Chapter 2 Environmental Laws, Economics and Ethics

Overview of Chapter 2 Brief US Environmental History US Environmental Legislation Economics and the Environment Environmental Problems in Central and Eastern Europe Environmental Ethics, Values and Worldviews

Economics and the Environment Economics- study of how people use limited resources to satisfy unlimited wants Analytical tools include models Economy Production Consumption Products Money Source Raw Materials Sinks Waste

Precepts to Study Economics Economics is utilitarian Goods and services have value that can be converted to currency Rational Actor Model Assumes all individuals spend limited resources to maximize individual utilities Ideal economy Resources are allocated efficiently

Economics and Environmental Issues Environmental problems arise when market failures occur in one of several ways Externalities- the effect of a firm that does not have to pay all the costs associated with its production Solution- define rights and ownership

Optimum Level of Pollution Solution for multiple polluters Optimum amount of pollution = most economically desirable Cost to society of having less pollution is offset by benefits to society of activity creating pollution Must identify Marginal Cost of Pollution- Cost of small additional amount of pollution Marginal Cost of Abatement- Cost of reducing small amount of pollution

Economic Optimum Level of Pollution Marginal cost of pollution - cost of small additional amount of pollution

Economic Optimum Level of Pollution Marginal cost of pollution abatement - cost of reducing small amount of pollution

Economic Optimum Level of Pollution Let’s put the graphs together… Cost-Benefit Analysis Pollution is at an optimal level when marginal costs and abetment are equal- the economic system is efficient

Private vs Social Cost of Pollution Reality - Less than optimum Private cost Social cost In unregulated economic markets- those pollute often face only a fraction of the total costs of pollution

Strategies for Pollution Control Economic strategies for pollution control (3 options): Command and Control (Democrats) Incentive- based regulation (Republicans) “Green” Taxes Tradable Permits Think of the carbon regulation lab we did!

Strategies for Pollution Control Command and Control Solutions Government agency requires limitations to emissions or pollutants Discourages development of low-cost alternatives Economists dislike this

Strategies for Pollution Control Environmental Taxes and Tradable Permits What are they? If taxes are set at correct level private marginal cost of pollution = social cost of pollution Economists like this

Critiques of Environmental Economics Difficult to assess true costs of environmental pollution and abatement Impacts of pollution on people and nature is uncertain Ecosystem services have no known value Utilitarian economics may not be appropriate Dynamic changes and time are not considered Based only on monetary value – what is monetary value of clean earth?

National Income Accounts Estimates of National Economic Performance and used in Politics includes: Gross Domestic Product (GDP) Net Domestic Product (NDP) These can be misleading and incomplete Do not take into account environmental factors

National Income Accounts NDP = GDP - depreciation / capital expenses BUT, consuming nonrsenewable natural resources typically NOT accounted

National Income Accounts NDP = GDP - depreciation / capital expenses In addition, degradation of natural resources by pollution also typically NOT accounted External costs rarely considered

Natural Capital Problems involve costs and benefits of pollution control and depletion of natural capital Natural capital- all of earth’s resources and processes that sustain living organisms, including humans

National Income Accounts Remember : NDP = GDP – used up capital When natural resources are used, these are not accounted for in the NDP If it is cheaper to pollute (higher GDP), companies will Environment may be overexploited to yield a higher GDP in developing countries Solutions: Replace GDP and NDP with a more comprehensive measure of national income accounting that includes estimates of both natural resource depletion and environmental costs of economic activities EPI (Environmental Performance Index) Assesses a country’s commitment to environmental and resource management

Case Study- Environmental Problems in Eastern Europe Fall of Communist governments revealed large environmental destruction Problems: Soil and water poisoned Unidentified leaks in dumping sites Industry with air pollutants causing acid rain Human effects… Children with chronic asthma, bronchitis, and heart problems

Case Study- Environmental Problems in Eastern Europe Meeting industrial quotas took precedence over environmental concerns Switch from communism to market economies- need to improve environment Will take decades to clean up polluting economics of communism Success varies by country Romania- EPI = 90th Czech Republic- EPI = 4th

Environmental Ethics What are ethics? What are values? Field of ethics that considers the moral basis of environmental responsibility Environmental worldviews- many and varied; 2 extremes: Western Worldview Human superiority and dominance over nature Deep Ecology Worldview Principles (record these or reference your textbook) All species have an equal worth to humans Most people’s ethics fall somewhere in between

All Done with Notes!!! We are going to stop here… the beginning part of the chapter (pp 24-33) is your responsibility to learn. As a class we will be creating an environmental timeline from the 1600’s till today. You will be assigned a period of time to research and present to your classmates. You may use the following slides as a reference, but you will need to do more research.

Environmental History of the US 1600 1700 1800 1900 Dominated by Frontier Attitude Establishment of Jamestown, VA 1600s - early 1800s = Frontier Attitude Natural Resources (land, timber soil, water) seemed inexhaustible Widespread Environmental Destruction

Environmental History of US 1750 1800 1850 1900 John James Audobon (1785-1851) Henry David Thoreau (1817-1862) George Perkins Marsh (1801-1882) 19th century- US Naturalists voiced concerns about natural resources Audobon- painting increased interest in environment Thoreau- naturalist author on simplifying life Marsh- wrote Man and Nature

Environmental History of US 1875 1900 1850 1875 American Forestry Assoc. Formed 1890 Yosemite and Sequoia National Parks Established 1891 General Revision Act General Revision Act Gave President Authority to establish forest reserves Presidents Harrison, Cleveland, Roosevelt put 17.4 million hectares into reserve Roosevelt reserved additional 6.5 million hectares before signing bill preventing further forest reservation

Environmental History of US Utilitarian Conservationist Roosevelt Value natural resources for their usefulness Biocentric Preservationist John Muir (founded Sierra Club) Fought for National Parks Protect nature because all life deserves respect

Environmental History of US 1925 1950 1900 1935 Creation of Soil Conservation Service 1906 Antiquities Act 1916 National Park Service Created Antiquities Act Allows president to set aside sites of scientific or historical importance (monuments) American Dust Bowl (1930s droughts) Basis for Soil Conservation Service Created by Franklin Roosevelt

Environmental History of US 1900 1925 1950 1975 Aldo Leopold (1886-1948) Wallace Stegner (1909-1993) Rachel Carson (1907-1964) 20th Century Naturalists Leopold- Author (A Sand Country Almanac) Stegner- Author (“Wilderness Essay”) Carson- Author (Silent Spring) Heightened awareness of DDT and pesticides

US Environmental Legislation Environmental Protection Agency Est. 1970 National Environmental Policy Act (NEPA) Cornerstone of Environmental Law Requires Environmental Impact Statements (EIS) for any proposed federal action Ex: highway or dam construction EIS must answer many questions (next slide) Revolutionized environmental protection in US

Environmental Impact Statements

US Environmental Legislation Numerous laws passed since 1970 They address: Clean water Clean air Energy conservation Hazardous waste Pesticides Federal regulation of pollution

Effects of Environmental Legislation (According to EPA’s Draft Report on the Environment 2003) Since 1970, 6 air pollutants have dropped by 25% Since 1990 wet sulfate levels decreased 20-30% In 2002 94% of US had healthy drinking water (up from 79% in 1993) As of 2002 846 of 1498 Superfund Sites are cleaned up Fewer streams violate water standards