BIO 240 - Chapter 5 (EXAM 1 and 2)
BIO 240 - Chapter 5 (EXAM 1 and 2) BIO 240
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This 14 page Class Notes was uploaded by Jenna Larson on Saturday October 8, 2016. The Class Notes belongs to BIO 240 at Central Michigan University taught by Dr. Deric Learman in Fall 2016. Since its upload, it has received 2 views. For similar materials see Conservation of Natural Resources in Biology at Central Michigan University.
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Date Created: 10/08/16
9/8/16 Chapter 5 Economics, Policy, and Sustainable Development Lecture Presentations prepared by Nash Community College © 2015 Pearson Education, Inc. This lecture will help you understand: • How economies exist within the environment and rely on ecosystem services • Principles of classical and neoclassical economics • Valuation of ecosystem services and full cost accounting • Environmental policy and the role of science in policymaking • History of U.S. environmental policy and laws © 2015 Pearson Education, Inc. Central Case Study: Costa Rica Values Its Ecosystem Services • In 1996, Costa Rican government began the PSA program (Payment for Environmental Services) • Farmers and ranchers were paid to preserve forests • Funds for the program were collected from people and companies that benefit from the ecosystem services the forests provide © 2015 Pearson Education, Inc. 1 9/8/16 Central Case Study: Costa Rica Values Its Ecosystem Services (cont’d) • Forest cover rose from 17% in 1983 to 52% today • Ecotourism brings in $2 billion each year • Costa Rica places economic value on nature and understands the importance of sustainable development © 2015 Pearson Education, Inc. Economics and the environment • • • Goods: manufactured materials that are bought, and • Services: work done for others as a form of business • • Studies how people use resources to provide goods and services in the face of demand © 2015 Pearson Education, Inc. Economies rely on goods and services from the environment • Economies receive inputs from the environment, process them, and discharge outputs into the environment © 2015 Pearson Education, Inc. 2 9/8/16 Frequently Asked Question • Doesn’t environmental protection hurt the economy? © 2015 Pearson Education, Inc. Economic theory moved from “invisible hand” to supply and demand • • Believed that self-interested economic behavior could benefit society if laws were followed and markets were competitive • • When people pursue economic self-interest in a competitive marketplace … • • Society benefits • © 2015 Pearson Education, Inc. Economic theory moved from “invisible hand” to supply and demand (cont’d) • • Examines the psychological factors that underlie consumer choices • • Supply vs. demand • Conflict between buyers and sellers leads to …. • © 2015 Pearson Education, Inc. 3 9/8/16 Cost-benefit analysis: evaluating decisions • • Costs of a proposed action are compared to benefits that result from the action • • But not all costs and benefits can be easily identified, defined, or quantified • It is easy to quantify the cost of pollution-reducing equipment or jobs created by an activity • © 2015 Pearson Education, Inc. Neoclassical economics has environmental consequences • • Enormous material wealth has been created • Assumptions of neoclassical economics contribute to environmental degradation: • • All costs and benefits are internal • • All growth is good © 2015 Pearson Education, Inc. Assumption: resources are replaceable • Economic models treat natural resources and human resources as substitutable and interchangeable • • Some resources can be replaced, but some cannot • • © 2015 Pearson Education, Inc. 4 9/8/16 Assumption: costs and benefits are internal • • Affect people other than buyers or sellers • Include health problems, resource depletion, property damage • • Environmental policy addresses external costs © 2015 Pearson Education, Inc. Assumption: costs and benefits are internal (cont’d) • People who do not participate in a transaction suffer from external costs (health problems, property and aesthetic damage, stress, lower real estate values) © 2015 Pearson Education, Inc. Assumption: discount long-term effects • • • Short-term costs and benefits are more important than long-term costs and benefits • Present conditions are more important than future ones • We ignore the long-term consequences of policy decisions • Environmental problems unfold gradually • © 2015 Pearson Education, Inc. 5 9/8/16 Assumption: all growth is good • • It creates opportunities for poor to become wealthier • Progress is measured by economic growth • Endless growth cannot be sustained, because resources to support growth are ultimately limited © 2015 Pearson Education, Inc. How sustainable is economic growth? • • Americans are in a frenzy of consumption • • Increased inputs (labor, natural resources) • Improvements in efficiency of production (technology, ideas, equipment) • • Resources are finite or have limited rates of extraction • Technological innovation can push back limits, but not forever © 2015 Pearson Education, Inc. How sustainable is economic growth? (cont’d) • • Economies grow by increasing efficiency to attain sustainability within our current economic system • Environmental economists developed methods to tackle the problem of external costs and discounting • • • Ecological economists advocate steady-state economies • Economies that mirror natural ecological systems • • Quality of life increases through technological advances © 2015 Pearson Education, Inc. 6 9/8/16 We can assign monetary value to ecosystem goods and services • • Surveys determine how much people are willing to pay to protect or restore a resource • • Calculate the cost to restore natural systems, replace systems with technology, or clean up pollution © 2015 Pearson Education, Inc. Markets can fail • Market failure occurs when markets ignore • • The negative effects of activities on the environment or people (external costs) • Government intervention counters market failure through • • • Designing economic incentives to promote fairness, conservation, and sustainability © 2015 Pearson Education, Inc. Environmental policy • Once a society agrees that a problem exists, it may persuade its leaders to solve it through policy • • A formal set of general plans and principles to address problems and guide decision making • • Policy made by governments at local, state, federal, or international level • • • Regulates resource use or reduces pollution to promote human welfare and protect resources © 2015 Pearson Education, Inc. 7 9/8/16 Policy addresses environmental problems • Science, ethics, and economics help formulate policy • • Ethics and economics clarify how society can address problems • Government interacts with citizens, organizations, and the private sector © 2015 Pearson Education, Inc. Policy addresses environmental problems • If this is the plan, then what are some issues? © 2015 Pearson Education, Inc. Environmental policy addresses issues of fairness and resource use • • Not long-term social or environmental stability • • Reasons for governments to intervene in market • • National defense, health care, education • • For elderly, the poor, victims of natural disasters • Eliminate unfair advantages held by single buyers/sellers • © 2015 Pearson Education, Inc. 8 9/8/16 Environmental policy addresses issues of fairness and resource use (cont’d) • Environmental policy tries to: • • Safeguard environmental quality and conserve natural resources • • • Publicly accessible resources become overused and degraded when unregulated • Forests, fisheries, clean air, clean water, global climate • © 2015 Pearson Education, Inc. Various factors can obstruct environmental policy • Perception that environmental protection means economic sacrifice • © 2015 Pearson Education, Inc. In class activity • Pick a resource, and write a persuasive paragraph to defend the stance that conservation does not mean sacrificing economic growth © 2015 Pearson Education, Inc. 9 9/8/16 Early U.S. environmental policy promoted development • From 1780s to the late 1800s, laws promoted settlement and extraction of resources © 2015 Pearson Education, Inc. Early U.S. environmental policy promoted development (cont’d) • General Land Ordinances of 1785 and 1787: encouraged people to move west • Settlement increased prosperity for citizens • • • © 2015 Pearson Education, Inc. The second wave of U.S. policy encouraged conservation • • Laws addressed problems caused by westward expansion and encouraged conservation • Congress created Yellowstone National Park, the world’s first national park, in 1872 • • Understood that the nation’s resources are exhaustible and require protection • • The 1964 Wilderness Act preserves pristine land © 2015 Pearson Education, Inc. 10 9/8/16 The third wave responded to pollution • In the 20th century, people were better off economically • • Rachel Carson’s Silent Spring (1962) described the ecological and health effects of pesticides and chemicals © 2015 Pearson Education, Inc. The third wave responded to pollution (cont’d) • Ohio’s Cuyahoga River was so polluted that it caught fire in the 1950s and 1960s • • Today, U.S. health is better protected and the air and water are cleaner mainly because of policies of the 1960s © 2015 Pearson Education, Inc. Major U.S. Environmental Protection Laws (1963–1980) © 2015 Pearson Education, Inc. 11 9/8/16 Environmental policy advances today on the international stage • Other nations with innovative policies • Germany • Impressive strides with solar energy • Sweden • Progressive environmental policies • Costa Rica and Bhutan • Restoring natural capital • China • Renewable energy, reforestation, and pollution control • Current environmental policies • Sustainability, sustainable development, global climate change © 2015 Pearson Education, Inc. Approaches to environmental policy • Environmental policy has three major approaches: • • • © 2015 Pearson Education, Inc. Green taxes discourage undesirable activities • • Internalizing harmful external costs makes them part of the cost of doing business • • Taxes environmentally harmful activities and products • Businesses reimburse the public for damage they cause • • Companies have financial incentives to reduce pollution with freedom to decide how to do so © 2015 Pearson Education, Inc. 12 9/8/16 Emissions trading can produce cost-effective results • Emissions trading: a government-created market in permits for an environmentally harmful activity • • Cap-and-trade emissions trading system • • Permits let polluters emit some amount of pollution • • The government can set lower emission levels • Companies have an economic incentive to reduce emissions © 2015 Pearson Education, Inc. Market incentives work at the local level • Municipalities charge residents for waste disposal • • • Some cities give rebates for buying water-efficient appliances • Power utilities give discounts to consumers buying efficient lightbulbs and appliances © 2015 Pearson Education, Inc. Sustainable development • • Economic progress that maintains resources for the future • Development that “meets the needs of the present without sacrificing the ability of future generations to meet their own needs” (United Nations definition) • Triple bottom line of sustainable development • • • © 2015 Pearson Education, Inc. 13 9/8/16 Conclusion • Environmental policy is a problem-solving tool • • Command-and-control legislation and regulations • • • Environmental and ecological economists quantify the value of ecosystem services • Sustainable development depends on economic, social, and environmental well-being and reinforcement to provide truly sustainable solutions © 2015 Pearson Education, Inc. 14
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