Introduction

1. Introduction The Origins Of Environmental Economics Presented By : Ahmad UllahQazi Ahmad Mujtaba FaheemUllah Khan Haad Khan

2. History • It starts from 1950s when Resource for the Future (RFF) was formed. • Main focus on natural resources Scarcity • President’s Material Policy Commission or the Paley Commission • The main focus of this commission was to check the scarcity and growth

3. Beginning • The actual beginning came in 1960s • Political backdrop and Rachael Carsons Silent Spring in 1963 • Limitations by the environmental pollution and need of governance • The three main uses points of agro chemicals

4. Rising Tide of External Effects • The term of External effects took birth • Externality included all those in Pigou definition in 1920 which he termed as polluters. • It had no control as economic system was not worth while. • Intervention was required.

5. Modern Day welfare Economics • Based on cost benefit analysis • Concept of Human preferences and willingness to pay • It was established as part of Welfare economics in 1930s and 10940s by Dupuit, Hicks, Kaldor and many others.

6. Military cost was highlighted and water was checked. • In 1958 three seminal works appeared • Eckstein’s Water Resource Development • Krutilla & Eckstein’s Multipurpose River Development and • McKean’s Efficiency in Government Through Systems Analysis

7. Its goal was the implication of the cost benefit and theoretical study • The projects to pay of the losers that they don’t suffer and the polluters still earn profit. • Externalities to be reduced by Government intervention

8. Natural Resource Economics Vs Environmental Economics • Optimum level of expenditure • Former: rates of exhaustible resource depletion and the determination of optimal harvest rates for renewable resources. • Latter: Pollutionary impacts • Impacts decreased in cumulative economic growth and pollutant discussion

9. The growth theory demanded treatises in 1970. • Mathematical models formed for dealing with real world issues • In1973 OPEC got into concern when oil prices had increased • Concern for Fossil-fuel dependent Economic System

10. Fishery and other renewable extinction concern over free for all case • Need for property rights • Hardin’s 1968 paper “The Tragedy of the Commons” • Till date any written material is to be found on natural resource apart from a perspective given by Fischer in 1981.

11. The finite resource of minerals, water, knowledge and energy to be the ambassador of sustainable growth for future. • Forms the base of ecological economics. • The First law of Thermodynamics • All resources put into use should be turned into waste

12. SPACE SHIP THEORY • Change in lifestyle for economic growth • Leads to anti growth notion due lifestyle change • Ricardo’s concept of increasing marginal cost. • Concept of “SPACESHIP EARTH” by boulding. • The finite resource of minerals, water and energy to be the ambassador of sustainable growth for future.

13. An optimum economic activity for regeneration of natural resources. • Matter and energy cannot be regenerated but its pollution can be controlled. • The impact of externality and the use of natural resource forms the basis of a natural resource being pervasive.

14. Problem of Social Cost • Given by Coase • 2 points: 1. Tax on the polluter 2. Tax on the victim • Opened doors for free market environmentalism. • The second condition is rare where the polluter is on low income.

15. Conclusion: • The Economic growth depended upon the optimality of resource expenditure and growth in technology • Specific amount of government intervention is a necessity to sustainable growth • Tradable permit.

16. Thanks