intervene to some extent

Government intervenes in a market economy Even in capitalist market economies, governments intervene to: • Eliminate unfair advantages • Provide social services • Provide safety nets • Manage the commons • Mitigate pollution

Conventional view of economics Conventional economics focuses on production and consumption Ignores the environment The environment is an external “factor of production”

Environmental view of economics Human economies exist within, and depend on, the environment Without natural resources, there would be no economies

Environmental systems support economies Ecosystem services = essential services support the life that makes economic activities possible *Soil formation *Pollination *Water purification *Nutrient cycling *Climate regulation *Waste treatment Economic activities affect the environment Deplete natural resources Produce too much pollution

Classical economics Competition between people free to pursue their own economic self-interest will benefit society as a whole (Adam Smith, 1723-1790) The market is guided by an “invisible hand” This idea is a pillar of free-market thought today It is also blamed for economic inequality Rich vs. poor Critics think that market capitalism should be restricted by government

Neoclassical economics Examines the psychological factors underlying consumer choices Market prices are explained in terms of consumer preferences Buyers vs. sellers The “right” quantities of a product are produced The market favors equilibrium between supply and demand

Marginal benefit and cost curves Cost-benefit analysis = the costs of a proposed action are compared to the benefits that result from the action If benefits > costs: pursue the action Not all costs and benefits can be identified Marginal benefit and cost curves determine an “optimal” level of resource use or pollution mitigation

Neoclassical economics Enormous wealth and jobs are generated Environmental problems are also created Assumptions of neoclassical economics: Resources are infinite or substitutable Costs and benefits are internal Long-term effects are discounted Growth is good

Assumption: Resources are infinite Economic models treat resources as substitutable and interchangeable A replacement resource will be found But, Earth’s resources are limited Nonrenewable resources can be depleted Renewable resources can also be depleted For example, Easter Islanders destroyed their forests

Assumption: Costs and benefits are internal Costs and benefits are experienced by the buyer and seller alone Do not affect other members of the society Pricing ignores social, environmental or economic costs Externalities = costs or benefits involving people other than the buyer or seller External costs = borne by someone not involved in a transaction Human health problems Resource depletion Hard to account for and eliminate How do you assign monetary value to illness?

Assumptions: Long-term effects are discounted and growth is good A future event counts less than a present one Discounting = short-term costs and benefits are more important than long-term costs and benefits Policymakers ignore long term consequences of our actions Discourages attention to resource depletion and pollution Economic growth is necessary to maintain employment and social order Promoting economic growth creates opportunities for poor to become wealthier Progress is measured by economic growth

Is the growth paradigm good for us? “More and bigger is better” The dramatic rise in per-person consumption has severe environmental consequences

Is economic growth sustainable? Affluenza = material goods do not always bring contentment Uncontrolled economic growth is unsustainable Technology can push back limits, but not forever More efficient resource extraction and food production perpetuates the illusion that resources are unlimited Many economists believe technology can solve everything

Other types of economists Ecological economists = civilizations cannot overcome environmental limitations Steady state economies should mirror natural ecological systems Calls for revolution Environmental economists = unsustainable economies have high population growth and inefficient resource use Modify neoclassical economics to increase efficiency Calls for reform

A steady state economy As resources became harder to find, economic growth slows and stabilizes (John Stuart Mill, 1806-1873) We must rethink our assumptions and change our way of economic transactions This does not mean a lower quality of life Economies are measured in various ways Gross Domestic Product (GDP) = total monetary value of final goods and services produced Does not account for nonmarket values Pollution increases GDP

GPI: An alternative to the GDP Genuine Progress Indicator (GPI) = differentiates between desirable and undesirable economic activity Positive contributions (i.e. volunteer work) not paid for with money are added to economic activity Negative impacts (crime, pollution) are subtracted In the U.S., GDP has risen greatly, but not GPI

More “green accounting” indicators Net Economic Welfare (NEW) = adjusts GDP by adding the value of leisure time, while deducting environmental degradation Sustainable Economic Welfare (ISEW) = based on income, wealth distribution, resource depletion These indicators give a more accurate indication of a nation’s welfare Very controversial, hard to practice

Valuing ecosystems goods and services Our society mistreats the very systems that sustain it The market ignores/undervalues ecosystem values Nonmarket values = values not included in the price of a good or service

Assigning value to ecosystem services Contingent valuation = uses surveys to determine how much people are willing to pay to protect or restore a resource Measures expressed preferences But, since people don’t really pay, they may overinflate values Revealed preferences = revealed by actual behavior Time, money, effort people spend Measuring the actual cost of restoring natural systems The global value of all ecosystem services = $42 trillion!

Markets can fail Market failure = markets do not account for the environment’s positive impacts Markets do not reflect the negative effects of activities on the environment or people (external costs) Government intervention counters market failure Laws and regulations Green taxes = penalize harmful activities Economic incentives to promote conservation and sustainability

Ecolabeling addresses market failures The market can be used to counter market failure Create markets in permits Ecolabeling = tells consumers which brands use sustainable processes A powerful incentive for businesses to switch to better processes “Dolphin safe” tuna Socially responsible investing in sustainable companies

Corporations are responding to concerns Industries, businesses, and corporations can make money by “greening” their operations Local sustainably oriented businesses are being started Large corporations are riding the “green wave” of consumer preference for sustainable products Nike, Gap Be careful of greenwashing, where consumers are misled into thinking companies are acting sustainably

Conclusion Recent developments have brought economic approaches to bear on environmental protection and conservation Environmental ethics has expanded people’s ethical considerations Economic welfare can be enhanced without growth, resulting in economic health and environmental quality

QUESTION: Review An ecocentric worldview would consider the impact of an action on… ? a) Humans only b) Animals only c) Plants only d) All living things e) All nonliving things Answer: d

QUESTION: Review Which ethic holds that healthy ecosystems depend on the protection of all their parts? a) Preservation ethic b) Land ethic c) Conservation ethic d) Deep ecology e) Biocentrism Answer: b

QUESTION: Review Which of the following is an ecosystem service? a) Water purification in wetlands b) Climate regulation in the atmosphere c) Nutrient cycling in ecosystems d) Waste treatment by bacteria e) All of the above Answer: e

QUESTION: Review Which is NOT an assumption of neoclassical economics that can lead to environmental degradation? a) Resources are limited b) Long-term effects are downplayed c) All costs and benefits are experienced by the buyer and seller alone d) Growth is good Answer: a

QUESTION: Review Which of the following statements would be spoken by an ecological economist? a) The current economic system is working fine b) The current economic system simply needs to be fine-tuned c) The current economic system is broken and a new one needs to be developed d) Economic systems never work Answer: c

QUESTION: Interpreting Graphs and Data Market equilibrium, which sets the price of a product, is reached … a) When supply exceeds demand b) When demand exceeds supply c) By demand when quantity is low, and supply when quantity is high d) When supply equals demand Answer: d

QUESTION: Interpreting Graphs and Data Which conclusion can you draw from this graph? a) GDP has not really increased since 1950 b) Although we are spending more money, our lives are not much better c) We are spending less money, and our lives are much better d) The GPI is not as accurate as GDP Answer: b

QUESTION: Viewpoints Think of an issue in your community that could pit environmentalists against economic development. What do you think should prevail: environmental protection or economic development? a) Economic growth; we need the jobs b) Environmental protection; we need the environment Both; a compromise must be reached Whatever costs the taxpayers the least Answer: any

QUESTION: Viewpoints What entities do you include in your domain of ethical concern? a) Humans only b) Humans and pets Humans, pets, and other animals Humans, pets, other animals, and nature Answer: any