1. Chapter 14 Lecture Outline
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2. What kind of world do you want to live in
What kind of world do you want to live in? Demand that your teachers teach you what you need to know to build it. –Peter Kropotkin

3. Learning Outcomes After studying this chapter, you should be able to answer the following questions:
• How have the size and location of the world’s largest cities changed over the past century? • Define slum and shantytown, and describe the conditions you might find in them. • What is urban sprawl? How have automobiles contributed to sprawl? • What are some principles of smart growth and new urbanism? • Describe sustainable development and why it’s important. • What value do we get from free ecological services? • What’s the difference between GNP and GPI? • What do we mean by internalizing external costs?

4. 14.1 Cities Are Places of Crisis and Opportunity
More than half of humans now live in cities, and in the next quarter century that number will approach three-quarters of us.
This is a dramatic change from all previous human history, in which most humans lived by hunting and gathering, farming, or fishing.

5. Large cities are expanding rapidly
You can already see the dramatic shift in size and location of big cities. In 1900 only 13 cities in the world had populations over 1 million.
By 2007, there were at least 300 cities—100 of them in China alone—with more than 1 mil lion residents.
By 2025, it’s expected that at least 93 cities will have populations over 5 million.

6. Immigration is driven by push and pull factors
People migrate to cities for many reasons. In China over the past 20 years—or in America during the twentieth century—mechanization eliminated jobs and drove people off the land.
Many people also move to the city because of the opportunities and independence offered there. Cities offer jobs, better housing, entertainment, and freedom from the constraints of village traditions.
Government policies often favor urban over rural areas in ways that both push and pull people into cities.

7. Congestion, pollution, and water shortages plague many cities
Pollution from burgeoning traffic and from unregulated factories degrades air quality in many urban areas. China’s spectacular economic growth has resulted in an flood of private automobiles mainly in cities.
Worldwide, at least 1.1 billion people don’t have safe drinking water.

8. Many cities lack sufficient housing
The United Nations estimates that at least 1 billion people live in crowded, unsanitary slums of the central cities or in the vast shantytowns and squatter settlements that ring the outskirts of most major cities in the developing world.
Around 100 million people have no home at all.

9. 14.2 Urban Planning Transportation is crucial in city development
Cities that were once compact began to spread over the landscape, consuming space and wasting resources. This pattern of development is known as sprawl.
We can make our cities more livable
One option proposed by many urban planners is smart growth, which makes effective use of land resources and existing infrastructure by in-fill development that avoids costly duplication of services and inefficient land use.
How can we live together in cities in ways that are environmentally sound, socially just, and economically sustainable? Starting with Greek cities thousands of years ago, planners have debated the best ways for us to organize ourselves.
Most of the world’s major cities grew up around a port, a river crossing, a railroad hub, or some other focal point for transportation.
A century ago, most American cities were organized around transportation corridors. First horse-drawn carriages, then electric streetcars provided a way for people to get to work, school, and shops. Everyone, rich or poor, wanted to live as close to the city center as possible, and within easy walking distance of the trolley or streetcar line. When Henry Ford introduced the first affordable, mass-produced automobile, it allowed people to build houses on
larger lots in areas served only by streets. Freeway construction, which began in America in the 1950s, allowed people to move even further out into the country.
While there is no universally accepted definition of the term, sprawl generally includes the characteristics outlined in table 14.3.
Smart growth aims to provide a mix of land uses to create a variety of affordable housing choices and opportunities. It also attempts to provide a variety of transportation choices, including pedestrian friendly neighborhoods. This approach to planning also seeks to maintain a unique sense of place by respecting local cultural and natural features.

11. New urbanism incorporates smart growth
• Limit city size or organize cities in modules of 30,000 to 50,000 people—large enough to be a complete city but
small enough to be a community.
• Maintain greenbelts in and around cities. These provide recreational space and promote effi cient land use, as well
as help ameliorate air and water pollution.
• Determine in advance where development will take place. This protects property values and prevents chaotic development. Planning can also protect historical sites, agricultural resources, and ecological services of wetlands, clean rivers, and groundwater replenishment.
• Locate everyday shopping and services so people can meet daily needs with greater convenience, less stress, less
automobile dependency, and less use of time and energy (fig ). This might be accomplished by encouraging
small-scale commercial development in or close to residential areas.
• Encourage walking or the use of small, low-speed, energy efficient vehicles (microcars, motorized tricycles, bicycles, etc.) for many local trips now performed in full-size automobiles. Creating special traffi c lanes, reducing the number or size of parking spaces, and closing shopping streets to big cars might encourage such alternatives.
• Promote more diverse, fl exible housing as an alternative to conventional detached, single-family houses. In-fi ll building between existing houses saves energy, reduces land costs, and might help provide a variety of living arrangements. Allowing single-parent families or groups of unrelated adults to share housing and to use facilities cooperatively also provides alternatives to those not living in a traditional
nuclear family.
• Make cities more self-sustainable by growing food locally, recycling wastes and water, using renewable energy sources, reducing noise and pollution, and creating a cleaner, safer environment. Encourage community gardening (fig ). Reclaimed inner-city space or a greenbelt of agricultural and forestland around the city provides food and open space, and also contributes valuable ecological services, such as purifying air, supplying clean water, and protecting wildlife habitat and recreation land.
• Equip buildings with “green roofs” or rooftop gardens that improve air quality, conserve energy, reduce stormwater runoff, reduce noise, and help reduce urban heat island effects. Intensive gardens can include large trees, shrubs, flowers, and may require regular maintenance (fig ). Extensive gardens require less soil, add less weight to the building, and usually have simple plantings of prairie plants or drought-resistant species, such as sedum, that require minimum care. They can last twice as long as conventional roofs. In Europe more than 1 million m2 of green roofs are installed every year. Urban roofs are also a good place for solar collectors or wind turbines.
• Plan cluster housing, or open-space zoning, which preserves at least half of a subdivision as natural areas, farmland, or other forms of open space. Studies have shown that people who move to the country don’t necessarily
want to live miles from the nearest neighbor; what most desire is long views across an interesting landscape and an
opportunity to see wildlife. By carefully clustering houses on smaller lots, a conservation subdivision can provide the
same number of buildable lots as a conventional subdivision and still preserve 50 to 70 percent of the land as open
space (fig ). This not only reduces development costs (less distance to build roads, lay telephone lines, sewers, power cables, etc.) but also helps to foster a greater sense of community among new residents.
• Preserve urban habitat. It can make a significant contribution toward saving biodiversity as well as improving mental health and giving us access to nature.

12. 14.3 Economics and Sustainable Development
Development means improving people’s lives.
Sustainability means living on the earth’s renewable resources without damaging the ecological processes that support us all.
Sustainable development is an effort to marry these two ideas.
A popular definition describes this goal as “meeting the needs of the present without compromising the ability of
future generations to meet their own needs.” But is this possible? As you’ve learned elsewhere in this book,
many people argue that our present population and economic levels are exhausting the world’s resources. There’s no way, they insist, that more people can live at a higher standard without irreversibly degrading our environment. Others claim that there’s enough for everyone if we just share equitably and live modestly. Let’s look a
little deeper into this important debate.

13. Our definitions of resources shape how we use them
Classical economics assumes that natural resources are finite—that resources such as iron, gold, water, and land exist in fixed amounts.
Neoclassical economics, developed in the nineteenth century, expanded the idea of resources to include labor, knowledge, and capital.
Ecological economics applies ecological ideas of system functions and recycling to the definition of resources.
According to classical economics, as populations grow, scarcity of these resources reduces quality of life, increases competition, and ultimately causes populations to fall again.
In neoclassical economics, labor and knowledge are resources because they are necessary to create goods and services; they are not finite because every new person can add more labor and energy to an economy.
Natural resource economics extends the neoclassical viewpoint to treat natural resources as important waste sinks (absorbers), as well as sources of raw materials. Natural capital (resources) is considered more abundant, and therefore cheaper, than built or human-made capital.
Ecological economics also treats the natural environment as part of our economy, so that natural capital becomes a key consideration in economic calculations. Ecological functions, such as absorbing and purifying wastewater, processing air pollution, providing clean water, carrying out photosynthesis, and creating soil, are known as ecological services (table 14.5).

14. Ecological economics and neoclassical economics distinguish between
Nonrenewable resources exist in finite amounts:
minerals, fossil fuels, and also groundwater that recharges extremely slowly are all fixed, at least on a human timescale.
Renewable resources are naturally replenished and recycled at a fairly steady rate.
Fresh water, living organisms, air, and food resources are all renewable (fig ).

15. Scarcity can lead to innovation
Many economists contend that human ingenuity and enterprise often allow us to respond to scarcity in ways that postpone or alleviate dire effects of resource use.
The question of whether this view is right has to do with the important theme of limits to growth.

16. Communal property resources are a classic problem in economics
One of the difficulties of economics and resource management is that there are many resources we all share but nobody owns.
Clean air, fish in the ocean, clean water, wildlife, and open space are all natural amenities that we exploit but that nobody clearly controls.
In 1968 biologist Garret Hardin wrote “The Tragedy of the Commons,” an article describing how commonly held resources are degraded and destroyed by self-interest.
Using the metaphor of the “commons,” or community pastures in colonial New England villages, Hardin theorized that it behooves each villager to put more cows on the pasture. Each cow brings more wealth to the individual farmer, but the costs of overgrazing are shared by the entire community. The individual farmer, then, suffers only part of the cost, but gets to keep all the profits from the extra cows s/he put on the pasture. Consequently, the commons becomes overgrazed, exhausted, and depleted. This dilemma is also known as the “free rider problem.” The best solution, Hardin argued, is to give coercive power to the government or to privatize resources so
that a single owner controls resource use.

17. 14.4 Natural Resource Accounting
Decision making about sustainable resource use often entails cost benefit analysis (CBA), the process of accounting and comparing the costs of a project and its benefits.
Ideally, this process assigns values to social and environmental effects of a given undertaking, as well as the value of the resources consumed or produced. However, the results of CBA often depend on how resources are
accounted for and measured in the first place. CBA is one of the main conceptual frameworks of resource economics, and it is used by decision makers around the world as a way of justifying the building of dams, roads, and airports, as well as in considering what to do about biodiversity loss, air pollution, and global climate
change. CBA is a useful way of rational decision making about these projects. It is also widely disputed because it tends to discount the value of natural resources, ecological services, and human communities, and it is used to justify projects that jeopardize all these resources.
Figure shows an example of a cost-benefit analysis for reducing particulate air pollution (soot) in Poland. As you can see, removing the highest 40 percent of particulates is highly cost effective. Approaching 70 percent particulate removal, however, the costs may exceed benefits.

18. Values such as wildlife, nonhuman ecological systems, and ecological services can be incorporated with natural resource accounting. In theory this accounting contributes to sustainable resource use because it can put a value on long-term or intangible goods that are necessary but often disregarded in economic decision making. One important part of natural resource accounting is assigning a value to ecological services (table 14.6).

19. 14.5 Trade, Development, and Jobs
If most wealth is held by just a few people, the misery and poverty of the majority eventually lead to … instability.
International trade allows us to take advantage of all the best or cheapest products from around the world.
The World Bank makes loans for Third World development projects.
A sustainable society requires some degree of equitable resource distribution: if most wealth is held by just a few people, the misery and poverty of the majority eventually lead to social instability and instability of resource supplies. Accordingly, wealthy industrial nations have worked harder in recent decades to assist in developing
the economies in poorer countries.
International trade allows us to take advantage of all the best or cheapest products from around the world. If Egypt can produce cotton cheaper than Texas, then we should buy our cotton from Egypt. If Malaysia can manufacture
athletic shoes with labor that costs a few cents an hour, then we should buy our shoes from Malaysia. Building factories in Malaysia also stimulates the Malaysian economy, even though workers earn only a small fraction of what a worker in a wealthy country would earn.
The World Bank has more influence on the financing and policies of developing countries than any other institution. Of some $25 billion loaned each year for Third World projects by multinational development banks, about two-thirds comes from the World Bank. This institution was founded in 1945 to provide aid to wartorn Europe and Japan. In the 1950s its emphasis shifted to development aid for Third World countries. This aid was justified on humanitarian grounds, but it also conveniently provided markets and political support for growing American and European multinational corporations.
The World Bank is jointly owned by 150 countries, but one third of its support comes from the United States. Its president has always been an American. The bulk of its $66.8 billion capital comes from private investors. The bank makes loans for development projects, and the investors hope to make a profit on the investment, usually from interest paid on the loans.
Many World Bank projects have been environmentally destructive and highly controversial. In Botswana, for example, $18 million was provided to increase beef production for export by 20 percent, despite already severe overgrazing on fragile grasslands. The project failed, as had two previous beef production projects in the same area.

20. Microlending
Local development programs, often called microlending, have begun to develop.
Banks make small loans, averaging just $67, to help poor people buy a sewing machine, a bicycle, a loom, a cow, or some other commodity that will help them start, or improve, a home business
Recently, smaller, local development programs, often called microlending, have begun to develop. These are aimed at smallscale, widespread development, and their results have been very promising. The first of these was Bangladesh’s Grammeen (village) Bank network. These banks make small loans, averaging just $67, to help poor people buy a sewing machine, a bicycle, a loom, a cow, or some other commodity that will help them start,
or improve, a home business (fig ). Ninety percent of the customers are women, usually with no collateral or steady income. Still, loan repayment rates are 98 percent—compared with only 30 percent at a conventional bank. This program enhances dignity, respect, and cooperation in a village community, and it teaches individual responsibility and enterprise. Comparable programs have now sprung up around the world. In the United States, more than a hundred organizations have begun providing microloans and small grants for training. The Women’s Self-Employment Project in Chicago, for instance, teaches job skills to single mothers in housing projects.

21. 14.6 Green Business and Green Design
Environmentally conscious, or “green,” companies, have shown that operating according to the principles of sustainable development and environmental protection can be good for public relations, employee morale, and sales.
Examples of green companies:
The Body Shop
Patagonia
Aveda
Malden Mills
Johnson and Johnson
Green business works because consumers are becoming aware of the ecological consequences of their purchases. Increasing interest in environmental and social sustainability has caused an explosive growth of green products. The National Green Pages published by Co-Op America currently lists more than 2,000 green companies. You can find eco-travel agencies, telephone companies that donate profits to environmental groups, entrepreneurs selling
organic foods, shade-grown coffee, straw-bale houses, paint thinner made from orange peels, sandals made from recycled auto tires, and a plethora of hemp products, including burgers, ale, clothing, shoes, rugs, and shampoo. Although these ecoentrepreneurs represent a tiny sliver of the $7 trillion per year U.S. economy, they often are pioneers in developing new technologies and offering innovative services.
Markets also grow over time: organic food marketing has grown from a few funky local co-ops to a $7 billion market segment. Most supermarket chains now carry some organic food choices. Similarly, natural-care health
and beauty products reached $2.8 billion in sales in 1999 out of a $33 billion industry. By supporting these products, you can ensure that they will continue to be available and, perhaps, even help expand their penetration into the market.
Corporations committed to eco-efficiency and clean production include such big names as Monsanto, 3M, DuPont,
and Duracell. Applying the famous three Rs—reduce, reuse, recycle—these firms have saved money and gotten welcome publicity (see related story “Eco-Efficient Carpeting” at Savings can be substantial. Pollution prevention programs at 3M, for example, have saved $857 million over the past 25 years.

22. Environmental protection creates jobs
Green businesses often create far more jobs and stimulate local economies far more than environmentally destructive ones.
Wind energy, for example, provides about five times as many jobs per kilowatt-hour of electricity than does coal-fired power (chapter 12).
For years business leaders and politicians have portrayed environmental protection and jobs as mutually exclusive. They claim that pollution control, protection of natural areas and endangered species, and limits on use of nonrenewable resources will strangle the economy and throw people out of work. Ecological economists
dispute this claim, however. Their studies show that only 0.1 percent of all large-scale layoffs in the United States in recent years were due to government regulations (fig ). Environmental protection, they argue, is not only necessary for a healthy economic system; it actually creates jobs and stimulates business. Japan, already a leader in efficiency and environmental technology, has recognized the multibillion-dollar economic potential of “green” business. The Japanese government is investing $4 billion per year on research and development, and now it is selling about $12 billion worth of equipment and services per year worldwide.

23. Practice Quiz
1. How many people now live in urban areas? 2. How many cities were over 1 million in 1900? How many are now? 3. Why do people move to urban areas? 4. What is the difference between a shantytown and a slum? 5. Define sprawl. 6. In what ways are cities ecosystems? 7. Define smart growth. 8. Describe a “green” roof. 9. Describe a few ways in which BedZED is self-sufficient and sustainable. 10. Define sustainable development.
11. Briefly summarize the differences in how neoclassical and ecological economics view natural resources. 12. What is the estimated economic value of all the world’s ecological services? 13. How is it that nonrenewable resources can be extended indefinitely, while renewable resources are exhaustible? 14. In your own words, describe what is shown in figure What’s the difference between open access and communal resource management? 16. Describe the genuine progress index (GPI). 17. What is microlending?