MILLER/SPOOLMAN
LIVING IN THE ENVIRONMENT
17TH
Chapter 23
Economics, Environment,
and Sustainability
Case Study: Making Microloans
to the Poor (1)
• 1983: Muhammad Yunus – won the Nobel Peace Prize in 2006
• Established Grameen (Village) Bank in Bangladesh
• Provides microloans; mostly to women
• Can borrow $50-$500 with very low interest rates to help
improve their life style – planting crops, starting a small
business, etc.
• Half of borrowers eventually live above the poverty line
within 5 years of receiving the loan.
• Microloans have spread to 58 countries and helped over 133
million people.
Muhammed Yunus with Nobel Prize
Fig. 23-1, p. 613
Economic Systems Are Supported by Three
Types of Resources
• Economic systems are supported by
• Natural capital – resources and services provided by
the earth
• Human capital - human resources including physical
and mental talents that provide labor, organizational
and management skills and innovation.
• Manufactured capital - manufactured resources such
as machinery, equipment and factories.
Three Types of Resources Are Used to
Produce Goods and Services
Fig. 23-2, p. 615
Market Economic Systems Depend on
Interactions between Buyers and Sellers (1)
• True free market system • All economic decisions based on interactions between
supply, demand and price.
• No company or group controls prices of a good or
service
• Market prices include all direct and indirect costs (fullcost pricing)
• Consumers have full information about beneficial and
harmful environmental effects of goods and services
• Real world • Tax breaks, Subsidies, Trade barriers, Withholding of
negative information
Economic Growth and Economic
Development
• Economic growth
• Increased capacity to supply goods and services
• Requires increased production and consumption
• Requires more consumers
• Economic development
• Improvement of living standards
• Can we have environmentally sustainable economic
development?
Governments Intervene to Help Correct
Market Failures
• An important example of a market failure is its
inability to prevent degradation of open-access
resources (clean air, open ocean).
• Public services
•
•
•
•
•
Environmental protection
National security
Police and fire protection
Safe food and water
Provided by government because private companies
can’t or won’t
Economists Disagree over Natural Capital,
Sustainable Economic Growth (2)
• Ecological models’ three assumptions
1. Resources are limited and shouldn’t be wasted
2. Encourage environmentally beneficial and
sustainable forms of economic development
3. Full-cost pricing needed to take into account
harmful environmental and health effects of some
goods and services
• Environmental economists take middle ground
between classical and ecological economists
Protecting Natural Capital
• Estimating the values of the earth’s natural capital
• Estimate nonuse values
• Existence value
• Aesthetic value
• Bequest value, option value
Cost-Benefit Analysis Is a Useful
but Crude Tool
• Cost-benefit analysis follows guidelines
•
•
•
•
State all assumptions used
Include estimates of the ecological services
Estimate short-and long-term benefits and costs
Compare the costs and benefits of alternative courses
of action
• Always uncertainties
Most Things Cost a Lot More
Than We Might Think
• Market prices do not include most of the indirect or
external costs
• Direct and indirect costs of a car –
• We pay for the production, materials, labor and
shipping.
• We pay to run it with gasoline, maintenance and
repair.
• We do not account for the external costs extraction of
materials, production of wastes, disturbing land,
polluting air and water, etc.
• Should indirect costs be part of the price of goods?
We Can Include Harmful Environmental Costs in
the Prices of Goods, Services
• Environmentally honest market system – would
include harmful environmental and health costs of
goods and services in market prices.
• Why isn’t full-cost pricing more widely used?
1. Many businesses would have to raise prices and
would go out of business
2. Difficult to estimate environmental and health costs
3. Businesses have strong influence on government –
preferential regulations, tax breaks, subsidies
Reward Environmentally Sustainable
Businesses
• Phase out environmentally harmful subsidies and tax
breaks
• Phase in environmentally beneficial subsidies and tax
breaks for pollution prevention
• Political difficulties – Ex. Subsidies for fossil fuels and
nuclear power companies totaled $56 billion in 2006.
These powerful companies are able to lobby to
continue their breaks and lobby against subsidies for
more environmentally beneficial competitors.
Individuals Matter: Ray Anderson
• CEO of Interface, largest commercial manufacturer
of carpet tiles. He was inspired to develop the
nation’s first totally green corporation.
• Goals
• Zero waste, Greatly reduce energy use, Reduce fossil
fuel use, Rely on solar energy, Mimic nature
• How’s it working?
• Company has grown and profits have increased
Ray Anderson
Fig. 23-A, p. 626
The Gap between the Rich and the
Poor Is Getting Wider
• Poverty
• 1.4 billion people live on less than $1.25 per day
• Can we reduce poverty?
• South Korea and Singapore reduced poverty by:
• Education, Hard work, Discipline, Attracted investment
capital
• Important measures include:
• Combat malnutrition and infectious diseases, Universal
primary school education, Stabilize population growth,
Reduce total and per-capita ecological footprints, Large
investments in small-scale infrastructure
Make Money and Create Jobs by Shifting to
an Eco-Economy
• Hawken, Brown, and other environmental business
leaders
•
•
•
•
•
Transition to environmentally sustainable economies
Some companies will disappear
New jobs will be created
Economic succession
Green jobs increase
Solutions: Principles for Shifting to a More
Environmentally Sustainable Economy
Fig. 23-14, p. 631
Solutions: Environmentally Sustainable
Development
Fig. 23-15, p. 632
Green Careers
Fig. 23-16, p. 633
MILLER/SPOOLMAN
LIVING IN THE ENVIRONMENT
Chapter 24
Politics, Environment,
and Sustainability
17TH
Denis Hayes—A Practical Environmental
Visionary
• Taught people to pay attention to ecological
principles in deciding what policies they support and
taking political action.
• Bullitt Foundation in Seattle
• Focuses on urban ecological issues and restoring and
protecting ecosystem services in the surrounding
environment
• Organized first Earth Day in 1970
• Involved teach-ins and demonstrations on pollution,
toxic waste, nuclear power, etc.
• More than 20 million people took part.
Democracy Does Not Always Allow
for Quick Solutions
• Politics have harmful and beneficial effects on the
environment.
• Special-interest groups pressure the government
• Profit-making organizations
• Nongovernmental organizations (NGOs)
• Politicians focus on problems with short-term
effects, not long-term
• Three branches of government
• Legislative
• Executive
• Judicial
The Policy Life Cycle
Fig. 24-2, p. 639
Case Study: Managing Public Lands in the
United States—Politics in Action (1)
• 35% of the U.S., ¾ in Alaska, 1/5 in West
• Federal public land
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•
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U.S. Forest Service: National Forest System
Bureau of Land Management
U.S. Fish and Wildlife: National Wildlife Refuges
National Park System
National Wilderness Preservation System
Different restrictions for each
What Can You Do? Influencing
Environmental Policy
Fig. 24-8, p. 647
Environmental Law Forms the Basis for
Environmental Policy
• Environmental law
• Body of laws and treaties that broadly define what is acceptable
environmental behavior
• Most environmental lawsuits are civil suits
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•
•
•
•
Plaintiff
Defendant
Injunction
Class action suit
Negligence
U.S. Environmental Laws and Regulations Have
Been under Attack (1)
• Who opposes U.S. environmental laws?
• Some corporate leaders and other powerful people
• Some citizens who see threats to private property rights
• Some state and local officials who don’t like being
forced to implement federal laws and regulations
• Why the opposition?
• Environmental issues not as easy to see now
• Environmentalists as bearers of bad news
U.S. Environmental Laws and Regulations Have
Been under Attack
• Since 2000, environmental laws and regulations have
been weakened
• Prevent further weakening by
•
•
•
•
Repairing damage already done
Improve existing laws and regulations
Science-based environmental education
Organized bottom-up political pressure from
concerned citizens
Individuals Matter: Butterfly in a Redwood
Tree
• Julia Hill: Nonviolent civil disobedience
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•
•
•
2 Years in a redwood tree, named Luna
Protested cutting down these ancient trees
Did not save the surrounding forest
Her message: protect biodiversity
Julia Butterfly Hill
Fig. 24-B, p. 653
MILLER/SPOOLMAN
LIVING IN THE ENVIRONMENT
17TH
Chapter 25
Environmental Worldviews,
Ethics, and Sustainability
Environmental Worldviews, Ethics, and
Sustainability
• Education is an important component of living
sustainably.
• Education includes understanding ecosystems,
developing environmental literacy, and viewing the
earth as a complex, interconnected system.
• We can live sustainably through pollution
prevention, waste prevention, species protection,
and environmental restoration.
Test Study Guide
• Terms: natural capital, market price equilibrium point, existence value,
SLAPP lawsuit
• What does the world bank say is the % of people living in poverty?
• % of women receiving microloans from Grameen Bank
• How do governments intervene in markets?
• Examples of economic goods
• From figure 23-5 – negative and positive output examples.
• The yearly ecological services provided by the earth’s forests are
estimated at $?
• Costs associated with a car – direct and indirect.
• What is full-cost pricing? Why is it not widely used?
• Examples of regulations, drawbacks of environmental fees.
• Subsidies and tax breaks for environmentally harmful businesses cost the
taxpayers how much per year?
Test study guide
• What is Ray Anderson known for?
• What is the trickle-down effect? Gap between rich and poor has done
what since 1980?
• Who is Denis Hayes?
• 4 stages for public policy
• Why does the US have 3 branches of government? And what do each do?
• What % of US land does government manage? Know the different
regulations for each type.
• Type of suits most environmental laws are considered.
• Story of Diane Wilson
• What was learned fomr the Biosphere 2 experiment?
• Short Answer – Environmental implications of the gap between rich and
poor getting larger, Biosphere 2 experiment, should the need for getting
“more and more goods” be considered an addiction?