Environmental Policy

Population and The Environment A significant concern for policymakers is the rapidly growing world population population= 1 billion 1900 population= 1.6 billion 1950 population= 2.6 billion 1995 population= 5.7 billion 2000 population= 5.9 billion 2007 population= 6.6 billion 2015 population= 7.2 billion

Many of the consequences of overpopulation are deforestation, malnutrition and starvation as well as a substantial increase in human and industrial waste Where population is growing most rapidly, we often find the poorest of people Population control policies can conflict with political and religious attitudes and beliefs

Economic development programs to reduce poverty must take into account the necessity of environmental protection; but usually these goals are antithetical To reduce poverty, per capita income must be raised, however there is no realistic way poor countries can achieve economic development unless their population growth rates are significantly lowered

What is the answer? Sustainable development What is sustainable development? Sustainable development is a socio- ecological process characterized by the fulfillment of human needs while maintaining the quality of the natural environment indefinitely

Related to the economic/business concept of sustainable growth: the idea that from time to time, businesses may run into trouble unless they control their growth. Growth can be orderly or it can be unrestrained. Unrestrained growth can lead to less than optimal performance or even financial distress

Why is this important? Short sighted, self-interested behavior can have long term (and not so long term) consequences. Fore example: Water! "The Southern Nevada water crisis could go critical during the next few years, requiring extreme water use restrictions and possibly building moratoria"

Environmental issues are related to economic issues "Creating places people want to be, not places people want to flee." Chicago Alderman Mary Ann Smith Green Cities: Some cities are taking the lead: Philadelphia, Seattle, Boston, San Diego – city officials agree that green urban setting are a critical draw in an era when highly educated, mobile professional workers-the economic gold of the times-gravitate to attractive, welcoming, and healthy places.

Air Quality: Seattle/King County initiatives run all the way from partnering with General Motors on development of the country’s first and largest hybrid diesel bus fleet to increase portions of biodiesel in vehicle fleets, from the nation’s largest hydrogen fuel-cell project. Smart Development: Moving away from pods of development-residential, office, and retail. Instead compact, mixed use, energy- efficient development.

Benefits? Tree-lined streets alone increase property values some 15% Benefits? The idea is that with less auto dependency and easier access to public transportation and jobs, low-income families will have to spend much less on transportation than they now do (on average, 40 cents of every dollar of income at the poverty line) Benefits?: Healthy Communities, Healthy People Benefits?: Less traffic, more time for work (or leisure). Increasing productivity (or consumption).

The Environment and Political Economy How does this all relate to the political economy approach? Kraft: “Politics is about the collective choices we make as a society”

How political economists think: –They think incentives matter –They think about trade offs –They think in the aggregate –They believe non-decisions are important –They believe in the power of markets –They believe that people are selfish and that is not always bad

Incentives and Constraints What type of policies would influence the incentives faced by consumers & producers? What type of policies would influence the constraints faced by consumers & producers?

Example: Fuel Efficient Cars It will be the market that produces fuel efficient cars, not the government But the market will not produce them because it loves the environment Producers will make them if there is a profit for them Consumers will buy them if the cost is competitive.

What type of policies? Incentives –Gas taxes, taxes on cars –Tax rebates –Research grants Constraints –Regulations –Enforcement –Product bans