Environmental Law and Economics

Development of the Environmental Movement Frontier Attitude: set out and settle the land as quickly as possible – thoughts of conservation were not prevalent due to the seemingly unending supply of natural resources First Voices of Conservation: John James Audubon: wildlife paintings – stirred public interest in nature Henry David Thoreau: published poetry concerning nature

Environmental Laws and Significant Dates 1872: Establishment of first national park (Yellowstone)

1891: General Revision Act: gave the president the authority to establish forest reserves on federally owned land - Politics: loggers didn’t like this – pushed through a law in 1907 that rescinded the president’s power to preserve lands – prior to signing the bill and T. Roosevelt placed an additional 6.5 million hectares of forest under protection

Environmental Laws and Significant Dates 1906: Antiquities Act: gave presidential power to establish national monument sites which had scientific, historic or pre-historic importance – originally managed by the US Army but now under the management of the National Park Service (created in 1916)

Environmental Laws and Significant Dates 1913: Conclusion of a battle over the building of a dam in Hetch Hetchy Valley to provide water for San Francisco – valley is part of Yosemite National park – dam was built but this led to the development of the National Park Service

Environmental Laws and Significant Dates 1916: Establishment of the National Park Service for the management of the national parks and monuments for the enjoyment of the public “without impairment”. This phrase gave protection to the national parks so that development could not take place in them.

Development of the Conservation Movement Franklin Roosevelt and the Civilian Conservation Corps (CCC) – FDR established the CCC with a dual purpose – provided work for men in the depression and allowed for the protection of natural resources through the planting of trees, construction of paths and roads in the national parks and dams to control flooding FDR also formed the Soil Conservation Service in response to the Dust Bowl of the 1930’s - establishment of government control protection services

Development of the Conservation Movement Influential Authors: Rachel Carson: Silent Spring - book about pollution, DDT, raised awareness about the impact of human activities on the environment

Development of the Conservation Movement Birth of Environmentalism: Earth Day, 1970 - Earth day was celebrated by the planting of trees, cleaning roadsides and riverbanks and marching in parades

Increased Environmental Regulation 1970: Establishment of the Environmental Protection Agency (EPA) – due to a huge oil spill in 1969 off the coast of California Signing of National Environmental Policy Act (NEPA) - established that the federal government must consider the environmental impact of any proposed federal action Ex: building highway or dam - calls for a detailed Environmental Impact Statement (EIS) – must be carried out to provided impact information for the development of any legislative action

Steps Of EIS Scoping Purpose and Need Alternatives Development/ Evaluation/Refinement Environmental Impact Analysis Draft EIS Public Hearings Public Review Period Final EIS Record of Decision (ROD)

Advantages to NEPA little can be done without an EIS first revolutionized environmental protection oversees federal highway construction flood and erosion control, military projects nearly one-third of the land in the US including lands that contain extensive fossil fuel, mineral reserves, public grazing land and public forests politically sticky – economic clashes little can be done without an EIS first influenced state legislation and international policy as well

Critics of NEPA From the Environmentalists: EIS are incomplete or ignored Others: EIS delay important projects

Important Environmental Laws NEPA – National Environmental Policy Act ESA – Endangered Species Act Protects endangered and threatened species and their “home range” RCRA – Resource Conservation and Recovery Act – makes the producers of toxic waste responsible for them from “cradle to grave”

CERCLA – Comprehensive Environmental Response, Compensation and Liability Act – enacted a tax on petroleum industries to build a “Superfund” of money for the clean up and prosecution for large toxic waste dumps – these sites are known as Superfund Sites

FIFRA – Federal Insecticide, Fungicide and Rodenticide Act – created regulations for controlling the application of pesticides EX: Requires a license for a person to spray pesticides.

CAA – Clean Air Act – regulates emissions from industry and vehicles CWA – Clean Water Act – regulates the waste water that enters bodies of water SDWA – Safe Drinking Water Act – regulates the chemical content of drinking water – does not apply to ground water

Accomplishments of Environmental Legislation - establishment of 8 national parks - reduction of soil erosion - protection and recovery of endangered species - lowering of 6 important air pollutants less toxic waste released into water - cleaner drinking water - less sulfate for the generation of acid deposition - clean-up of over half of the Superfund sites (super polluted areas) cleaner streams and rivers

Economics and the Environment Economics: The social science that deals with the production, distribution, and consumption of goods and services and with the theory and management of economies or economic systems. (from dictionary.com)

Economics and the Environment Basic Principle in a Free Market: Supply and Demand - if something is in high demand and the supply is low, cost will be higher - subsequently, manufacturers and producers will want to make more of it as long as the profit is not outweighed by the production cost

Economics and the Environment - ties into environmental sciences because all products come from somewhere EX: Pen – plastic is made from oil - metal for the tip - ink - packaging: plastic, paper and ink - environment provides a natural capital for production of goods, the resources needed for production – a.k.a environmental services Overuse of natural capital results in “resource degradation” and pollution

Cost and Benefit of Pollution Control - it is easier to produce without regards to the environment - making manufacturing choices based on profits alone will lead to pollution and degradation of the environment – Ex: Russia clean up and prevention of pollution both cost money, thus these should be calculated into a nation’s economy – if they are calculated in then policy decisions will be affected – if they are not calculated in, the type of market generated will be one that generates more pollution and degrades the environment However, the flip side, a market that is solely based on environmental protection will not be competitive or viable.

Measuring Pollution Impact - Difficulty due to: A. Effects of pollution may be wide spread and difficult to determine Ex: Acid deposition covers a wide area and the total effect is hard to calculate

B. The total effect of the pollution may not be seen B. The total effect of the pollution may not be seen. While a pollutant may directly affect one species and not directly affect others, the effect on the susceptible species may have detrimental effects on other species due to their interactions. Since interactions are complex, the total effect of a pollutant on an ecosystem may not be seen for many years.

C. Aesthetics: how much value is the beauty that is lost due to pollution? Birds, flowers, landscapes, rainbows and unicorns – while an important argument, this is not quantifiable and therefore it cannot be considered in a scientific evaluation

Balancing Pollution and Economics Measuring the cost of pollution vs. the cost of pollution amendment: - both of these are measure as a marginal cost – the additional cost that comes from the production of a product – it is not in the direct manufacture, but is a cost that results from the manufacturing process EX: production generates pollution – the pollution must be cleaned up – this costs money

Cost of Pollution Cost of cleaning up your mess– Page 34, Fig 2.11 - tends to increase as production increases - cost may increase more quickly than the pollution rate due to a higher negative response to the same increase in pollution EX: two organisms – neither is sensitive to a pollutant from 0 – 50 ppm. Organism A is sensitive to the pollutant at 60 ppm and Organism B is sensitive to the pollutant at 70 ppm. Cost of cleaning the pollutant from 0 – 50 ppm is minimal, higher at 60, and even higher at 70 although the difference in levels is only 10 ppm rather than 50. pH – most organism have a pH range between 6 – 8. Some organisms are more sensitive to pH changes while others are not. Increasing the pH of a lake from 6.5 to 8.0 may kill a few species, but an increase from 8.0 to 8.5 may have a devastating impact because the result is cumulative.

Cost of Pollution Abatement Cost of pollution prevention – Page 35, Fig 2.12 -tends to increase as pollution abatement increases – the cleaner process, usually costs more money and is less productive – not only does it cost more to produce the product, less product is made making the product more expensive - also making things cleaner and cleaner takes more and more effort EX: car emissions: to reduce emissions by half is not difficult but to reduce that by another half (total of 75 %, an increase of 25%) will cost more - the first 50% is cheaper than the second 25%

Comparing Cost of Pollution and the Cost of Pollution Abatement Cost-Benefit Diagram When the graphs for the two Costs are Plotted the point of intersection is called the Optimal Level of Pollution – where the economic feasibility of production (it is still worth making) and the cost of pollution cleanup and prevention meet - excess pollution abatement will cause costs to go up and decline economic value excess economic value will cause pollution levels to rise and cause environmental decline Weaknesses of the Cost-Benefit Diagram: - not all impacts of the pollution can be determined – hidden costs

Optimal Level of Pollution Cost of Pollution Controls or Clean-Up Benefits gained from Pollution Controls or Clean-Up

Economic Strategies for Pollution Control Command and Control Regulations: laws that state how much of a pollutant that can be produced – overproduction results in fines

Economic Strategies for Pollution Control Incentive-based Regulation: laws that set goals for industry to meet – when the goals are met the industry is rewarded Types of Incentive Based Regulation: 1. Emission Charge – for each amount of measured pollutant, the polluter is charged a certain fee – the cleaner/less pollution results in less cost – these are essentially taxes for pollution Ex: Tax Gasoline – may result in more car pooling, people buying more fuel efficient cars

Economic Strategies for Pollution Control 2. Marketable Waste-Discharge Permits – holder of the permit is allowed to generate a certain amount of a given pollutant – for each amount of pollutant generated they can buy or sell permits call Emission Reduction Credits (ERC’s) – industries that are cleaner will have extra ERC’s and can sell them to heavier polluters who will have used up their given quantity of ERC’s – if the industry does not have enough ERC’s they are given a hefty fine – industry’s must balance whether it is more economically viable to be cleaner and sell extra credits or to pollute and have to buy them. – the incentive is to be clean and make money from it

The Impact of Worldview, Ethics and Value Worldview – perception of how the world operates – view of humans as they relate to the environment, the value of human life, other life and the environment – what is good? What is bad? Why is it good or bad? What should be done to the bad? What does it mean to be responsible? An individual’s worldview impacts how he or she operates in the world, it is the basis of intellectual, moral, religious and ethical belief. Also includes the environment and how humans fit into it.