Environmental Economics, Politics, and Worldviews Chapter 2

Key Concepts Neoclassical and ecological economics Monitoring environmental progress Full-cost pricing Poverty and lower environmental quality Shifting to environmentally sustainable economies US environmental policies Guidelines for environmental policies Environmental worldviews Living sustainably

Biosphere 2: A Lesson in Humility Purpose Located near Tucson, Arizona, USA Unexpected consequences Effects from the outside Lessons learned Fig. 18-1, p. 412

Biosphere 2: A Lesson in Humility Fig. 18-1, p. 412

Economics and Economic Resources What is economics? Market-based economic system Markets Natural resources (natural capital) Human resources (human capital) Manufactured resources (manufactured capital)

Manufactured Resources Types of Resources + + = Natural Resources Manufactured Resources Human Resources Goods and Services Fig. 18-2, p. 414

Types of Economists Neoclassical economists Ecological economists Environmental economists Environmentally sustainable economy (eco-economy) Suggestions for transitioning to an eco-economy

Ecological Economics Fig. 18-3, p. 414 Sun EARTH Economic Systems Heat Depletion of nonrenewable resources Natural Capital Production Air; water, land, soil, biodiversity, minerals, raw materials, energy resources, and dilution, de-gradation, and recycling services Degradation and depletion of renewable resources used faster than replenished Consumption Pollution and waste from overloading nature’s waste disposal and recycling systems Recycling and reuse Fig. 18-3, p. 414

Unsustainable Economic Growth and Sustainable Economic Development ©2006 Brooks/Cole - Thomson Characteristic Unsustainable Economic Growth Environmentally Sustainable Economic Development Production emphasis Natural resources Resource productivity Resource throughput Resource type emphasized Resource fate Pollution control Guiding principles Quantity Not very important Inefficient (high waste) High Nonrenewable Matter discarded Cleanup (output reduction) Risk–benefit analysis Quality Very important Efficient (low waste) Low Renewable Matter recycled, reused, or composted Prevention (input reduction) Prevention and precaution Fig. 18-4, p. 415

Components of Sustainable Economic Development Production of energy-efficient fuel-cell cars Underground CO2 storage using abandoned oil wells Forest conservation High-speed trains No-till cultivation Deep-sea CO2 storage Solar-cell fields Bicycling Wind farms Communities of passive solar homes Cluster housing development Recycling plant Landfill Water conservation Recycling, reuse, and composting Fig. 18-5, p. 416

Environmental and Economic Indicators Gross domestic product (GDP) Per capita GDP Limits of economic indicators Genuine progress indicator (GPI)

Per Capita GDP vs. Per Capita GPI for the US (1950-2002) 35,000 30,000 25,000 20,000 1996 Dollars per person Per capita gross domestic product (GDP) 15,000 10,000 5,000 Per capita genuine progress indicator (GPI) 1950 1960 1970 1980 1990 2000 Year Fig. 18-6, p. 417

Economics and Environmental Quality Internal costs External costs Full-cost pricing Government subsidies and tax breaks Green taxes and fees Tax shifting Environmental tax reform

Tradeoffs of Green Taxes and Fees Environmental Taxes and Fees Advantages Disadvantages Helps bring about full-cost pricing Provides incentive for businesses to do better to save money Can change behavior of polluters and consumers if taxes and fees are set at a high enough level Easily administered by existing tax agencies Fairly easy to detect cheaters Penalizes low-income groups unless safety nets are provided Hard to determine optimum level for taxes and fees Need to frequently readjust levels, which is technically and politically difficult Governments may see this as a way of increasing general revenue instead of using funds to improve environmental quality and reduce taxes on income, payroll, and profits Fig. 18-7, p. 418

Advantages of Less Taxing of Wages and Profits and More Taxing of Pollution and Waste © 2006 Brooks/Cole - Thomson Decreases depletion and degradation of natural resources Improves environmental quality by full-cost pricing Encourages pollution prevention and waste reduction Stimulates creativity in solving environmental problems to avoid paying pollution taxes and thereby increases profits Rewards recycling and reuse Relies more on marketplace rather than regulation for environmental protection Provides jobs Can stimulate sustainable economic development Allows cuts in income, payroll, and sales taxes Fig. 18-8, p. 419

Environmental Laws and Regulations Environmental regulations Innovation-friendly regulations Tradable pollution and resource-use permits Eco-labeling

Tradeoffs of Tradable Pollution Tradable Environmental Permits Advantages Disadvantages Flexible Easy to administer Encourages pollution prevention and waste reduction Can guarantee achievement of caps Permit prices determined by market transactions Confronts ethical problem of how much pollution or resource waste is acceptable Confronts problem of how permits should be fairly distributed Big polluters and resource wasters can buy their way out May not reduce pollution at dirtiest plants Can exclude small companies from buying permits Caps can be too low Caps must be gradually reduced to encourage innovation Determining caps is difficult Must decide who gets permits and why Administrative costs high with many participants Emissions and resource wastes must be monitored Self-monitoring can promote cheating Sets bad example by selling legal rights to pollute or waste resources Fig. 18-9, p. 420

Eco-labeling Programs in Various Countries Germany: Blue Angel (1978) Canada: Environmental Choice (1988) United States: Green Seal (1989) Nordic Council: White Swan (1989) European Union: Eco-label (1992) China: Environmental label (1993) Fig. 18-10, p. 420

Poverty What is poverty? World poverty and homelessness Environmental and human health impacts of poverty Neoclassical economists’ solutions (trickle-down effect) Wealth gap Upward flow of wealth Causes of poverty

Poverty and Homelessness Fig. 18-11, p. 421

Global Distribution of Income Richest fifth 85% Poorest fifth 1.3% Fig. 18-12, p. 421

Reducing Poverty Shifting national budgets Poor need land for agriculture Conditionally forgiving debts of developing countries Increasing aid directly to the poor in developing countries Global effort to eliminate malnutrition and infectious diseases Small loans to the poor Global Outlook, p. 423, Microloans for the Poor Investments in small-scale infrastructures Transitions to eco-economies

What Should be Our Priorities? © 2006 Brooks/Cole - Thomson Expenditures per year (2003) World military $956 billion U.S. military $449 billion U.S. highways $29 billion U.S. pet foods $12 billion U.S. EPA $8 billion U.S. foreign aid $8 billion U.S. cosmetics $8 billion Expenditures per year needed to eliminate hunger and malnutrition $19 billion provide clean drinking water for all $12 billion provide basic healthcare for all $11 billion protect tropical forests $8 billion eliminate illiteracy $5 billion Fig. 18-13, p. 422

Principles for Shifting to Eco-Economies Economics Environmentally Sustainable Economy (Eco-Economy) Resource Use and Pollution Reward (subsidize) earth- sustaining behavior Penalize (tax and do not subsidize) earth- degrading behavior Shift taxes from wages and profits to pollution and waste Use full-cost pricing Sell more services instead of more things Do not deplete natural capital Live off income from natural capital Reduce poverty Use environmental indicators to measure progress Certify sustainable practices and products Use eco-labels on products Reduce resource use and waste by refusing, reducing, reusing, and recycling Improve energy efficiency Rely more on renewable solar and geothermal energy Shift from a carbon based (fossil fuel) economy to a solar–hydrogen based economy Ecology and Population Mimic nature Preserve biodiversity Repair ecological damage Stabilize population by reducing fertility Fig. 18-14, p. 423

Factors Hindering the Ability of Democracies to Deal with Environmental Problems Politics Constitutional democracies Checks and balances between executive, judicial, and legislative Special-interest groups Profit-making organizations Nonprofit nongovernmental organizations (NGOs) Dealing with long-term environmental problems

Developing Environmental Policies What is environmental policy? Principles for making environmental policy decisions (list, p. 424) Individuals matter Bottom up (grassroots) change Environmental leadership Lead by example Work in the system “Vote with our wallets” Run for office Propose and work for better solutions

Democracy in Action Fig. 18-15, p. 425

Influencing Environmental Policy What Can You Do? © 2006 Brooks/Cole - Thomson What Can You Do? Influencing Environmental Policy Become informed on issues Run for office (especially at local level) Make your views known at public hearings Make your views known to elected representatives Contribute money and time to candidates for office Vote Form or join nongovernment organizations (NGOs) seeking change Support reform of election campaign financing Fig. 18-16, p. 425

Environmental Policy in the US Federal government and policy Laws US Environmental laws Funding Regulations Court appeals Politics in government agencies Lobbying “The revolving door” Policy life cycle

Enacting Environmental Legislation in the US Lobbyists Lobbyists Lawmaking body Public hearing Special interest groups Public advisory Regulating enforcement body Laws and regulations Legal action Legal action Lawyers Lawyers Environmental organizations Corporations and small businesses Laws and regulations Courts Membership support Boycotts Individual Purchase recyclable, recycled, and environmentally safe products Recycle cans, bottles, paper, and plastic Plant a garden Donate clothes and used goods to charities Use water, energy, and other resources efficiently Use mass transit, walk, ride a bike, or carpool Fig. 18-17, p. 426

Major US Environmental Laws Since 1969 National Environmental Policy Act (NEPA) 1969 1970 Clean Air Act 1971 Clean Water Act; Coastal Zone Management Act; Federal Insecticide, Fungicide, and Rodenticide Act; Marine Mammal Protection Act 1972 1973 Endangered Species Act 1974 Safe Drinking Water Act 1975 Resource Conservation and Recovery Act; Toxic Substances Control Act; National Forest Management Act 1976 Soil and Water Conservation Act; Clean Water Act; Clean Air Act Amendments 1977 1978 National Energy Act 1979 Fig. 18-18, p. 427

Major US Environmental Laws Since 1969 Superfund (CERCLA); National Energy Act Amendments; Coastal Zone Management Act Amendments 1980 1981 1982 Endangered Species Act Amendments 1983 Hazardous and Solid Waste Amendment Act (SARA); Safe Drinking Water Act Amendments 1984 1985 Endangered Species Act Amendments 1986 Superfund Amendments and Reauthorization 1987 Clean Water Act Amendments Federal Insecticide , Fungicide, and Rodenticide Act Amendments; Endangered Species Act Amendments 1988 1989 Fig. 18-18, p. 427

Major US Environmental Laws Since 1969 1991 1992 1993 1990 1994 1995 1996 Clean Air Act Amendments; Reauthorization of Superfund; Waste Reduction Act Energy Policy Act Endangered Species Act Amendments Safe Drinking Water Act Amendments Fig. 18-18, p. 427

Policy Life Cycle Fig. 18-19, p. 428 Recognition Identify the problem. © 2006 Brooks/Cole - Thomson Recognition Identify the problem. Formulation Look for solutions. Implementation Implement solutions. Control Things are improving. Nonpoint-source water pollution Indoor air pollution Reuse Mining wastes Groundwater contamination Environmentally harmful subsidies Market prices do not include environmentally harmful costs Integrated environmental management Global warming Urban sprawl Nuclear wastes Biodiversity protection Pollution prevention Toxic wastes Resource productivity Aquifer depletion Environmental justice Sustainable economic development Acid deposition Ozone depletion Municipal solid waste Protecting endangered species Pest control Soil erosion Outdoor air pollution Sewage treatment Drinking water treatment Point source water pollution Recycling Some infectious diseases Fig. 18-19, p. 428

Mainline and Grassroots Environmental Groups Nonprofit nongovernmental organizations (NGOs) Grassroots groups Lobbying efforts Working with industries to solve environmental problems Global sustainability movement Internet and “bottom up” changes Community action Environmental justice Protest marches and tree sitting Acts of violence

Environmental Action in the US Environmental awareness on campuses Environmental audits of campuses Green dormitories Accomplishments of environmental groups Polls of the US public Opposition to environmental groups Explaining unseen environmental problems to the public Developing environmentally sustainable political and economic systems Encouraging experiments in sustainability (Curitiba, Brazil) Looking for solutions

Fostering Cooperation on Environmental Issues Rather than Confrontation Recognize that business is not the enemy Emphasize pollution prevention Emphasize market place solutions rather than regulation Look for “win-win” solutions Don’t exaggerate Be responsible

Global Environmental Policy Military, economic, and environmental security International environmental organizations UN organizations World bank Global Environment Facility, World Conservation Union, etc. Roles of various organizations International cooperation

Global Environmental Efforts Trade-Offs Global Efforts on Environmental Problems Good News Bad News Environmental protection agencies in 115 nations Over 500 international environmental treaties and agreements UN Environment Programme (UNEP) created in 1972 to negotiate and monitor international environmental treaties 1992 Rio Earth Summit adopted key principles for dealing with global environmental problems 2002 Johannesburg Earth Summit attempted to implement policies and goals of 1992 Rio summit and find ways to reduce poverty Most international environmental treaties lack criteria for monitoring and evaluating their effectiveness 1992 Rio Earth Summit led to nonbinding agreements without enough funding to implement them By 2003 there was little improvement in the major environmental problems discussed at the 1992 Rio Earth Summit 2002 Johannesburg Earth Summit failed to provide adequate goals, deadlines, and funding for dealing with global environmental problems such as climate change, biodiversity loss, and poverty Fig. 18-20, p. 431

Environmental Worldviews What is an environmental worldview? Environmental ethics Views widely vary and often conflict Human-centered views: planetary management and stewardship Instrumental value Life-centered views: environmental wisdom Inherent or intrinsic value Ecocentric view

Environmental Worldviews © 2006 Brooks/Cole - Thomson Environmental Worldviews Planetary Management • As the planet’s most important species, we are in charge of the earth. • Because of our ingenuity and technology we will not run out of resources. • The potential for economic growth is essentially unlimited. • Our success depends on how well we manage the earth’s life-support systems mostly for our benefit Stewardship • We are the planet’s most important species but we have an ethical responsibility to care for the rest of nature. • We will probably not run out of resources, but they should not be wasted. • We should encourage environmentally beneficial forms of economic growth and discourage environmentally harmful forms. • Our success depends on how well we manage the earth’s life-support systems for our benefit and for the rest of nature Environmental Wisdom • Nature exists for all species and we are not in charge of the earth. • Resources are limited, should not be wasted, and are not all for us. • We should encourage earth- sustaining forms of economic growth and discourage earth degrading forms. • Our success depends on learning how the earth sustains itself and integrating such lessons from nature into the ways we think and act Fig. 18-21, p. 432

Environmental Wisdom Worldview Fig. 18-22, p. 433

Living More Sustainably Environmental literacy: key goals and basic comprehension (p. 433) Ecological identity Learning from the Earth Sense of place Living more simply Avoiding materialism Principle of enoughness Becoming better environmental citizens Avoiding traps

Components of the Environmental Revolution Environmental or sustainability revolution Biodiversity protection Efficiency Energy Pollution prevention Sufficiency Demographics Economics and politics Individuals matter “All sustainability is local” and “Think globally, act locally”

Environmentally Sustainable Societies Solutions Developing Environmentally Sustainable Societies Guidelines Strategies Leave world in as good a shape as—or better than—we found it Do not degrade or deplete the earth's natural capital, and live off the natural income it provides Copy nature Take no more than we need Do not reduce biodiversity Try not to harm life, air, water, soil Do not change the world's climate Help maintain the earth's capacity for self-repair Do not overshoot the earth's carrying capacity Repair past ecological damage Sustain biodiversity Eliminate poverty Develop eco-economies Build sustainable communities Do not use renewable resources faster than nature can replace them Use sustainable agriculture Depend more on locally available renewable energy from the sun, wind, flowing water, and sustainable biomass Emphasize pollution prevention and waste reduction Do not waste matter and energy resources Recycle, reuse, and compost 60–80% of matter resources Maintain a human population size such that needs are met without threatening life-support systems Emphasize ecological restoration Fig. 18-23, p. 434