Do Now…  Compare and contrast microloans and traditional bank loans, and explain why microloans may be more effective at helping people in poverty than traditional loans.

Economics, Environment, and Sustainability September 12, 2014

Objectives  We will practice a 22.5 minute free response question and will peer edit/review.  We will learn how economic systems are related to the biosphere.  We will evaluate how we can put values on natural capital.  We will evaluate how we can control pollution and resource use through economics.

Product  I will articulate my insights about economic growth by explaining whether we should maximize economic growth by producing and consuming more and more economic goods and services and, if not, what the alternatives could be.

Free Response Friday (#1)  Clam Population Problem and Experimental Design

How are economic systems related to the biosphere? Ecological economists and most sustainability experts regard human economic systems as subsystems of the biosphere.

Fig. 23-2, p. 615 Economic Systems

Fig. 23-3, p. 615 Supply, Demand, and Market Equilibrium

Shifts on the Curve

True Free-Market System 1. No company or small group of companies would control the prices of any goods or services. 2. The market prices of goods and services would include all of their direct and indirect costs (full-cost pricing) 3. Consumers would be provided with full information about the beneficial and harmful environmental effects of the goods and services available to them.

But that really doesn’t happen…  Most businesses try to take business away from their competitors.  Most try to exert as much control over prices of G/S they provide.  Push for government subsidies, tax breaks, tax barriers, regulations in order to gain an advantage  Withholding of information from consumers

So what is there to do?  Environmentally sustainable economic development  Use political and economic systems to encourage environmentally beneficial and more sustainable forms of economic development and to discourage environmentally harmful and unsustainable forms of economic growth.  Government intervention  Use tools such as regulations, taxes, subsidies, and tax breaks to attempt to include the value of natural capital in market prices  Some attempts and regulations for open-access resources (clean air, open ocean, controlling air/water pollution)

DISCUSS  In a pure free-market economy, the government plays no role, and some economists see this as the best possible economic system. Explain why you agree or disagree with their position.