Environmental History, Politics, and Economics

Environmental History, Politics, and Economics
Chapter 3

Renewable Energy Policy Challenges
Governments struggle to develop climate change policies: Costs of reducing climate change and the effects of not doing so are huge Scientists agree that human-caused climate change is happening and will worsen Public and policy makers are skeptical One of the biggest issues: Shifting to alternative energy sources Fossil fuels are largest source of greenhouse gases Alternative sources (wind, solar) may have aesthetic, noise, environmental, tourism implications

Renewable Energy Policy Challenges

Conservation and Preservation of Resources
Learning Objectives: Define conservation and preservation, and distinguish between them

Any part of the natural environment used to promote the welfare of people or other species Conservation: Sensible and careful management of natural resources Terracing farmland to prevent erosion Crop rotation to enhance soil fertility Irrigation to increase crop yield Preservation: Setting aside undisturbed areas maintaining them in a pristine state protecting them from human activities that might alter their natural state

Global Climate Change What is conservation? What is preservation?
How does conservation differ from preservation?

Environmental History
Learning Objectives: Briefly outline the environmental history of the United States Describe the contributions of the following people to our understanding of the environment: John James Audubon, Henry David Thoreau, George Perkins Marsh, Theodore Roosevelt, Gifford Pinchot, John Muir, Franklin Roosevelt, Also Leopold, Wallace Stegner, Rachel Carson, Paul Ehrlich, Julian Simon. Distinguish between utalitarian conservationists and biocentric preservationists

The first 200 years of US history were a time of widespread environmental destruction (1600s–1800s) Prevailing ‘frontier’ attitude was that of conquering nature and profiting from it.

Protecting Forests: John James Audubon (1785–1851) Painted portraits of birds and other animals, increased knowledge and interest in wildlife Henry David Thoreau (1817–1862) Writer, lived on Walden Pond, early advocate of lifestyle simplicity to live in harmony with nature George Perkins Marsh (1801–1882) Wrote “Man and Nature” about humans as agents of environmental change

American Forestry Association (1875) Citizens against the destruction of America’s forests Forest Reserve Act (1891) Presidential authority to establish forest reserves on federal land, out of the reach of loggers Harrison, Cleveland, McKinley, T. Roosevelt used it to create 43 million acres’ worth of preserves. Law was later modified to require act of Congress Roosevelt signed it after creating 21 new national forests, protecting an additional 16 million acres. Appointed Gifford Pinchot head of the US Forest Service

Roosevelt and Pinchot were Utalitarian Conservationists Valued natural resources because of their usefulness to humans (jobs and renewable resources) Used them sensibly and carefully: sustainably Pinchot supported Expanding forest reserves Managing them scientifically (harvesting trees at sustainable rate)

National Parks and Monuments Congress (1872) First National Park: Yellowstone John Muir (1838–1914) Biocentric preservationist: believed in protecting nature from human interference because all forms of life deserve respect and consideration Founded Sierra Club National Conservation Association, still active Advocated the creation National Parks in California Yosemite National Park Bill (Congress, 1890) Yosemite and Sequoia National Parks.

Antiquities Act (1906) Presidential authority to set aside sites of scientific, historic, or prehistoric importance By 1916: 16 National Parks and 21National Monuments, managed by US Army Now: 58 National Parks, 74 National Monuments, managed by National Park Service National Park Service, (1916) created to manage parks and monuments for enjoyment “without impairment” Conflicts over preservation of sites such as Hetch Hetchy Valley (Yosemite) in 1913; dam was built, valley flooded 1950s, dam was not built within Dinosaur National Monument, because filling the canyon with 400 ft of water would impair it

Conservation in Mid-20th Century Franklin D. Roosevelt (1882–1945) Civilian Conservation Corps: Response to Great Depression 500,000 jobs in activities to protect natural resources (planting trees, making paths in parks and forests, controlling floods) Soil Conservation Service (1935) Response to American Dust Bowl, 1930s

Aldo Leopold (1886–1948) A Sand County Almanac (1949) Argued for a Land ethic and Wildlife Conservation Sacrifices Required Influenced many after him, including Wallace Stegner (1909–1993) Supported Wilderness Act of 1964 Wilderness Essay

Rachel Carson (1907–1964) Marine Biologist Silent Spring (1962) Raised public concern about pesticide use, esp. DDT Dangers to birds and other wildlife, contaminating human food supply Ultimately led to the restrictions on pesticide use

Paul Ehrlich The Population Bomb (1968) World’s population was 3.5 Billion Huge impact on Earth’s life support systems Raised public’s awareness of dangers of overpopulation Julian Simon (1932–1998) Ehrlich’s critic Technological advances outpace the negative impacts of population growth 22

The Environmental Movement Environmentalists People concerned about the environment Environmental Movement Spring Earth Day Student Denis Hayes with support of Senator Gaylord Nelson Awakened US environmental consciousness 20 million people planted trees, cleaned roadsides and riverbanks, marched in parades to support resource conservation and environmental quality

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EnviroDiscovery

Global Climate Change How did public perception of the environment evolve during the 20th century? What was the environmental contribution of Rachel Carson? How did Aldo Leopold influence the conservation movement of the mid- to late- 20th century?

Environmental Legislation
Learning Objectives: Explain why the National Environmental Policy Act (NEPA) is the cornerstone of US environmental law Describe how environmental impact statements provide powerful protection of the environment Define full cost accounting

National Environmental Policy Act (NEPA) Environmental Protection Agency (EPA) 1970 NEPA requires the federal government to consider the environmental impact of proposed dams, highways, etc. Must develop Environmental Impact Statements EISs must accompany proposals describe short- and long-term environmental impact and alternatives with fewer adverse effects NEPA must solicit public comments on an EIS

Council on Environmental Quality Established by NEPA Reports to President on EISs NEPA revolutionized environmental protection in the US One-third of land in US is under federal control IESs are required for highway construction, flood and erosion control, military projects, fossil fuels, mineral reserves, public grazing land and public forests. Little gets done without some sort of environmental review NEPA has critics: EISs incomplete, get ignored EISs delay important projects

Environmental Regulations Environmental problem is recognized US Congressperson drafts legislation Full cost accounting is considered (relative benefits and costs of various alternatives) Legislation goes to EPA, translated into regulations Public Comment RoundsEPA must respond Office of Management and Budget (OMB) reviews new regulations Implementation and enforcement falls on states States report back to EPA

Accomplishments 40 major environmental laws since 1970 Endangered species, clean water, clean air, energy conservation, hazardous waste, pesticides Improved environmental quality 15 new National Parks (106+ million acres) Soil erosion has been reduced by 60% Many endangered species are recovering Pollution Control has been successful (but needs lots more work) EPA’s 2008 Report on the Environment

Global Climate Change Why is the National Environmental Policy Act (NEPA) is the cornerstone of US environmental law? What are environmental impact statements? How does full cost accounting influence environmental decision making?

Environmental Economics
Learning Objectives: Explain how economics is related to natural capital. Make sure you include sources and sinks Give two reasons why the national income accounts are incomplete estimates of national economic performance Distinguish among the following economic terms: marginal cost of pollution, marginal cost of pollution abatement, and optimum amount of pollution Describe various incentive-based regulatory approaches, including environmental taxes and tradable permits

Study of how people use limited resource to satisfy unlimited wants Supply and demand determine prices Great demand, short supply high price Suppliers produce as long as selling price is more than cost of production Interaction between demand, supply, cost, and price drives the economy Economy depends on natural environment Sources for raw materials Sinks for waste products

Environmental InSight

Natural Capital Earth’s resources and processes that sustain living organisms, including humans Sources and Sinks are part of natural capital: Minerals, forests, soils, water, clean air, wildlife, fisheries Environment provides natural capital for human production and consumption Long-term economic future is threatened by Resource degradation = overuse of sources Resource pollution = overuse of sinks

National Income Accounts & Environment Measures of the total income of a nation’s goods and services for a given year GDP = gross domestic product NDP = net domestic product Economic well-being depends on natural resources (land, rivers, timber, ocean, oil, air) National Income Accounts should include: Profits Costs Natural resource depletion Environmental degradation GDP and NDP are incorrect because they do not take into account costs of depletion and pollution Better Accounting will help determine when the benefits of production (economic and environmental) exceed the costs

Natural Resource Depletion GDP = NDP + depreciation NDP is a measure of net production of an economy, after deducting used-up capital (costs of production, labor, wear of equipment) However: Oil company drains oil from an underground field, the value is counted as part of GDP, with NO deduction to account for the fact that oil is a non-renewable resource should be counted as depreciation

Costs and Benefits of Pollution Control Choices: Company produces $100 million, can dump waste and pollute local river Company produces $90 million, uses 10 million to properly dispose of waste, no pollution Currently: If firm chooses to pollute, it contributes more to the GDP, because there is no explicit value to keeping the river clean!!! Ideally: Economic cost of environmental degradation should be deducted from GDP Economic benefits of improving (or not harming) the environment should be added to GDP

An Economist’s View of Pollution One of the causes of the world’s pollution problems is the failure to include external costs in the prices of goods External costs Harmful environmental cost, borne by people not directly involved in selling or buying the product For example: the pollution released when fossil fuels are burned and pollution released to transport a product Encourages pollution. If full cost were added, people might not purchase such products

How Much Pollution is Acceptable? Trade-off between Protecting environmental quality Producing more goods Involves balancing the marginal cost (added cost per unit) of The cost of more pollution (degrading the environment) The cost of eliminating pollution (in terms of giving up goods)

Marginal Cost of Pollution Added cost of an additional unit of pollution Damage to health, property, agriculture Cost of damage must be assigned dollar values Marginal Cost of Sulfur Dioxide Waste product of fossil fuel burning Produces acid rain damages aquatic ecosystems The more sulfur dioxide pollution, the higher the damage to the environment

Marginal Cost of Pollution Abatement The added cost of reducing one unit of a given type of pollution Cost rises as the level of pollution declines Marginal Cost of Reducing Automobile Emissions Relatively inexpensive to reduce emissions by 50% Reducing by 50% again requires costly devices

Cost-Benefit Diagram Helps policymakers make decisions about the costs of particular actions and the benefits that would occur if those actions were implemented Optimum Amount of Pollution The point were the marginal cost of pollution equals the marginal cost of abatement The cost to society of less pollution is offset by the benefits to society by the activity creating the pollution

Economic Strategies for Pollution Control Command and Control Regulations Pollution control laws that work by setting limits on levels of pollution Sometimes require a specific method of pollution control, e.g., catalytic converters in cars Sometimes set a quantitative goal, e.g., Clean Air Act Amendment of 1990, set a goal of 60% reduction of NOx emissions by 2003

Incentive-Based Regulations Work by establishing emission targets and providing industries with incentives to reduce emissions Ideally, industries internalize external costs, to reach optimum amount of pollution level Environmental Taxes Polluter gets taxed for polluting Tradable Permits (cap and trade) Allowable amount of pollution limit is set . Companies who pollute less can sell their pollution rights to others 58

Global Climate Change What is natural capital?
Why are national income accounts incomplete estimates of total national performance? How do command and control regulation and incentive-based regulation differ regarding pollution control?

Case Study Tradable Permits and Acid Rain
International policy experts believe that cap and trade system is the most promising to manage climate change problem Encourages people/countries to find innovative and cheap ways to reduce emissions

EPA 1970s–80s command and control regulations mandated coal-burning power plants to reduce sulfur emissions Plants installed expensive equipment By 1980s, plants knew of cheaper ways, but had not incentive to adopt them

Clean Air Act Amendment of 1990 EPA can limit the amount of sulfur emissions Each year is lower amount Permits can be bought and sold in market Industry adopted a variety of technologies to reduce emissions At lower than expected cost Ahead of EPA’s reduction schedules Cap and Trade doesn’t always work Not successful with water pollution More complex situation

Case Study

Environmental History, Politics, and Economics

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