1. Chapter 2 Environmental Laws, Economics and Ethics

2. Overview of Chapter 2 Brief US Environmental History
US Environmental Legislation
Economics and the Environment
Environmental Problems in Central and Eastern Europe
Environmental Ethics, Values and Worldviews

3. Economics and the Environment
Economics- study of how people use limited resources to satisfy unlimited wants
Analytical tools include models
Economy
Production
Consumption
Products
Money
Source
Raw Materials
Sinks
Waste

4. Precepts to Study Economics
Economics is utilitarian
Goods and services have value that can be converted to currency
Rational Actor Model
Assumes all individuals spend limited resources to maximize individual utilities
Ideal economy
Resources are allocated efficiently

5. Economics and Environmental Issues
Environmental problems arise when market failures occur in one of several ways
Externalities- the effect of a firm that does not have to pay all the costs associated with its production
Solution- define rights and ownership

6. Optimum Level of Pollution
Solution for multiple polluters
Optimum amount of pollution = most economically desirable
Cost to society of having less pollution is offset by benefits to society of activity creating pollution
Must identify
Marginal Cost of Pollution- Cost of small additional amount of pollution
Marginal Cost of Abatement- Cost of reducing small amount of pollution

7. Economic Optimum Level of Pollution
Marginal cost of pollution - cost of small additional amount of pollution

8. Economic Optimum Level of Pollution
Marginal cost of pollution abatement - cost of reducing small amount of pollution

9. Economic Optimum Level of Pollution
Let’s put the graphs together…
Cost-Benefit Analysis
Pollution is at an optimal level when marginal costs and abetment are equal- the economic system is efficient

10. Private vs Social Cost of Pollution
Reality - Less than optimum
Private cost
Social cost
In unregulated economic markets- those pollute often face only a fraction of the total costs of pollution

11. Strategies for Pollution Control
Economic strategies for pollution control (3 options):
Command and Control (Democrats)
Incentive- based regulation (Republicans)
“Green” Taxes
Tradable Permits
Think of the carbon regulation lab we did!

12. Strategies for Pollution Control
Command and Control Solutions
Government agency requires limitations to emissions or pollutants
Discourages development of low-cost alternatives
Economists dislike this

13. Strategies for Pollution Control
Environmental Taxes and Tradable Permits
What are they?
If taxes are set at correct level private marginal cost of pollution = social cost of pollution
Economists like this

14. Critiques of Environmental Economics
Difficult to assess true costs of environmental pollution and abatement
Impacts of pollution on people and nature is uncertain
Ecosystem services have no known value
Utilitarian economics may not be appropriate
Dynamic changes and time are not considered
Based only on monetary value – what is monetary value of clean earth?

15. National Income Accounts
Estimates of National Economic Performance and used in Politics includes:
Gross Domestic Product (GDP)
Net Domestic Product (NDP)
These can be misleading and incomplete
Do not take into account environmental factors

16. National Income Accounts
NDP = GDP - depreciation / capital expenses
BUT, consuming nonrsenewable natural resources typically NOT accounted

17. National Income Accounts
NDP = GDP - depreciation / capital expenses
In addition, degradation of natural resources by pollution also typically NOT accounted
External costs rarely considered

18. Natural Capital
Problems involve costs and benefits of pollution control and depletion of natural capital
Natural capital- all of earth’s resources and processes that sustain living organisms, including humans

19. National Income Accounts
Remember : NDP = GDP – used up capital
When natural resources are used, these are not accounted for in the NDP
If it is cheaper to pollute (higher GDP), companies will
Environment may be overexploited to yield a higher GDP in developing countries
Solutions:
Replace GDP and NDP with a more comprehensive measure of national income accounting that includes estimates of both natural resource depletion and environmental costs of economic activities
EPI (Environmental Performance Index)
Assesses a country’s commitment to environmental and resource management

21. Case Study- Environmental Problems in Eastern Europe
Fall of Communist governments revealed large environmental destruction
Problems:
Soil and water poisoned
Unidentified leaks in dumping sites
Industry with air pollutants causing acid rain
Human effects…
Children with chronic asthma, bronchitis, and heart problems

22. Case Study- Environmental Problems in Eastern Europe
Meeting industrial quotas took precedence over environmental concerns
Switch from communism to market economies- need to improve environment
Will take decades to clean up polluting economics of communism
Success varies by country
Romania- EPI = 90th
Czech Republic- EPI = 4th

23. Environmental Ethics What are ethics? What are values?
Field of ethics that considers the moral basis of environmental responsibility
Environmental worldviews- many and varied; 2 extremes:
Western Worldview
Human superiority and dominance over nature
Deep Ecology Worldview
Principles (record these or reference your textbook)
All species have an equal worth to humans
Most people’s ethics fall somewhere in between

24. All Done with Notes!!!
We are going to stop here… the beginning part of the chapter (pp 24-33) is your responsibility to learn.
As a class we will be creating an environmental timeline from the 1600’s till today.
You will be assigned a period of time to research and present to your classmates.
You may use the following slides as a reference, but you will need to do more research.

26. Environmental History of the US
1600
1700
1800
1900
Dominated by Frontier Attitude
Establishment of Jamestown, VA
1600s - early 1800s = Frontier Attitude
Natural Resources (land, timber soil, water) seemed inexhaustible
Widespread Environmental Destruction

27. Environmental History of US
1750
1800
1850
1900
John James Audobon ( )
Henry David Thoreau ( )
George Perkins Marsh ( )
19th century- US Naturalists voiced concerns about natural resources
Audobon- painting increased interest in environment
Thoreau- naturalist author on simplifying life
Marsh- wrote Man and Nature

28. Environmental History of US
1875
1900
1850
1875 American Forestry Assoc. Formed
1890 Yosemite and Sequoia National Parks Established
1891 General Revision Act
General Revision Act
Gave President Authority to establish forest reserves
Presidents Harrison, Cleveland, Roosevelt put 17.4 million hectares into reserve
Roosevelt reserved additional 6.5 million hectares before signing bill preventing further forest reservation

29. Environmental History of US
Utilitarian Conservationist
Roosevelt
Value natural resources for their usefulness
Biocentric Preservationist
John Muir (founded Sierra Club)
Fought for National Parks
Protect nature because all life deserves respect

30. Environmental History of US
1925
1950
1900
1935 Creation of Soil Conservation Service
1906 Antiquities Act
1916 National Park Service Created
Antiquities Act
Allows president to set aside sites of scientific or historical importance (monuments)
American Dust Bowl (1930s droughts)
Basis for Soil Conservation Service
Created by Franklin Roosevelt

31. Environmental History of US
1900
1925
1950
1975
Aldo Leopold ( )
Wallace Stegner ( )
Rachel Carson ( )
20th Century Naturalists
Leopold- Author (A Sand Country Almanac)
Stegner- Author (“Wilderness Essay”)
Carson- Author (Silent Spring)
Heightened awareness of DDT and pesticides

33. US Environmental Legislation
Environmental Protection Agency
Est. 1970
National Environmental Policy Act (NEPA)
Cornerstone of Environmental Law
Requires Environmental Impact Statements (EIS) for any proposed federal action
Ex: highway or dam construction
EIS must answer many questions (next slide)
Revolutionized environmental protection in US

34. Environmental Impact Statements

35. US Environmental Legislation
Numerous laws passed since 1970
They address:
Clean water
Clean air
Energy conservation
Hazardous waste
Pesticides
Federal regulation of pollution

38. Effects of Environmental Legislation (According to EPA’s Draft Report on the Environment 2003)
Since 1970,
6 air pollutants have dropped by 25%
Since 1990
wet sulfate levels decreased 20-30%
In 2002
94% of US had healthy drinking water (up from 79% in 1993)
As of 2002
846 of 1498 Superfund Sites are cleaned up
Fewer streams violate water standards