1. Economics and Environmental Policy

2.  Economics – the study of how resources are converted into goods and services and how these goods and services are distributed and used  Goods – manufactured materials  Services – work that someone does for a company

3.  Types of Economies  Centrally planned economy – the government decides what is made  Free market economy – individuals decide what is manufactured  Mixed economy – both the government and the individuals play a role in making decisions  Supply  The amount of product offered for sale at a give price  Demand  The amount of product people will buy at a given price

4.  Supply and Demand are Related  The greater the supply, the lower the demand Drives cost down (Great Depression) More crops than the people wanted; overfarming  The smaller the supply, the greater the demand Drives cost up (new release of an IPhone) More people wanted the new Iphone  The ideal situation is that supply and demand are at an equilibrium.

5. Supply and Demand Curve

6.  Cost-Benefit Analysis  Decision makers compare what they will sacrifice and gain by action If costs out weigh the benefits, the idea is usually revised and/or abandoned. If the benefits outweigh the costs, the idea is often pursued. Not all costs and benefits is easily identified or defined

7.  Non-Market Values  Values not usually included in the price of goods or services Tend to be exploited by people Beachfront property Real estate on a golf course Skiing on mountains Price is set by the following Surveys – people are asked how much they would be willing to pay for clean beaches or the preservation of a beautiful view Comparisons made of similar homes in different areas,where one overlooks a wooded area  Could estimate the price of the wooded area

8. Non-Market Value the worth we attach to things.. Use valueThat we use directly such as a river for boating Option valueThat we do not use but may use later, such as timber from an uncut forest. Aesthetic valueThat we appreciate for their beauty or emotional appeal Cultural valueThat sustain or help define our culture Scientific valueThat may be the subject of scientific research Educational value That may teach is about ourselves and the world Existence valueSimply because they exist, even though we may never experience them directly, such as animals in far-off places

9.  Market Failure – markets to not consider the environment’s positive or negative effects on economies  Example A chemical company emits pollution through its smokestacks, which in turn settle on the foliage, damaging it The company usually does not pay for the clean-up, the tax payers do  The government has proposed incentives to companies to conserve resources and reduce pollution

10.  Ecolabeling – manufactures of certain products explain on their labels how the products are grown, harvested, or manufactured  Products with ecolabels are manufactured with processes that do not harm the environment

11.  Corporate Response  Corporations are trying to update their image by showcasing how they are “environmentally friendly” Citizens Bank Donate money every time somebody uses a check card  Reduces the amount of paper by not provided a receipt

12.  What is Environmental Policy?  Policy – consists of a formal set of general plans and principles for addressing problems and guiding decision making  Environmental policy – consists of general plans and principles to address the interactions between humans and the environment Aims to protect quality, resources, resource sharing in the environment  Government, citizens, and other organizations are part of the policy making process.

13.  Branches of Government  Legislative – composed of the Senate and House of Representatives Propose and introduce laws  Executive – composed of the President Approve (enacted) or reject (vetoed) law the proposed by the legislative branch  Judicial – composed of the Supreme Court and lower courts Interprets the laws

14.  History of US Environmental Policy  The First Period (1780’s to late 1800’s) Most policy dealt with public management Western expansion cost millions for Native Americans  The Second Period (late-1800’s to mid-1900’s) Policy to deal with the environmental problems from Western expansion  The Third Period (mid- to late-1900’s) Increased awareness of environmental problems caused a further shift in public policy

15.  Modern U.S. Environmental Policy  National Environmental Policy Act NEPA required an Environmental Impact Statement (EIS) before the government made any decision affecting the environment  Environmental Protection Agency Oversees regulation of water quality, air pollution, and solid waste  Other Important Laws Federal Water Pollution Control Acts of 1948 and1972 Clean Water Act of 1977  Post-1980 Backlash against environmental policies; recent resurgence

16.  International Environmental Policy  The United Nations 50 nations founded the UN in 1945 Purpose to promote peace and solve the nations’ problems  European Union 27 member nations Formed after WWII with the goal to promote economic and social progress

17.  International Environmental Policy  The World Trade Organization (WTO) Established in 1995 Promotes and enforces free trade Fair trade is based on the principle of equity for producers and buyers of goods (for example: coffee)  World Bank Established in 1944 Provides credits, loans, and grants for projects that will improve living standards in different countries  Non-Governmental Organizations Greenpeace, Population Connection, and Conservation International Contribute funding, expertise, and research

18.  Approaches to Environmental Policy  Command and Control approach Government sets rules and threatens punishment for violations Tax Breaks and Subsidies Lowering taxes encourages businesses to comply with environmental policy Subsidy is a giveaway of cash or public resources to encourage a particular activity or lower the price of a product Green Taxes Taxes imposed on companies that participate in activities that product harmful products for the environment

19.  Approaches to Environmental Policy  Cap-and Trade The government determines the amount of pollutants it will allow and issues a permit for polluters to emit a certain fraction of that amount  Local Incentives Local governments may charge residents for waste disposal based on the waste they generate Rebates may be given for energy-efficient measures or appliances

20.  The Environmental Policy Process  Identify the problem Clearly identify an environmental problem through curiosity, observation, recordkeeping, and an awareness of the relationship between people and the environment  Identify causes Identify causes of the problem through scientific research  Envision a solution Proposing solutions to environmental problems

21.  Get Organized  Organizations are more effective than individuals  Gain Access  Lobbying involves efforts to influence an elected official into supporting a specific interest  Help a Solution become policy  Prepare a bill that describes the desired policy