Ethics, Economics, and Sustainable Development Chapter 6

Culture, Worldview, and the Environment Culture vs. Worldview: Culture - combined knowledge, beliefs, values, and shared way of life of a group of people Worldview – beliefs of a person or group about the meaning and workings of the world Two individuals from same culture can study same environmental problem and come to two different conclusions based on worldview

Environmental Ethics Ethics: Ethics and economics deal with what we value Ethics – study of good and bad, right and wrong also refers to the morals or values of a person or society Relativists believe ethics do and should vary with social context Universalists believe objective concepts of right and wrong hold across cultures and context

Ethics and Economics: Ethical standards – criteria that help distinguish between right and wrong Categorical imperative – the Golden Rule Principle of Utility – right is most benefits reach most people Value is held in two ways Utilitarian - valuable because it’s useful Intrinsic - valuable in itself Common for both types of value to be present at same time

Environmental ethics - application of ethical standards to environmental questions Involves issues of sustainability, environmental justice, intrinsic values between humans and non-humans Ethical views Anthropocentric – belief that only humans have intrinsic value Biocentrism – belief that some non-human life has intrinsic value Ecocentrism – belief that whole ecological systems have intrinsic value

Preservation ethic – natural systems should be preserved intact, intrinsic value John Muir – founder of Sierra Club, promoted preservation of wilderness Conservation ethic – advocates wise use of natural resources, utilitarian value Gifford Pinchot – 1st Chief of US Forest Service, clashed with Muir over damming Hetch Hetchy Valley Land ethic – maintains that humans and “the land” are part of the same community Aldo Leopold – author, his work inspired modern environmental movement

Environmental Justice: Environmental justice - fair and equitable treatment of all people regarding environmental issues Minorities and the poor are: Less informed and have less power Exposed to more pollution and hazards Live in areas with greater environmental degradation

Is there a tradeoff between the economy and the environment? Most environmental and economic problems are linked Oikos is Greek for “household” and root word for economics and ecology Economic activities affect and often degrade the environment and ability to provide services Depletes natural resources, generates pollution

Environmental Implications and the Principles of Economics: Economics – study of how people use resources to satisfy demand for good and services Economy – social system that converts resources to good and services Goods are manufactured materials that are bought Services are work done for others as a form of business Subsistence economy – economy where people meet their daily needs gathering from nature or what they can produce on their own

Capitalist market economy - economy where buyers and sellers determine prices, production, and distribution of goods and services Centrally planned economy - economy where government decides how to distribute resources Mixed economy – economy where governments intervene to some extent, most national economies are mixed

Classical Economics – pursuit of economic self-interest within competitive markets Supply the amount offered at a given price for goods and services Demand the amount people will buy at a given price for goods and services Developed by Adam Smith Neoclassical Economics (NE) – combines consumer preference, supply and demand, costs and benefits Market systems today operate on this model

Cost-benefit analysis – costs of proposed action are compared to benefits resulting from the action Major problem with approach is monetary benefits are easier to calculate than environmental benefits Models of NE involve several assumptions having negative environmental implications

NE treats resources as infinite or as substitutable Earth is finite so are resources NE assumes that benefits and costs are internal (experienced by the seller and buyer) External costs – cost incurred to those not involved in the transaction NE assumes events in the future count less than present Discounting – short terms benefits and costs and more important than long term

Economics growth and “Limits to Growth”: NE assumes that growth is good and will continue Economic growth – an increase in an economy’s production and consumption of goods and services Growth allows for poor to become wealthier, but economic activity is not the same as true wealth Affluenza – more material things does not equal happiness Growth comes from increased inputs (labor, resources) and economic development Economic development – improved efficiency of production (technology, equipment, ideas) More goods produced with fewer resources

Cornucopians – belief that human ingenuity and improved technology will allow continued economic growth Cassandras – belief that Earth’s natural capital is finite, so continuous growth is not sustainable

Environmental Economics and Sustainability: Environmental economics – belief that we must reduce our demand for resources and make their use more efficient to achieve sustainable growth Calls for NE reform Addresses external costs and discounting Steady-state economies – economies that mirror natural ecological systems, they neither grow nor shrink Nonmarket values – values not included in the price of a good or service (e.g., ecological, cultural, spiritual)

Measuring Meaningful Economic Growth and Progress: Gross Domestic Product (GDP) - the total monetary value of the goods and services produced by a nation GDP is a poor measure of economic well-being GDP doesn’t include non-market values GDP expresses all economic activity not just desirable activity Pollution, oil spills, disasters, etc. increase GDP

Genuine Progress Indicator (GPI) – alternative to GDP that distinguishes between desirable and undesirable economic activity GDP has risen significantly where as GPI has remained stagnant for past 30 years Positive contributions (e.g., volunteer work) not paid for with money are added to economic activity Negative impacts (crime, pollution) are subtracted

A 1997 study published in Nature, estimated the value of the world’s ecosystem services at more than 33 trillion (48 trillion in 2013 dollars) More than GDP of all nations combined Researchers calculated the global value of 17 major ecosystem services (water supply, recreation, raw materials, etc.)

Full cost accounting – accounting approach that attempts to monetize all costs and benefits Also called True Cost Accounting Examples include: Index of Sustainable Economic Welfare (ISEW) Net Economic Welfare (NEW) Human Development Index Gross National Happiness Happy Planet Index

Moving Our Ecosystem in a Sustainable Direction: Market failure – when markets ignore environment’s positive impacts or negative effects of activities on environment or people Ecolabeling – labeling products so consumers know how products were grown, harvested, or manufactured Increases awareness, provides incentives for businesses to move toward sustainable practices Socially responsible investing – investing in companies meeting criteria for environmental or social sustainability Greenwashing – when companies misled consumers into thinking they are more sustainable than they are

Sustainable Development is a Growing Global Movement: Sustainable development – using resources to meet current needs without risking future availability Development – using natural resources for economic advancement Triple bottom line - sustainable solutions that meet goals of: Protecting the environment Economic advancement Social equity

Millennium Development Goals - the United Nations established broad goals for global development: End extreme poverty/hunger Establish universal primary education Promote gender equality and empower women Reduce child mortality Improve maternal health Combat HIV/AIDS, malaria, and other diseases Ensure environmental sustainability Develop a global partnership for development