1. Notes for Chapter 2 ECON 2390

2. 2 Economy and Environment The economy operates within a physical environment All animal and plant activity influences the “environment.” A buffalo herd of 100,000 animals had a significant impact on grasslands. In fact, to suggest that the “environment” is a canvass on which human activity occurs, suggests that the natural state is a blank page, which does not make much sense. The key idea is that human activity has shifted the natural order through the release of by-products and residuals that may compromise future development.

3. 3 R d p + R d c = M = G + R p – R r p – R r c

4. 4 Reduction of M Reduce G (consume less) Reduce population (no experience with no growth) Limit consumption (new technologies may support less residual and discharge) Reduce R p (residuals from production) New technology Shift composition of goods Increase (R r p + R r c ) (increase recycling – producer and consumer)

5. 5 Laws of thermodynamics First Law – Law of the conservation of energy M = R d p +R d c To reduce the total volume of residuals, the quantity of raw materials used much decline

6. 6 Laws of thermodynamics Second Law – Entropy Energy levels constantly declines Burning gasoline is converted into motion (energy) and by-products The materials balance must hold in the long-run.

7. 7 The history of human activity often leaves traces that can last a very long time. The use of nuclear energy leaves a legacy in the form of waste that endures (Half life) Agricultural pesticides and herbicides can remain in water and soil systems. In urban areas, previous industrial sites leave soil and groundwater contamination (termed “brown fields”)