1. Economics Environment, and Sustainability
Chapter 26
Economics Environment, and Sustainability

2. Resource Types in an Economic System
Natural resources/capital
Human resources/capital
Physical/manufactured resources

3. Pure Free Market No government interference with market.
Buyers and sellers determine pricing
How do you think buyers determine pricing

4. Supply and Demand

5. What is a Government?
2-3 sentences/bullet points about what you think.

6. Why Does Government Intervene in Economic Systems?
Markets GOOD for:
Private services
Markets UNRELIABLE for:
Public services
National security
Education
Enforcement of civil rights

7. The Civil Rights movement was more related to
Pure Free-Market Economic System
Government Intervened Market Economic System

8. Optimum Levels of Resource Use Or Pollution Reduction

9. Value of Future Resources
Discount Rate
An estimate of a resource’s future economic value compared to its present value.
Value of having THING today, is better than having THING in the future.
Why?
Thus, the value of anything current will fall in the future, so we must sell and use it now.
Coal
Computers
Wood
…human lives?

10. How do we Price Goods? Indirect/external costs Hidden costs
Gallon of gas actually cost $1.75/gal in 2003.
When accounting for the tax dollars required to wage war for fuel, clean the environment, and regulate fuel consumption/efficiency, we actually paid closer to ~$5.50/gal

11. Full Cost Pricing
Includes all external/indirect costs in original price.
Informs consumer of true cost of resource
Why does this not happen?
Competition demands low pricing
Government can’t/won’t demand full cost pricing

12. Green Taxes and Fees Lowers taxes on labor, income and wealth
Raises taxes on environmentally harmful practices
What are the pros and cons of this system?
Pros: brings full cost pricing into effect, change behavior of consumers and businesses
Cons: punishes low-income groups (unless safety net in place), taxes must constantly change as society changes, government may take this as a way to make money, not create positive change

13. Which method of internalizing the cost of pollution is MOST economically inefficient?
Impact fee
Pollution tax
Emission tax
Tradable pollution permit
Direct pollution limits

14. Which of the following will likely have the highest external cost?
Grazing on private lands
Erecting fences on private lands
Farming on private lands
Mining on public lands
Logging on private lands

15. Try it!
List all the economic goods you use, and then identify those that meet your basic needs and those that satisfy your wants. Identify any economic wants you would be
Willing to give up
Believe you should give up
Hope to give up in the future
Relate your results to your personal impact on the environment.