1. Ethics, Economics, and Sustainable Development
Chapter 6

2. Culture, Worldview, and the Environment
Culture vs. Worldview:
Culture - combined knowledge, beliefs, values, and shared way of life of a group of people
Worldview – beliefs of a person or group about the meaning and workings of the world
Two individuals from same culture can study same environmental problem and come to two different conclusions based on worldview

3. Environmental Ethics Ethics:
Ethics and economics deal with what we value
Ethics – study of good and bad, right and wrong also refers to the morals or values of a person or society
Relativists believe ethics do and should vary with social context
Universalists believe objective concepts of right and wrong hold across cultures and context

4. Ethics and Economics:
Ethical standards – criteria that help distinguish between right and wrong
Categorical imperative – the Golden Rule
Principle of Utility – right is most benefits reach most people
Value is held in two ways
Utilitarian - valuable because it’s useful
Intrinsic - valuable in itself
Common for both types of value to be present at same time

5. Environmental ethics - application of ethical standards to environmental questions
Involves issues of sustainability, environmental justice, intrinsic values between humans and non-humans
Ethical views
Anthropocentric – belief that only humans have intrinsic value
Biocentrism – belief that some non-human life has intrinsic value
Ecocentrism – belief that whole ecological systems have intrinsic value

7. Preservation ethic – natural systems should be preserved intact, intrinsic value
John Muir – founder of Sierra Club, promoted preservation of wilderness
Conservation ethic – advocates wise use of natural resources, utilitarian value
Gifford Pinchot – 1st Chief of US Forest Service, clashed with Muir over damming Hetch Hetchy Valley
Land ethic – maintains that humans and “the land” are part of the same community
Aldo Leopold – author, his work inspired modern environmental movement

8. Environmental Justice:
Environmental justice - fair and equitable treatment of all people regarding environmental issues
Minorities and the poor are:
Less informed and have less power
Exposed to more pollution and hazards
Live in areas with greater environmental degradation

10. Is there a tradeoff between the economy and the environment?
Most environmental and economic problems are linked
Oikos is Greek for “household” and root word for economics and ecology
Economic activities affect and often degrade the environment and ability to provide services
Depletes natural resources, generates pollution

12. Environmental Implications and the Principles of Economics:
Economics – study of how people use resources to satisfy demand for good and services
Economy – social system that converts resources to good and services
Goods are manufactured materials that are bought
Services are work done for others as a form of business
Subsistence economy – economy where people meet their daily needs gathering from nature or what they can produce on their own

13. Capitalist market economy - economy where buyers and sellers determine prices, production, and distribution of goods and services
Centrally planned economy - economy where government decides how to distribute resources
Mixed economy – economy where governments intervene to some extent, most national economies are mixed

14. Classical Economics – pursuit of economic self-interest within competitive markets
Supply the amount offered at a given price for goods and services
Demand the amount people will buy at a given price for goods and services
Developed by Adam Smith
Neoclassical Economics (NE) – combines consumer preference, supply and demand, costs and benefits
Market systems today operate on this model

15. Cost-benefit analysis – costs of proposed action are compared to benefits resulting from the action
Major problem with approach is monetary benefits are easier to calculate than environmental benefits
Models of NE involve several assumptions having negative environmental implications

16. NE treats resources as infinite or as substitutable
Earth is finite so are resources
NE assumes that benefits and costs are internal (experienced by the seller and buyer)
External costs – cost incurred to those not involved in the transaction
NE assumes events in the future count less than present
Discounting – short terms benefits and costs and more important than long term

18. Economics growth and “Limits to Growth”:
NE assumes that growth is good and will continue
Economic growth – an increase in an economy’s production and consumption of goods and services
Growth allows for poor to become wealthier, but economic activity is not the same as true wealth
Affluenza – more material things does not equal happiness
Growth comes from increased inputs (labor, resources) and economic development
Economic development – improved efficiency of production (technology, equipment, ideas)
More goods produced with fewer resources

19. Cornucopians – belief that human ingenuity and improved technology will allow continued economic growth
Cassandras – belief that Earth’s natural capital is finite, so continuous growth is not sustainable

20. Environmental Economics and Sustainability:
Environmental economics – belief that we must reduce our demand for resources and make their use more efficient to achieve sustainable growth
Calls for NE reform
Addresses external costs and discounting
Steady-state economies – economies that mirror natural ecological systems, they neither grow nor shrink
Nonmarket values – values not included in the price of a good or service (e.g., ecological, cultural, spiritual)

21. Measuring Meaningful Economic Growth and Progress:
Gross Domestic Product (GDP) - the total monetary value of the goods and services produced by a nation
GDP is a poor measure of economic well-being
GDP doesn’t include non-market values
GDP expresses all economic activity not just desirable activity
Pollution, oil spills, disasters, etc. increase GDP

22. Genuine Progress Indicator (GPI) – alternative to GDP that distinguishes between desirable and undesirable economic activity
GDP has risen significantly where as GPI has remained stagnant for past 30 years
Positive contributions (e.g., volunteer work) not paid for with money are added to economic activity
Negative impacts (crime, pollution) are subtracted

23. A 1997 study published in Nature, estimated the value of the world’s ecosystem services at more than 33 trillion (48 trillion in 2013 dollars)
More than GDP of all nations combined
Researchers calculated the global value of 17 major ecosystem services (water supply, recreation, raw materials, etc.)

25. Full cost accounting – accounting approach that attempts to monetize all costs and benefits
Also called True Cost Accounting
Examples include:
Index of Sustainable Economic Welfare (ISEW)
Net Economic Welfare (NEW)
Human Development Index
Gross National Happiness
Happy Planet Index

26. Moving Our Ecosystem in a Sustainable Direction:
Market failure – when markets ignore environment’s positive impacts or negative effects of activities on environment or people
Ecolabeling – labeling products so consumers know how products were grown, harvested, or manufactured
Increases awareness, provides incentives for businesses to move toward sustainable practices
Socially responsible investing – investing in companies meeting criteria for environmental or social sustainability
Greenwashing – when companies misled consumers into thinking they are more sustainable than they are

27. Sustainable Development is a Growing Global Movement:
Sustainable development – using resources to meet current needs without risking future availability
Development – using natural resources for economic advancement
Triple bottom line - sustainable solutions that meet goals of:
Protecting the environment
Economic advancement
Social equity

29. Millennium Development Goals - the United Nations established broad goals for global development:
End extreme poverty/hunger
Establish universal primary education
Promote gender equality and empower women
Reduce child mortality
Improve maternal health
Combat HIV/AIDS, malaria, and other diseases
Ensure environmental sustainability
Develop a global partnership for development