Unit 3-Conservation/Global Change—Chapter 24: Economics, Environment, and Sustainability
1).Economic Systems and Sustainability
a).An economic system produces and distributes goods and services by natural human,
and manufactured resources
b).Economic Resources: The Big Three
i).Natural Capital- produced by earth naturally
ii).Human Chapter Capital- physical or mental labor
iii).Manufactured Capital- tools, factories, machines
c). Market Economic Systems: Pure Free-Market & Capitalistic Models
i).Ideal or model in which buyers and sellers interact in markets without
government interference
ii).Competitive interactions of demand and supply; price and quantity determine
the equilibrium point of a product per unit
iii).Marginal cost is the additional cost of producing one more unit
A).8 marginal benefit is increase from that extra production
d).Government Intervention in Market Economic Systems: Correcting Market Failures
i).Markets often work well in guiding the production of private goods
ii).private goods are unreliable for adequate levels of public services
iii).Without government Intervention risks;
iiii).monopolies, single corporations control over goods and processes
iiiii).harmful effects of products & production on human & environmental health
iiiiii).Safety and protection of workers
e).Solutions: Environmentally Sustainable Economic Development
i). Neoclassical economists view earth’s natural capital as a subset or part of
human economic system
ii).ecological ecologists and environmental economist view economic systems as
subsystems of the biosphere that depend heavily on earths natural resources
iii).Ecological economists distinguish between unsustainable economic growth
and environmentally sustainable economic development
2).Valuing Ecological Services & Monitoring Environmental Progress
a).
Assigning Monetary Values to Resources not Traded in the Marketplace:
b).Ecological Pricing
i).Estimating non-use values not represented in market transactions
ii).existence value based on old-growth/ endangered
iii).aesthetic value based on monetary value
iiii).bequest or option value based on individual willingness
c).Mitigation cost- how much it would take to offset any environmental damage
d).Estimate the willingness to pay by polls, survey, popular demand method
e).Estimating the Future Value of a Resource (economics & ethics)
i).Discount rate- future value compared to present value
ii).inflation may reduce the value their future earnings on a resource
3).ethical concerns in determining how they use and manage such resources complicate
business, wages, and trade
a).Hidden Harmful Costs
b).All goods have internal or direct costs associated with producing them
i).additional costs for after the initial payment, ex. repairs, fuel, etc.
c).Indirect or external costs aren’t included in the market prices and affect others than
the buyer and seller
d).The harmful external costs aren’t included make buyers oblivious of the connections
they have to the harm
e).Estimating the Optimum Levels of Pollution Control and Resource Use
i).Optimum levels fluctuate in relation to the equilibrium points in products
ii).various levels for kinds of pollution
iii).as pollutants are removed the marginal cost increases
iiii).Optimum point, the cost of removing pollution can get higher than people are
willing to pay
f).Cost- Benefit Analysis
a).(CBA) tool for deciding how to control pollution and manage resources
i).Done by comparing estimated benefits and costs
ii).Monetary values complicate this system as individual views are of a wide
range
iii).Economist use simple guidelines to avoid complications
b).Environmental and Economic Indicators: Environmental Radar
i).(GDP) Gross domestic product (per capita) indicates a standardized method for
measuring economic outputs of nations
ii).Environmental scientists call for development and widespread use of new
indicators to help monitor environmental quality and human well-being
iii).Genuine Progress Indicator
iiii).that adds to the GDP items concerning environmental quality are not counted
in the market place
c).and subtracts GDP costs of things that lead to lower quality of resources
3). Economic Tools for Improving Environmental Quality
a).Full-Cost Pricing
i).creating an environmentally honest market system
ii).requires including the harmful indirect or external costs
iii).would encourage producers to pollute less and invent more efficient resources
and productions
iiii).The benefits this has is rejected for 2 major reasons:
A).harmful products & wasteful goods would go out of business
B).difficult to price the environmental and health costs
b).Eco-Labeling:
i).Informing consumers to buy conspicuously
ii).product eco- labeling can encourage companies to develop greener products
c).Replacing Environmentally Harmful Subsidies with Environmentally Beneficial
Subsidies
i).To encourage full-cost pricing nations could undergo phasing out
environmentally harmful subsidies
A)Some countries phase out subsidies like coal for fossil fuels and
nuclear power
B).Governments could also phase in taxes and environmentally beneficial
subsidies
d).Shifting Taxes from Wages and Profits to Pollution & Waste
i).Green Taxes or Eco Taxes is a way to discourage pollution and resource waste
ii).Industries claim taxes will reduce their competitiveness
A).Analysts claim there is three requirements to avoid
15-20 yrs for businesses to draft plans for future
mechanism to ensure that revenues improve environment
e).Using Environmental Laws & Regulations to Encourage Innovation
i).Regulation is a form of government intervention in the marketplace
A).to control or prevent pollution
ii).Innovation-Friendly regulations can motivate environmentally safe processes
and create jobs
A).also saves money on pollutant clean ups, or harmful disputes
f).Using the Marketplace to Reduce Pollution & Resource Use
i).government grants companies a certain number of tradable pollution &
resource-use permits and sets limits or caps
g).Green Economics
i).for more sustainable economies focus on shifting from the current material-flow
economy to a service-flow economy
A).customers eco-lease services that goods could provide document
services, chemical services, mobility services
4).Reducing Poverty to Improve Environmental Quality & Human well being
a).Distribution of the world’s wealth
i).Poverty is the inability to meet one’s basic economic needs
ii).Poverty has numerous harmful health and environmental effects
iii).The poorest of the rural poor depend on the environment for 80% of their
basic needs
b).Solutions: Reducing Poverty
i).worldwide cooperative efforts to eradicate extreme poverty and stabilize
population
ii).forgiving the international debts of poor countries
iii).easing international aid
iiii).small individuals loans
iiiii).increase nonmilitary government and private aid to developing countries
iiiiii).mount a massive global effort to combat malnutrition
c).Solutions: Achieving the Millennium Development Goals
i).in 2000, nations of the world meeting at the United Nations Millennium Summit
adopted stewardship goals
5).Making the Transition to more Environmentally Sustainable Economies
a).Making the transition to eco-Economies
i).“Leave the world better than you found it, take no more than you need,..”
ii).(EPI) Environmental Performance Index help evaluate the progress of 133
nations toward sustainability
b).Case study: The Netherlands
i).In 1989, implemented a National Environmental Policy Plan
ii).goal was 70-90% decrease in pollution
iii).task force of people in the industry, government, and citizens
A).8 areas of focus
iiii). result ranked 27 of 133 nations on the 2005 EP
c).Jobs, Profits, and the Environment
i).shifting to an eco-economy will require phasing out some old industries,
restriction other industries and creating new ones
ii).the cost of new research and development will be outweighed by the benefits
of more jobs
This chapter is about different economic systems, ecological services, and more. Some
economic systems are market economic systems and government intervention in market
economic systems. This chapter also explains some solutions to these problems. Valuing
ecological services includes estimating nonuse values like existence value, aesthetic value, and
option value. This chapter also includes some explanation of some environmental laws and
regulations like the innovation-friendly regulation for example.