Economics, Politics and the Environment

Economic Systems Vary, But All Depend on Natural Capital Goods and services Economic system Social institution Free-market system Supply and demand Natural capital Resources provided by the earth’s natural processes Human capital People’s physical and mental talents Manufactured capital Tools and materials

Cost-Benefit Analysis Is a Useful but Crude Tool Cost-benefit analysis follows guidelines State all assumptions used Include estimates of the ecological services Estimate short-and long-term benefits and costs Compare the costs and benefits of alternative courses of action There are always uncertainties

We Can Apply the Principle of Full-Cost Pricing Market price Does not include indirect, external, or hidden costs For example: What are the direct and indirect costs of a car? Full-cost pricing Includes estimated costs of harmful environmental and health effects of production

Environmental Economic Indicators Could Help Reduce Our Environmental Impact Measurement and comparison of the economic output of nations Gross domestic product (GDP) Per capita GDP Newer methods of comparison Genuine progress indicator (GPI) GDP plus estimated value of beneficial transactions

Government Can Serve Environmental and Other Public Interests Environmental policy Policy life cycle – four stages Recognition Formulation Implementation Control There needs to be a balance between government intervention and free enterprise Government is the best mechanism to deal with: Full-cost pricing Market failures The tragedy of the commons Policies Set of laws and regulations

Democracy Does Not Always Allow for Quick Solutions Special-interest groups pressure the government Profit-making organizations Nongovernmental organizations (NGOs) Politicians focus on problems with short- term effects Democracy United States is a constitutional democracy Three branches of government Legislative Executive Judicial

How Democratic Government Works: The U.S. Model Three branches Legislative branch Executive branch Judicial branch Develop and implement policy Laws, regulation, and funding Lobbying

Developing Environmental Policy Is a Controversial Process Funding needed Regulations and rules needed to implement the law Environmental regulatory agencies play an important role Regulated businesses try to have their members appointed to regulatory agency Individuals matter 2007 – Chinese citizens opposed construction of a chemical plant Mobile phone text messaging spread the word At a fundamental level, all politics is local

Environmental Law Forms the Basis for Environmental Policy Body of laws and treaties that broadly define what is acceptable environmental behavior Most environmental lawsuits are civil suits Injunction – court hearing Class action suit – civil suit filed by group Negligence – damage caused by deliberately acting unreasonably

Environmental Lawsuits Are Difficult to Win Legal standing Has the plaintiff suffered health or financial problems? Very expensive Public interest law firms Cannot recover attorney’s fees Plaintiffs must establish that harm has been done Statutes of limitation Limit length of time a plaintiff can sue Appeals – years to settle Strategic lawsuits against public participation (SLAPPs)

Case Study: U.S. Environmental Laws Types of legislation Set standards for pollution levels Screen new substances for safety Encourage resource conservation Protect spaces and ecosystems Require evaluation of activity proposed by federal agency Environmental impact statement Have been highly effective Especially in pollution control Since 1980, well- organized forces against existing environmental laws Environmentalist s primarily bring bad news to the public

Citizen Environmental Groups Play Important Roles Nonprofit nongovernmental organizations (NGOs) working at all levels International, national, state, and local Small grassroots groups to world-wide organizations Global public policy networks Focus on particular environmental problems Shifting resources to publicizing innovation

Case Study: The Natural Resources Defense Council NRDC Goes to court to stop environmentally harmful practices Informs and organizes millions of environmental activists to take actions to protect the environment Website, magazines, and newspapers BioGems Network Informs subscribers of environmental threats 2005 – blocked the EPA from finalizing “blending” proposal for untreated sewage 2001 – protect vast area of Great Bear Rainforest from logging

Grassroots Environmental Groups Bring about Change from the Bottom Up Global sustainability movement Citizen-based Conservation land trusts Property owners agree to protect land from development and harmful activities Nonviolent, nondestructive tactics

We Can Develop Stronger International Environmental Policies United Nations – most influential Family of global policy-making organizations Other influential groups The World Bank, etc. U.N. Conference of Environment and Development – Agenda 21 Rio+20 Earth Summit Conference in 2012

Corporations Can Play a Key Role in Environmental Sustainability Corporations have the profits to provide funding Eco-efficiency Finding ways to create economic value with less harmful impacts Nature Conservancy program Help companies include monetary value of natural capital in goals and strategies