Principles of economic theory Economic growth, economic health, and sustainability Environmental and ecological economics Environmental policy The history of U.S. environmental policy The environmental policy process Different approaches to policy This lecture will help you understand:
Just a Little Background Marine Science Style ;)
What is Shifting Baselines: • Shifting baselines- termed in 1995 • Baseline data • Examples: • 100 yrs ago there were very few obese people; weight loss drugs, adult diabetes, cardiac arrest were things unnecessary or unheard of- Plus size clothing in junior dept • Nevada thru early 70’s had a huge tarantula population that would migrate across roadways. • Florida used to have a very large migratory bird population- not so much anymore • But the q. is: Do YOU remember it?
10 Most Polluted H2O in US 1. Mississippi River TN, AR, LA, MO, IL, MN, WI, IA, KY, MS 2. Pacific Ocean OR, HI, CA 3. Ohio River IL, IN, OH, KY, WV, PA 4. Tennessee River KY, TN, AL 5. Houston Ship Channel TX 6. Ward Cove AK 7. Savannah River GA, SC 8. Delaware River DE, PA, NJ 9.Thames River CT 10. Grays Harbor WA www.freedrinkingwater.com
Activity: Short video (4 minutes)Shifting Baselines • In pairs, discuss: • Do your grandparents talk about “When I was a kid…….” • What are some baselines that SHOULD NEVER be allowed to change through time? • What do you know about watersheds, and water basins? • Where are the watersheds in Florida? • How many do you think there are?
Answers: • What is a Watershed: • An area or region drained by a river, river system, or other body of water • A watershed describes an area of land that contains a common set of streams and rivers that all drain into a single larger body of water. • Where are the watersheds in Florida? • Watersheds 29 in Florida
Activity: • H/W over Florida Watersheds • Be sure you understand the 2 big concepts • Watershed • Shifting Baseline • Assignment
Day 2 Grab a textbook: Pre-read Central Case, Page 24 Chapter 2: Environmental Economics and Policy
San Diego and Tijuana • The Tijuana River empties into the Pacific Ocean, carrying millions of gallons of untreated wastewater. • San Diego’s waters receive storm water runoff. • Beaches are off-limits to swimming due to pollution from the Tijuana River. • Rains wash pollutants onto U.S. and Mexican beaches, but things are worse on the Mexican side. • The problem has grown worse with increased population and pollution. • People on both sides of the border have pressed policymakers to do something.
Surf-rider perspective • The Basics of Wastewater Discharge • To comply with the Clean Water Act of 1972, most municipal wastewater treatment plants use both primary and secondary treatment. Primary treatment involves screening out large floating objects, such as rags and sticks, removing grit, such as sand and small stones, and allowing wastewater to settle, followed by the removal of collected solids. In secondary treatment, primary-treated wastewater flows into another facility where bacteria consume most of the organic matter in the wastewater before it is discharged. • Amendments to the law in 1977 allow for variances from secondary treatment for certain ocean discharges, provided the plant meets specified criteria. One important requirement is that the discharge must meet water quality standards adopted by the state to protect marine life and recreational activities such as swimming, surfing and fishing. • Many coastal cities that once sought variances from secondary treatment have chosen to upgrade their treatment plants to meet Clean Water Act requirements without variances. This is especially true in areas with heavy recreational beach use. Also, as water supplies become more valuable, an increasing number of municipalities are adding advanced treatment technologies to their secondary treatment plants to clean the wastewater to the point it can be used safely for landscape irrigation and other uses.
Economics • Economics and environments are intimately linked. • Protecting environment's is good for economy. • Economics: studies how people use resources to provide goods and services in the face of demand. • Most environmental and economic problems are linked. • Root “oikos” gave rise to both ecology and economics.
Insert the data ;) • Economy • Goods • Services • Subsistance Economy • Capitalist Market Economy • Centrally Planned Economy • Mixed Economy
Answers: • Economy: a social system that converts resources into… • Goods: manufactured materials that are bought, and sold • Services: work done for others as a form of business • Subsistence economy: people get their daily needs directly from nature; they do not purchase or trade • Capitalist market economy: buyers and sellers interact to determine production and distribution of goods and services • Centrally planned economy: the government determines how to allocate resources • Mixed economy: governments intervene to some extent
Mixed economies • Mixed economy: a hybrid economic system that combines capitalist market and centrally planned economies • In modern mixed economies, governments intervene to: • Eliminate unfair advantages held by single buyers or sellers • Provide social services (national defense, medical care, education) • Provide “safety nets” for the elderly, victims of natural disasters • Manage the commons • Mitigate pollution
The environment and economy are linked • Economies receive inputs from the environment. • Process them for use • Discharge the wastes back into the environment • Traditional economists ignore the environment. • Environmental economists accept that human economies exist within, and depend on, the environment.
Environmental systems support economies • Ecosystem services: essential services support the life that makes economic activities possible • For survival and quality of life • Economic activities affect the environment. • Deplete natural resources • Produce pollution The Millennium Ecosystem Assessment concluded that, in 2005, 15 of 24 ecosystem services were being degraded or used unsustainably.
Selected ecosystem services 17 in your text
Activity: • Go over the table on page 27, familiarize yourself with each • Outline first part of chapter: pages 24-34 (Economics: Approaches & Env. Implications)
Types of Economics Apes 2013
Classical economics • Competition between people free to pursue their own economic self-interest will benefit society as a whole (Adam Smith, 1723-1790). • The market is guided by an “invisible hand.” • This idea is a pillar of free-market thought today. • It is also blamed for economic inequality. • Rich vs. poor • Critics think that market capitalism should be restricted by government.
Neoclassical Economics • Examines psychological factors underlying consumer choices • Market prices are explained in terms of consumer preferences. • Buyers vs. sellers • The “right” quantities of a product are produced. The market favors equilibrium between supply and demand.
Neoclassical Cost-Benefits • Cost-benefit analysis: the costs of a proposed action are compared to the benefits that result from the action • If benefits > costs: pursue the action • Not all costs and benefits are identified or quantified. • i.e., effects on health or life styles • Monetary values are easier to determine than environmental costs. • So economic development is favored over environmental protection.
Generates enormous wealth and jobs Assumptions of neoclassical economics: Resources and workers are infinite or substitutable. Future effects are discounted because short-term effects are more important. Costs and benefits are internal and experienced only by the buyer and seller. Growth is needed to keep jobs and social order and increase opportunities for the poor to get rich. “Everyone gets a piece of the pie.” Neoclassical: Positive Aspects
Neoclassical: Negative Aspects • Some resources are unique and can’t be replaced. • Many environmental problems develop slowly and affect future generations. • Costs and benefits of a transaction affect people other than the buyer or seller. • Taxpayers clean up pollution. • The “pie” can’t grow infinitely. • Economic growth is the yardstick that measures progress.
Some examples of externalities • External costs: borne by someone not involved in a transaction • Hard to account for and eliminate • Human health • Property damage • Declines in desirable elements • Aesthetic damage • Stress and anxiety • Declining real estate values
Is the growth paradigm good for us? American citizens have embarked on a frenzy of consumption unparalleled in history. • The rate of economic growth in recent years is unprecedented in human history. • The world economy is 7 times larger than 50 years ago! • All measures of economic activity are still increasing. • Trade, rates of production, amount/value of goods • “More and bigger is better” • Advertising has doubled in the past 20 years. • More goods available due to technology and global trade.
Is the growth paradigm good for us? The dramatic rise in per-person consumption is having numerousconsequences.
Is economic growth a good thing? • As long as economic growth is only a tool to achieve happiness • If it becomes an end in itself, it is no longer a good tool. • Affluenza: material goods can fail to bring contentment • Like cancer, runaway growth can overwhelm and destroy our economic system. • Resources are limited, so non-stop growth is not sustainable. • Proponents of unrestrained growth include economists, businesspeople, and policymakers. • Technology can solve everything.
Other types of economists • Ecological economists: civilizations cannot overcome environmental limitations • Apply principles of ecology and systems science • Natural systems are models: take a long-term perspective • Steady state economies: mirror natural ecological systems • Quality of life will continue to rise, along with technology • Calls for revolution • Environmental economists: unsustainable economies have high population growth and inefficient resource use • Modify neoclassical economics to increase efficiency • Calls for reform of the current system
Ecosystem serv. & non-market values • Non-market values = values not included in the price of a good or service
Valuing ecosystems goods and services • Environmental and ecological economists have tried to assign monetary values to ecosystems services. • Surveys: determine how much people are willing to pay to protect or restore a resource • Money, time, effort people expend to travel to parks for recreation • Inferring the dollar value of landscapes, views, and peace and quiet • Costs required to restore natural systems The biosphere provides at least $44 trillion (2009 dollars) worth of ecosystem services per year — more than the gross domestic product of all nations combined!
Corporations are becoming sustainable • Industries, businesses, and corporations can make money by “greening” their products and practices. • Ben & Jerry’s ice cream • Patagonia outdoor apparel • WalMart, Ford, Toyota, McDonald’s, Starbucks, Nike • Some corporate greening efforts are rhetoric = “greenwashing” • Mislead consumers • Consumers must encourage trends in sustainability by rewarding those corporations that promote sustainable solutions.
Markets can fail • Market failure: occurs when markets do not account for the environment’s positive impacts • Or, when markets do not reflect the negative effects of activities on the environment or people (external costs) • Government intervention counters market failure • Laws and regulations • Green taxes: penalize harmful activities • Economic incentives to promote conservation and sustainability
Activity: • Tonight read the, “Calculating the Economic Value of Earth’s Ecosystems” on page 32-33 • Answer the following: • What is your overall thought on the idea of putting a price on ecosystems? • Do you think this will help or hurt them? Why? • Do you think the numbers are adequate, or do you see areas they overshot or undercut? • Was there a need for a second study? Should there be a third? If so, what would you like to see?
Activity: • After we look at the overview of what Env Policy is, we will: • Jigsaw next four chunks of text: • US Env Policy • International Env Policy • Env Policy Process • Approaches to Env Policy