Economics, Population, and the Environment

What is economics? The study of the manner in which people use their limited resources to satisfy their needs and wants. Natural Capital – all of the earth’s resources and processes that sustain living organisms (including humans): minerals, forests, soils, groundwater, clean air, wildlife, fisheries, etc. Natural Capital includes both sources and sinks.

Natural Capital Source – a part of the natural environment from which materials move. Resource Degradation occurs when sources are overused Sink – a part of the environment that receives an input of materials Pollution is the overuse of sinks

Population Developed countries: 20% of the world’s population with 80 % of the world’s wealth Developing countries: 80 % of the world’s population and 20 % of the world’s wealth Different populations present different problems.

Sustainability Remember : Increasing population AND increasing consumption place demands on the environment. Sustainability can be achieved by: Stabilizing population Decreasing consumption Increasing stewardship of the environment

The Effects of Population Growth on The Environment Prior to the industrial revolution, societies were mainly based on subsistence agriculture. Cultures have sustained themselves in this manner for thousands of years. Decreasing mortality rates have caused the populations in developing countries to skyrocket.

The Effects of Population Growth on The Environment What alternatives are available for a rapidly growing population based on subsistence agriculture? Subdividing farms and intensifying cultivation Opening up new lands for agriculture Migration to cities Illicit activities Emigration and immigration All have negative environmental and social consequences

Effects of Increasing Affluence on the Environment Positive Effects Safe drinking water Sewer treatment Disposal of refuse Conservation and management Better agricultural practices Pollution control Negative Effects Large consumption of fossil fuels Production and release of toxic chemicals Nuclear waste Sources and sinks are in distant locations, so affluent societies often do not see the immediate effects of their activities to the environment

Economics & the Environment Economics & environmental issues are always inter-related. With any environmental issue, there is always cost involved that affects any potential solution Examples of Environmental costs include: Air pollution Water pollution Plant and animal extinctions Depletion of resources Loss of scenic quality

Types of Environmental Costs Many environmental costs are not recognized immediately. These costs are referred to as deferred costs. Example: Dams built on the Colorado River for irrigation and to provide electric power

Types of Environmental Costs External Costs are costs incurred by someone other than the person or organization that used a resource. Logging operations Hazardous waste sites Mining

Types of Environmental Costs

Types of Environmental Costs Many environmental costs have both deferred costs and external costs

Types of Environmental Costs Environmental costs may include lost opportunities or values.

Types of Environmental Costs Pollution Costs Costs to correct pollution damage Health costs Loss of the use of public resources Pollution Prevention Costs Sewage treatment Air emission controls in industry Water emission controls in industry

Tragedy of the Commons “The tragedy of the commons” - essay written by Garrett Hardin in 1969 Uses example of pastureland in England Provided free by the king to anyone who wished to graze cattle As long as the number of animals is small in relation to the size of the pasture, there is no probem Each herder, tries to increase his herd. Eventually, everyone loses as the commons becomes overgrazed This principle can be applied to much of the earth’s resources which have shared public ownership.