1. Environmental Economics

2. Feedbacks Economy feeds back onto the environment Environment feeds back onto the economy How?

3. Economic Feedbacks on to the Environment Most recent example is President Bush’s decision not to ratify Kyoto Protocol, citing that U.S. economy must take precedence Of course, economic growth means greater production and production means more use of raw materials, natural resources and emission of pollutants

4. Environmental feedbacks on to the economy On a global scale, the following issues will affect the world’s economic systems –Ozone hole –Acid rain –Deforestation –Grassland degradation –Global warming –Desertification

5. Why is economic growth important? Imperative to have the economy grow as long as human population continues to grow Developing countries must have a minimum of 3% annual growth to achieve equity with developed world –However, if they use current forms of development to achieve this growth, their energy use alone would have to increase by a factor of five!

6. What role do developing nations play in global economic growth? Huge! During 1980s their economic growth virtually stopped, resulting in a cummulative third world debt ~ $1 trillion –Annual interest on this is $60 billion On a global scale money is flowing from third world to developed world rather than the reverse

7. Third world environment and economy Third world is shipping money and products to developed world Third world is bearing large proportion of environmental cost of developed world’s economic growth –Deforestation of rainforests –Desertification

8. In the total tropics, 10 trees are cut down for every one planted. In Africa, 29 trees are cut down for every one planted. Without natural resources, many of these nations have nothing to sell on global market

9. UN Commission on Sustainable Economic Development Changes in societal values and goals Changes in incentives Changes in process of decision making

10. How can these changes be brought about? Reduce rates of population growth Determine stock of ecological capital and don’t let it deteriorate or lessen Reform public policies that encourage desertification, deforestation, etc. –E.g. agricultural subsidies that encourage use of marginal land, selling resources by gov’t below cost

11. How can these changes be brought about? Agricultural production must be shifted to developing countries –This is currently undermined by dumping of Western surpluses Reduce energy cost/unit of production –This is less with recycled materials –Will also result in reduced emissions Merge environment & economics in decision making –Stop externalizing environmental costs

12. Revamping education According to Holmes Ralston, environmental philosopher, Colorado State Univ., new university agenda must be “sustainability”

13. New University Agenda Students identify with their landscape in a mix of nature and culture Use local sense of place to understand world market impacts on OK –Energy –Agricultural products –Population demands –Acid rain, etc.

14. Examine how the University is “sustainable” Energy use Recycling Nutritional quality of food How does resource usage influence tuition, fees, etc.?

15. Alternative Economies (young ecosystem) Energy flow Growth (production) Maintenance (respiration)

16. Alternative Economies (mature ecosystem) Energy flow Growth (production) Maintenance (respiration)

17. Linear Economics Resource Extraction Product production Pollution ConsumptionDiscard

18. Cyclic Economics Resource Extraction Product production Pollution Consumption Discard Recycling

19. Remember our table… System propertyYoungMature Environ. Control Productivity Production Nutrient cycling Diversity

20. Fill this out with economic analogs System Property YoungMatureEconomic Analog Environ. Control Production Productivity Nutrient Cycling Diversity

21. For a sustainable economy.. It needs to be no growth or slow growth This is so we can maximize our use of resources “Growth” can occur via other mechanisms –Diversification –Down sizing to mid-sized rather than huge companies –Use of renewable energy sources

22. For a sustainable economy… Must slow population growth Finally, remember that scarcity is the “enemy” of economic well-being –Wise resource use and reuse