1. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Environmental ethics Environmental ethics = application of ethical standards to relationships between human and non-human entities Hard to resolve; depends on the person’s ethical standards Depends on the person’s domain of ethical concern Should we conserve resources for future generations? Is it OK for some communities to be exposed to excess pollution? Should humans drive other species to extinction? Is is OK to destroy a forest to create jobs for people?

2. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Economics Friction occurs between people’s ethical and economic impulses Is there a trade-off between economics and the environment? Generally, environmental protection is good for the economy Economics studies how people use resources to provide goods and services in the face of demand Most environmental and economic problems are linked Root “oikos” gave rise to both ecology and economics

3. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Types of modern economies Economy = a social system that converts resources into Goods: manufactured materials that are bought, and Services: work done for others as a form of business Subsistence economy = people get their daily needs directly from nature; they do not purchase or trade Capitalist market economy = buyers and sellers interact to determine prices and production of goods and services Centrally planned economy = the government determines how to allocate resources Mixed economy = governments intervene to some extent

4. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Conventional view of economics Conventional economics focuses on production and consumption Ignores the environment The environment is an external “factor of production”

5. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Environmental view of economics Human economies exist within, and depend on, the environment Without natural resources, there would be no economies

6. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Environmental systems support economies Ecosystem services = essential services support the life that makes economic activities possible * Soil formation * Pollination * Water purification * Nutrient cycling * Climate regulation * Waste treatment Economic activities affect the environment Deplete natural resources Produce too much pollution

7. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Classical economics Competition between people free to pursue their own economic self-interest will benefit society as a whole (Adam Smith, 1723-1790) The market is guided by an “invisible hand” This idea is a pillar of free-market thought today It is also blamed for economic inequality Rich vs. poor Critics think that market capitalism should be restricted by government

8. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Neoclassical economics Examines the psychological factors underlying consumer choices Market prices are explained in terms of consumer preferences Buyers vs. sellers The “right” quantities of a product are produced The market favors equilibrium between supply and demand

9. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Neoclassical economics Enormous wealth and jobs are generated Environmental problems are also created Assumptions of neoclassical economics: Resources are infinite or substitutable Costs and benefits are internal Long-term effects are discounted Growth is good

10. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Assumption: Resources are infinite Economic models treat resources as substitutable and interchangeable A replacement resource will be found But, Earth’s resources are limited Nonrenewable resources can be depleted Renewable resources can also be depleted For example, Easter Islanders destroyed their forests

11. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Costs and benefits are experienced by the buyer and seller alone Do not affect other members of the society Pricing ignores social, environmental or economic costs Externalities = costs or benefits involving people other than the buyer or seller External costs External costs = borne by someone not involved in a transaction Human health problems Resource depletion Hard to account for and eliminate How do you assign monetary value to illness? Assumption: Costs and benefits are internal

12. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings A future event counts less than a present one Discounting = short-term costs and benefits are more important than long-term costs and benefits Policymakers ignore long term consequences of our actions Discourages attention to resource depletion and pollution Economic growth is necessary to maintain employment and social order Promoting economic growth creates opportunities for poor to become wealthier Progress is measured by economic growth Assumptions: Long-term effects are discounted and growth is good

13. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings “More and bigger is better” The dramatic rise in per-person consumption has severe environmental consequences Is the growth paradigm good for us?

14. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Is economic growth sustainable? Affluenza = material goods do not always bring contentment Uncontrolled economic growth is unsustainable Technology can push back limits, but not forever More efficient resource extraction and food production perpetuates the illusion that resources are unlimited Many economists believe technology can solve everything

15. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Other types of economists Ecological economists = civilizations cannot overcome environmental limitations Steady state economies should mirror natural ecological systems Calls for revolution Environmental economists = unsustainable economies have high population growth and inefficient resource use Modify neoclassical economics to increase efficiency Calls for reform

16. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings A steady state economy As resources became harder to find, economic growth slows and stabilizes (John Stuart Mill, 1806-1873) We must rethink our assumptions and change our way of economic transactions This does not mean a lower quality of life Economies are measured in various ways Gross Domestic Product (GDP) = total monetary value of final goods and services produced Does not account for nonmarket values Pollution increases GDP

17. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings GPI: An alternative to the GDP Genuine Progress Indicator (GPI) = differentiates between desirable and undesirable economic activity Positive contributions (i.e. volunteer work) not paid for with money are added to economic activity Negative impacts (crime, pollution) are subtracted In the U.S., GDP has risen greatly, but not GPI

18. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings More “green accounting” indicators Net Economic Welfare (NEW) = adjusts GDP by adding the value of leisure time, while deducting environmental degradation Sustainable Economic Welfare (ISEW) = based on income, wealth distribution, resource depletion These indicators give a more accurate indication of a nation’s welfare Very controversial, hard to practice

19. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Valuing ecosystems goods and services Our society mistreats the very systems that sustain it The market ignores/undervalues ecosystem values Nonmarket values = values not included in the price of a good or service

20. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Assigning value to ecosystem services Contingent valuation = uses surveys to determine how much people are willing to pay to protect or restore a resource Measures expressed preferences But, since people don’t really pay, they may overinflate values Revealed preferences = revealed by actual behavior Time, money, effort people spend Measuring the actual cost of restoring natural systems The global value of all ecosystem services = $42 trillion!

21. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Markets can fail Market failure = markets do not account for the environment’s positive impacts Markets do not reflect the negative effects of activities on the environment or people (external costs) Government intervention counters market failure Laws and regulations Green taxes = penalize harmful activities Economic incentives to promote conservation and sustainability

22. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Ecolabeling addresses market failures The market can be used to counter market failure Create markets in permits Ecolabeling = tells consumers which brands use sustainable processes A powerful incentive for businesses to switch to better processes –“Dolphin safe” tuna Socially responsible investing in sustainable companies

23. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Corporations are responding to concerns Industries, businesses, and corporations can make money by “greening” their operations Local sustainably oriented businesses are being started Large corporations are riding the “green wave” of consumer preference for sustainable products Nike, Gap Be careful of greenwashing, where consumers are misled into thinking companies are acting sustainably

24. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Why are environmental laws unpopular? Environmental laws are challenged, derided, and ignored Environmental policy involves government regulations Businesses and individuals view laws as overly restrictive and unresponsive to human needs Most environmental problems are long-term processes Human behavior is geared toward short-term needs News media have short attention spans Politicians act out of their own short-term interest

25. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Results from actions of the three branches of government Legislative branch = creates statutory law Executive branch = enacts or vetoes legislation -Issues executive orders Judicial branch = interprets laws Administrative agencies = the “fourth branch” -Established by the president or Congress Framework of U.S. policy

26. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Early U.S. environmental policy Involved management of public lands, 1780s to the late 1800s Promoted settlement Extraction of natural resources Increased prosperity Relieved crowding in Eastern cities Displaced millions of Native Americans People believed that land was infinite and inexhaustible

27. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings The second wave of U.S. policy Addressed impacts caused by the first wave Public perception and government policy shifted Mitigated environmental problems associated with westward expansion Yellowstone National Park, the world’s first national park, opened in 1872 Other protected areas were created National wildlife refuges, parks, and forests Reflected a new understanding that the West’s resources were exhaustible and required legal protection

28. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings The third wave of U.S. environmental policy Mid-to late-20th century Better off economically But dirtier air, dirtier water, and more waste and toxic chemicals Increased awareness of environmental problems shifted public priorities and policy 1962: Silent Spring (by Rachel Carson) described the negative ecological and health effects of pesticides and industrial chemicals

29. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Modern U.S. environmental policy The Cuyahoga River was polluted with oil and industrial waste It caught fire in the 1950s and 1960s Today, public enthusiasm for environmental protection remains strong The majority of Americans favor environmental protection In April, millions of people celebrate Earth Day

30. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings The National Environmental Policy Act (NEPA) 1970 began the modern era of environmental policy Created the Council on Environmental Quality -Requires an Environmental Impact Statement (EIS) for any federal action that might impact the environment NEPA forces the government and businesses to evaluate the environmental impacts of a project

31. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings The EPA shifts environmental policy Nixon created the Environmental Protection Agency (EPA) Conducts and evaluates research Monitors environmental quality Sets and enforces standards for pollution levels Assists states in meeting standards and goals Educates the public

32. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Significant environmental laws The public demanded a cleaner environment and supported tougher environmental legislation

33. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings The social context for policy can change Three factors converged to allow major advances in environmental policy in the 1960s and 1970s Wide evidence of environmental problems People could visualize policies to deal with problems The political climate was ripe, with a supportive public and leaders who were willing to act In recent years, the political climate has changed People felt burdened by environmental regulations Attempts have been made to roll back or weaken environmental laws

34. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Future environmental policies Will depend on having the American environmental movement reinvent its approach It needs to appeal to people’s core values Start showing why these problems are actually human issues and affect our quality life Future policies need to articulate a positive, inspiring vision for the future Currently, the United States has retreated from its leadership Other nations have increased their attention to environmental issues

35. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Six steps to making environmental policy Requires curiosity, observation, awareness

36. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Step 2 Involves scientific research and Risk assessment = judging risks a problem poses to health or the environment

37. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Step 3 Risk management = developing strategies to minimize risk Involves social or political action

38. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Step 4 Organizations are more effective than individuals But a motivated, informed individual can also succeed

39. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Step 5 Lobbying = spending time and money to influence a politician Environmental advocates are not the most influential lobbyists Political Action Committees (PACs) = raise money for political campaigns The revolving door = the movement of people between the private sector and government Intimate knowledge of an issue or conflict of interest?

40. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Step 6 Prepare a bill, or draft law, containing solutions Following a law’s enactment Administrative agencies implement regulations Policymakers evaluate the policy’s successes or failures The judicial branch interprets the law

41. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Science plays a role, but can be politicized Effective policy decisions are informed by scientific research Sometimes policymakers ignore science They let political ideology determine policy Scientists at government agencies have had their work suppressed or discredited -Their jobs were threatened When taxpayer-funded research is suppressed or distorted for political ends, everyone loses

42. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Government intervenes in a market economy Even in capitalist market economies, governments intervene to: Eliminate unfair advantages Provide social services Provide safety nets Manage the commons Mitigate pollution

43. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Approaches to Environmental Policy  Tax it  Subsidize it  Provide a tax break  Regulate it  Cap and trade  Tradable environmental permits  Ban it  Phase it out  Fines  Prohibit trade  Inspections

44. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Approaches to environmental policy Command-and-control approach: environmental policy sets rules or limits and threatens punishment for violators Heavy-handed Alternative approaches involve using economic incentives to encourage desired outcomes and use market dynamics to meet goals Most current environmental laws -Have resulted in safe, healthy, comfortable lives

45. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Marginal benefit and cost curves Cost-benefit analysis = the costs of a proposed action are compared to the benefits that result from the action Cost-benefit analysis If benefits > costs: pursue the action Not all costs and benefits can be identified Marginal benefit and cost curves determine an “optimal” level of resource use or pollution mitigation

46. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Costs of Pollution Control A situation: A company will produce 100 million $ in output but pollute a river. That same company can use workers to clean the pollution but only make 90 million $ and have a clean river. What will the company do????? Problem is there is no value on the clean river…. Only GNP is calculated…

47. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Economist’s View of Pollution If a product is made that harms the environment, that harm is not factored into the cost of the product. Hmmmmm, sounds a little irresponsible. Some sort of marginal cost needs to be associated with the product. Ex. Effect of the pollutant on human health. Ex. Effect of the pollutant on organisms within the environment.

48. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Marginal Cost of Pollution This is the added cost for all present and future members of society of an additional unit or pollution. Ex. Sulfur Dioxide Used in manufacturing and comes out of the atmosphere in acid rain.

49. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings What about stopping pollution? Marginal cost of pollution abatement: The amount of money needed to dispose of a pollutant in a non harmful way.

50. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings What is the optimal amount of pollution? (If there is such a thing?) If pollution exceeds the optimum amount of pollution –the harm done exceeds the cost to reduce it. If pollution is small it may cost too much to control the small amount.

51. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Flaws in Optimum Pollution 1. The true cost of environmental damage by pollution is too difficult to assess. 2. The risks of unanticipated environmental catastrophe are not taken into account in assessing the potential environmental damage of pollution.

52. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings So…………… How much is a scenic river worth???? Maybe more so to some people than others.

53. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Clean Water Act The Clean Water Act is a 1977 amendment to the Federal Water Pollution Control Act of 1972 Set the basic structure for regulating discharges of pollutants in the US The law gave EPA the authority to set water quality standards for industry and for all contaminants in surface waters Attain water quality levels that make these waterways safe to fish and/or swim in Restore and maintain the chemical, physical, and biological integrity of the nation's water The CWA makes it unlawful for any person to discharge any pollutant from a point source into navigable waters unless a permit (NPDES) is obtained The amounts and types of pollutants than can be discharged or allowed to run in to waters from watersheds are regulated Environmental Science ENSC 2800 - Pollution in the Bay-Delta

54. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Drawbacks of command-and-control Government actions may be well-intentioned but not informed Interest groups–people seeking private gain–unduly influence politicians Citizens may view policies as restrictions on freedom Costly and less efficient in achieving goals

55. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Widespread economic policy tools Tax breaks = encourage desirable industries or activities Subsidy = a government giveaway of cash or resources to encourage a particular activity Have been used to support unsustainable activities In 2003, $58 billion of taxpayer’s money was spent on 68 environmentally harmful subsidies such as building logging roads

56. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Another economic policy tool Green taxes = taxes on environmentally harmful activities Polluter pays principle = the price of a good or service includes all costs, including environmental degradation Gives companies financial incentives to reduce pollution But, costs are passed on to consumers

57. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Market permitting and incentives Permit trading = government-created market in permits Businesses buy, sell, trade these permits Emissions trading system = government-issued permits for an acceptable amount of pollution and companies buy, sell, or trade these permits with other polluters Cap-and-trade system = a party that reduces its pollution levels can sell this credit to other parties -Pollution is reduced overall, but does increase around polluting plants Companies have an economic incentive to reduce emissions

58. Copyright © 2008 Pearson Education, Inc., publishing as Pearson Benjamin Cummings Conclusion Environmental policy is a problem-solving tool Uses science, ethics and economics Conventional command-and-control approach Uses legislation and regulations Most common approach Market-based incentives Can be more complicated but can be less expensive