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Chapter23 121114142958-phpapp01
- 1. 17TH MILLER/SPOOLMAN LIVING IN THEENVIRONMENT Chapter 23 Economics, Environment, and Sustainability
- 2. Economic Systems AreSupported by Three Types of Resources • Economic systems are supported by • Natural capital • Human capital, human resources • Manufactured capital, manufactured resources
- 3. Market Economic SystemsDepend on Interactions between Buyers and Sellers (1) • True free market system • No company or group controls prices of a good or service • Market prices include all direct and indirect costs (full-cost 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
- 4. Economic Growth andEconomic Development • Economic growth • Increased capacity to supply goods and services • Requires increased production and consumption • Requires more consumers • Economic development • Improvement of living standards • Environmentally sustainable economic development
- 5. Gross World Product,1970-2008 Figure 1, Supplement 9
- 6. Governments Intervene toHelp Correct Market Failures • 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
- 7. Economists Disagree overNatural Capital, Sustainable Economic Growth (1) • High-throughput economies • Resources flow through and end up in planetary sinks where pollutant can be at harmful levels
- 8. What Is thePurpose of a Business? • Make a profit for its owners and investors • Sustainability is about staying in business • Another definition – “Making a quality product and earn a profit without harming the environment.”
- 9. Protecting Natural Capital •Estimating the values of the earth’s natural capital • Estimate nonuse values • Existence value • Aesthetic value • Bequest value, option value-willingness of people to pay to protect natural capital
- 10. Most Things Costa Lot More Than We Might Think • Market price, direct price • Indirect, external, or hidden costs not included in direct price • Direct and indirect costs of a car • Should indirect costs be part of the price of goods? • Economists differ in their opinions
- 11. We Can IncludeHarmful Environmental Costs in the Prices of Goods, Services • Environmentally honest market system • 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
- 12. Label Environmentally BeneficialGoods and Services • Product eco-labeling • Certification programs • Greenwashing-making people believe that harmful products are green, clean, and environmentally friendly – clean coal
- 13. 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
- 14. Tax Pollution andWastes Instead of Wages and Profits • Green taxes, ecotaxes • So that harmful products and services are at true cost • Steps for successful implementation of green taxes • Costa Rica put a 3.5% tax on the direct cost of fossil fuels , which went toward forest protection and replanting efforts
- 15. Environmental Laws andRegulations Can Discourage or Encourage Innovation • Environmental regulation • Command and control approach • Incentive-based environmental regulations • Innovation-friendly regulations
- 16. We Can Usethe Marketplace to Reduce Pollution and Resource Waste • Incentive-based regulation example • Tradable pollution or resource-use permits • Cap-and-trade approach used to reduce SO2
- 17. Reduce Pollution andResource Waste by Selling Services Instead of Things • 1980s: Braungart and Stahl • New economic model • Service-flow economy, eco-lease (rent) services • Xerox • Carrier in Europe-lease high quality heaters and AC units instead of selling • Ray Anderson: lease carpets in the future
- 18. The Gap betweenthe Rich and the Poor Is Getting Wider • Poverty • 1.4 billion people live on less than $1.25 per day • Trickle-down effect-money the rich spend ends up with the poor • Flooding up-what happens much more oftem, money the poor spend ends up with the rich • Wealth gap-growing-500 richest earn more than the 416 million poorest
- 19. Poor Family MembersStruggling to Live in Mumbai, India Fig. 23-10, p. 627
- 20. We Can ReducePoverty (1) • South Korea and Singapore reduced poverty by • Education • Hard work • Discipline • Attracted investment capital
- 21. We Can ReducePoverty (2) • Important measures • 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
- 22. Achieve the World’sMillennium Development Goals • 2000: Millennium Development Goals • Sharply reduce hunger and poverty • Improve health care • Empower women • Environmental sustainability by 2015 • Developed countries: spend 0.7% of national budget toward these goals • How is it working? • Not really, very few counties are doing what they agreed to do
- 23. What Should OurPriorities Be? Fig. 23-12, p. 629
- 24. We Are LivingUnsustainably • Depleting natural capital • Environmental alarm bells going off • Matter recycling and reuse economies • Mimic nature • Recycling and reusing
- 25. Use Lessons fromNature to Shift to More Sustainable Economies • Best long-term solution is a shift to • Low-throughput low-waste, economy
- 26. Make Money andCreate 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
- 27. Solutions: Principles forShifting to a More Environmentally Sustainable Economy Fig. 23-14, p. 631
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- 30. Green Career: InstallingSolar Cells Fig. 23-17, p. 633
Editor's Notes
- #20 Figure 23.10: This mother and her child live in poverty on the edges of Mumbai (formerly Bombay), India, a thriving urban center.
- #24 Figure 23.12: What should our priorities be? Question: Which item on the right side of the figure would you do without or reduce to pay for solving some of the problems listed on the left side of the figure? (Data from United Nations, World Health Organization, U.S. Department of Commerce, U.S. Office of Management and Budget, World Bank, Earth Policy Institute, and Stockholm International Peace Research Institute)
- #28 Figure 23.14: Solutions. We can use certain principles for shifting to more environmentally sustainable economies, or eco-economies, during this century. Question: Which five of these solutions do you think are the most important?
- #29 Figure 23.15: Solutions. These are some of the components of more environmentally sustainable economic development favored by ecological and environmental economists. The goal is to get economic systems to put more emphasis on conserving and sustaining the air, water, soil, biodiversity, and other natural resources that in turn sustain all life and all economies. Such a shift toward more efficient resource use, cleaner energy, cleaner production, ecocities, and natural capital preservation can stimulate economies, create jobs, and be profitable. Question: What are three new types of jobs that could be generated by such an economy?
- #30 Figure 23.16: Green careers. Some key environmental businesses and careers are expected to flourish during this century, while environmentally harmful, or sunset, businesses are expected to decline. See the website for this book for more information on various environmental careers. Question: How could some of these careers help you to apply the three principles of sustainability?
- #31 Figure 23.17: Selling and installing solar-cell systems is a rapidly growing business and a source of many new green jobs in the United States and in many other countries.