Economics, Environment, and Sustainability Mr. Clark BHS.
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Transcript of Economics, Environment, and Sustainability Mr. Clark BHS.
Key ConceptsKey Concepts
Economic systems Economic systems Economics and resource management Economics and resource management Monitoring economic and environmental
progress
Monitoring economic and environmental progress
Full-cost pricing Full-cost pricing
Shifting to environmentally sustainable economies
Shifting to environmentally sustainable economies
Effect and reduction of poverty Effect and reduction of poverty
Economic ResourcesEconomic Resources
CapitalCapital
Human resourcesHuman resources
Natural resourcesNatural resources
Physical resourcesPhysical resources
Production ofenergy-efficientfuel-cell cars
Forestconservation
No-tillcultivation
Solar cellfields
Communities ofpassive solarhomes
Waterconservation
Recycling, reuse,and composing
High speed trains
Bicycling
Wind farms
Landfill
Clusterhousingdevelopment
Recyclingplant
Underground CO2
storage usingabandoned oil wells
Deep seaCO2 storage
Economic SystemsEconomic Systems
Pure free-market economic systemsPure free-market economic systems
Demand, supply and priceDemand, supply and price
Market price equilibrium pointMarket price equilibrium point
Marginal costs and benefitsMarginal costs and benefits
Price inelasticityPrice inelasticity
Government involvement in marketsGovernment involvement in markets
Quantity
Pri
ce (
low
to
hig
h)
Demand curve Supplycurve
Quantitydemanded
Quantitysupplied
Surplus If the price is toohigh, more oil is
available than buyersare willing to buy
Quantitysupplied
Quantitydemanded
At this market equilibriumprice, the quantity of oil thatsuppliers are willing to sell is
the same as the quantitybuyers are willing to buy
If the price is too lowbuyers want to buy more
than suppliers arewilling to sell
Shortage
Neoclassical vs. Ecological EconomistsNeoclassical vs. Ecological Economists
Differing views of natural resources
Differing views on economic growth
Effective property rights
“Eco-economy”
Differing views of natural resources
Differing views on economic growth
Effective property rights
“Eco-economy”
Economic GrowthEconomic Growth
Environmentally sustainable economic development
Environmentally sustainable economic development
Economic growth
Economic growth
35,00019
96 D
olla
rs p
er p
erso
n
Per capita genuine progress indicator (GPI)
0
1960 1970 1980 1990
Year
20001950
Per capita gross domestic product (GDP)
5,000
10,000
15,000
20,000
25,000
30,000
Economics of Pollution ControlEconomics of Pollution Control
Optimum level of pollutionOptimum level of pollution
Cost-benefit analysis (CBA)Cost-benefit analysis (CBA)
Green taxes and feesGreen taxes and fees
Monitoring Environmental ProgressMonitoring Environmental Progress
Gross domestic product (GDP) Gross domestic product (GDP)
Per capita GDP Per capita GDP
Limits of GDP and Per capita GDP Limits of GDP and Per capita GDP
Genuine progress indicator (GPI) Genuine progress indicator (GPI)
Index of Sustainable Economic Welfare Index of Sustainable Economic Welfare
Materials balance measurements Materials balance measurements
Harmful External Costs and Full-Cost PricingHarmful External Costs and Full-Cost Pricing
Internal costs Internal costs
External costs External costs
External benefits External benefits
Positive and negative externalities Positive and negative externalities
Full-cost pricing Full-cost pricing
Improving Environmental Quality and Shifting to Full-Cost PricingImproving Environmental Quality and Shifting to Full-Cost Pricing
Government subsidies and tax breaks Government subsidies and tax breaks
Green taxes Green taxes
Environmental tax reform Environmental tax reform
Innovation-friendly regulations Innovation-friendly regulations
Tradable pollution and resource-use rights Tradable pollution and resource-use rights
Market forces Market forces
Tradable Environmental PermitsTradable Environmental Permits
Flexible
Easy to administer
Encourages pollution prevention and waste reduction
Can guarantee achievement of caps
Permit prices determined by market transactions
Confronts ethical problem of how much pollution or resource waste is acceptable
Confronts problem of how permits should be fairly distributed
Big polluters and resource wasters can buy their way out
May not reduce pollution at dirtiest plants
Can exclude small companies frombuying permits
Caps can be too low
Caps must be gradually reduced to encourage innovation
Determining caps is difficult
Must decide who gets permits and why
Administrative costs high with many participants
Emissions and resource wastes must be monitored
Self-monitoring can promote cheating
Sets bad example by sellinglegal rights to pollute orwaste resources
Trade-Offs
Tradable Environmental PermitsAdvantages Disadvantages
Reducing PovertyReducing Poverty
Poverty Poverty
Premature death and health problems
Premature death and health problems
Environmental impact of poverty
Environmental impact of poverty
Poor help themselves Poor help themselves
Role of the World Bank Role of the World Bank
Expenditures per year (2003)
$12 billion
$11 billionprovide basic healthcare for all
provide clean drinking water for all
$12 billion
Expenditures per year needed to
$19 billioneliminate hunger and malnutrition
eliminate illiteracy
protect tropical forests
$5 billion
$8 billion
$29 billionU.S. highways
U.S. military $449 billion
$956 billionWorld military
U.S. cosmetics
U.S. foreign aid
U.S. EPA
U.S. pet foods
$8 billion
$8 billion
$8 billion
Environmentally Sustainable EconomiesEnvironmentally Sustainable Economies
Mimic natural systems Mimic natural systems
Sunset businesses Sunset businesses
Eco-friendly businesses Eco-friendly businesses
Improve public awareness Improve public awareness
Economics EnvironmentallySustainable
Economy(Eco-Economy)
Resource Useand Pollution
Ecology andPopulation
Reward (subsidize) earth-sustaining behavior
Penalize (tax and do notsubsidize) earth-degrading behavior
Shift taxes from wages and profits to pollution and waste
Use full-cost pricing
Sell more services insteadof more things
Do not deplete naturalcapital
Live off income fromnatural capital
Reduce poverty
Use environmental indicators to measureprogress
Certify sustainable practices and products
Use eco-labels on products
Reduce resource useand waste by refusing,reducing, reusing, andrecycling
Improve energyefficiency
Rely more onrenewable solar andgeothermal energy
Shift from a carbonbased (fossil fuel)economy to asolar–hydrogen basedeconomy
Mimic nature
Preserve biodiversity
Repair ecologicaldamage
Stabilize population by reducing fertility
Sunset Business Eco-Friendly Business
Coal mining
Oil production
Nuclear power
Energy-wasting motorvehicles
Mining
Throwaway products
Clear-cut logging
Paper production
Conventional pesticideproduction
Unsustainable farming
Water well drilling
Conventional economics
Conventional engineering,design, and architecture
Business travel
Solar cell production
Hydrogen production
Fuel-cell production
Wind turbine production
Wind farm construction
Geothermal energyproduction
Production of energy-efficient fuel-cell cars,trucks, and buses
Conventional and electricbicycle production
Light-rail construction
Sustainable agriculture
Integrated pestmanagement
Aquaculture
Recycling, reuse, andcomposting
Sustainable forestry
Soil conservation
Water conservation
Pollution prevention
Ecoindustrial design
Biodiversitymanagement andprotection
Ecological restoration
Disease prevention
Environmentalengineering, design,and architecture
Ecocity urban design
Environmental science
Environmentaleducation
Ecological economics
Environmentalaccounting
Teleconferencing
Environmentally Sustainable
Economy (Eco-Economy)