Transcript Chapter2- Ethics & Economics

Ch 2
Environmental Ethics and
Economics: Values and
Choices
Part 1: Foundations of
Environmental Science
PowerPoint® Slides prepared by
Jay Withgott and Heidi Marcum
Copyright © 2006 Pearson Education, Inc., publishing as Benjamin Cummings
Copyright © 2008 Pearson Education, Inc., publishing as Benjamin Cummings
This lecture will help you understand:
• Culture and worldviews
• Environmental ethics
• Classical and neoclassical
economics
• Economic growth,
economic health, and
sustainability
• Environmental and
ecological economics
Rustle the Leaf
Central Case: The Mirrar Clan Confronts the
Jabiluka Uranium Mine
Uranium deposits in Australia often occur on sacred
Aboriginal land
-The Mirrar oppose the mine for cultural, religious,
ethical, health, and economic reasons
After much protest, the mine will not be developed
unless the Mirrar agree!!
Ethics and economics
• Both disciplines deal with
what we value
• Our values affect our
environmental decisions
and actions
Culture and worldview
• Our relationship with the environment depends on
assessments of costs and benefits
• Culture and worldview also affects this relationship
- Culture  knowledge, beliefs, values, and learned ways
of life shared by a group of people
- Worldview  a person’s or group’s beliefs about the
meaning, purpose, operation, and essence of the world
Culture and worldview affect our perception of the
environment and environmental problems!!
Worldviews differ among people
• Different worldviews
result in different
perceptions
• Aborigines saw the
negative environmental
impacts of the Jabiluka
mine
• Others saw jobs, income,
and energy from the mine
Many factors shape worldviews
• Religions
• Communities
• Political ideology
• Economics
• Individual interests
- Vested interest  an individual with strong
interests in the outcome of a decision that
results in gain or loss for that individual
Ethics
• Ethics  the study of good and bad, right and wrong
- Relativists = believe ethics varies with social context
- Universalists = right and wrong remains the same
across cultures and situations
• Ethical standards  criteria that help differentiate
right from wrong
1) Classical standard = virtue
2) The golden rule
3) Utility = something right
produces the most benefits
for the most people
Environmental ethics
• Environmental ethics  application of ethical standards
to relationships between human and non-human entities
- Hard to resolve; depends on the person’s ethical
standards
- Depends on the person’s domain of ethical concern
Should we conserve
resources for future
generations?
Is is OK to destroy a
forest to create jobs
for people?
Should humans drive
other species to
extinction?
Is it OK for some
communities to be exposed
to excess pollution?
We have expanded our ethical consideration
• To include animals, communities, nature
Expanding ethical concern
• Why have we expanded our ethical concerns?
- Economic prosperity: more leisure time, less anxieties
- Science: interconnection of all organisms
• Three perspectives in Western ethics
- Anthropocentrism  only humans have rights
- Biocentrism  certain living things also have value
- Ecocentrism  whole ecological systems have value
- Holistic perspective, stresses preserving
connections
WHICH ARE YOU?
Western ethical expansion
History of environmental ethics
•
People have questioned our relationship with the
environment for centuries
•
Christianity’s attitude towards the environment
•
•
Anthropocentric hostility, or
•
Stewardship?
The Industrial Revolution increased consumption and
pollution
•
People no longer appreciated nature
•
Transcendentalism = nature is a manifestation of the
divine
•
Ralph Waldo Emerson, Henry David Thoreau
The preservation ethic
Protect natural environment in its natural, unaltered state
• Unspoiled nature should be protected for its own
inherent value
• John Muir (right, with President Roosevelt at Yosemite
National Park) had an ecocentric viewpoint
The conservation ethic
Use natural resources, but we have responsibility to do so wisely
• Use natural resources wisely for the greatest good for
the most people
• Gifford Pinchot had an anthropocentric viewpoint
The land ethic
People obligated to treat land in ethical manner
• Healthy ecological systems depend on protecting all parts
• Aldo Leopold believed the land ethic changes the role
of people from conquerors of the land to citizens of it
Philosophical Perspectives
• Deep ecology  humans are inseparable from nature
• Since all living things have equal value, they should be
protected
• Ecofeminism  male-dominated societies have degraded
women and the environment through fear and hate
• Female worldview = cooperation
• Environmental justice  the fair and equitable
treatment of all people regarding environmental issues
• Wealthy nations dump hazardous waste in poorer
nations with uninformed residents
Environmental justice (EJ)
• The poor and minorities are exposed to more pollution,
hazards, and environmental degradation
75% of toxic waste landfills in the southeastern U.S.
are in communities with higher racial minorities
Environmental justice and Native Americans
From 1948 to the 1960s, Navajo miners were not warned of
radiation risks, nor provided protection by the industry
or the U.S. government
Economics
•
Friction occurs between people’s ethical and economic
impulses
•
Is there a trade-off between economics and the
environment?
•
Generally, environmental protection is good for the
economy!!
•
Economics studies how people use resources to provide
goods and services in the face of demand
•
Most environmental and economic problems are linked
Types of modern economies
• Economy = a social system that converts resources into
• Goods: manufactured materials that are bought, and
• 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 prices and production of goods and services
• Centrally planned economy = the government determines
how to allocate resources
• Mixed economy = governments intervene to some extent
Government intervenes in a market economy
• Even in capitalist market economies, governments
intervene to:
• Eliminate unfair advantages
• Provide social services
• Provide safety nets
• Manage the commons
• Mitigate pollution
Conventional view of economics
• Conventional
economics focuses on
production and
consumption
• The environment is
an external “factor
of production”
IGNORES THE ENVIRONMENT!!
Environmental view of economics
• Human economies
exist within, and
depend on, the
environment
Without natural
resources, there
would be no
economies!!
Environmental systems support economies
• Ecosystem services  essential services support the
life that makes economic activities possible
*Soil formation
*Pollination
*Water purification
*Nutrient cycling
*Climate regulation
*Waste treatment
• Economic activities affect the environment
• Deplete natural resources
• Produce too much pollution
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 the 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
Marginal benefit and cost curves
• 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
can be identified
Marginal benefit and cost curves determine an
“optimal” level of resource use or pollution mitigation
Neoclassical economics
• Enormous wealth and jobs are generated
- Environmental problems are also
created
• Assumptions of neoclassical economics:
- Resources are infinite or substitutable
- Costs and benefits are internal
- Long-term effects are discounted
- Growth is good
Common Assumptions
• Resources are INFINITE
- Believe a replacement resource will be found
• Costs and benefits DO NOT affect anyone
- Ignores environmental costs
- EXTERNAL COSTS  Borne by someone not
involved in a transaction (ex: health problems)
• Future events count LESS
- Ignore long term consequences of our actions
• Growth is GOOD
- Makes poor feel better
Is the growth paradigm good for us?
• “More and bigger is better”
• The dramatic rise in per-person consumption has severe
environmental consequences
Is economic growth sustainable?
• Affluenza = material goods do not always bring
contentment
• Uncontrolled economic growth is unsustainable
- Technology can push back limits, but not forever
- More efficient resource extraction and food
production perpetuates the illusion that resources
are unlimited
• Many economists believe technology can solve
everything
Other types of economists
• Ecological economists = civilizations cannot overcome
environmental limitations
- Steady state economies should mirror natural
ecological systems
- Calls for revolution
• Environmental economists = unsustainable economies have
high population growth and inefficient resource use
- Modify neoclassical economics to increase efficiency
- Calls for reform
A steady state economy
“As resources became harder to find, economic growth
slows and stabilizes” (John Stuart Mill, 1806-1873)
EXPLAIN WHAT THIS MEANS FOR US!
• Economies are measured in various ways
• Gross Domestic Product (GDP)  total monetary value
of final goods and services produced
• Does not account for nonmarket values
• Pollution increases GDP (because money is spent to
clean up)
GPI: An alternative to the GDP
• Genuine Progress Indicator (GPI)  differentiates
between desirable and undesirable economic activity
- Positive contributions (i.e. volunteer work) not paid for
with money are added to economic activity
- Negative impacts (crime, pollution) are subtracted
In the U.S., GDP has risen greatly, but not GPI!!!
More “green accounting” indicators
• Net Economic Welfare (NEW) = adjusts GDP by adding
the value of leisure time, while deducting environmental
degradation
• Sustainable Economic Welfare (ISEW) = based on
income, wealth distribution, resource depletion
• These indicators give a more accurate indication of a
nation’s welfare
- Very controversial, hard to practice
Valuing ecosystems goods and services
• Our society mistreats the very systems that sustain it
- The market ignores/undervalues ecosystem values
• Nonmarket values = values not included in the price of a
good or service
Assigning value to ecosystem services
• Contingent valuation = uses surveys to determine how
much people are willing to pay to protect or restore a
resource
- Measures expressed preferences
- But, since people don’t really pay, they may overinflate
values
• Revealed preferences = revealed by actual behavior
- Time, money, effort people spend
- Measuring the actual cost of restoring natural systems
The global value of all ecosystem services = $42 trillion!
Markets can fail
• Market failure  markets do not account for the
environment’s positive impacts
- 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
Ecolabeling addresses market failures
• The market can be used to counter
market failure
- Create markets in permits
- Ecolabeling  tells consumers
which brands use sustainable
processes
- A powerful incentive for
businesses to switch to better
processes
- “Dolphin safe” tuna
- Socially responsible investing in
sustainable companies
Corporations are responding to concerns
• Industries, businesses, and corporations can make money
by “greening” their operations
- Local sustainably oriented businesses are being
started
- Large corporations are riding the “green wave” of
consumer preference for sustainable products
- Nike, Gap
What is “GREENWASHING”?
Consumers are misled into believing
companies are acting sustainably!!
Greenwashing
Conclusion
• Recent developments have brought economic approaches
to bear on environmental protection and conservation
• Environmental ethics has expanded people’s ethical
considerations
• Economic welfare can be enhanced without growth,
resulting in economic health and environmental quality
QUESTION: Review
An ecocentric worldview would consider the impact of an
action on… ?
a) Humans only
b) Animals only
c) Plants only
d) All living things
e) All nonliving things
QUESTION: Review
Which ethic holds that healthy ecosystems depend on the
protection of all their parts?
a)
Preservation ethic
b)
Land ethic
c)
Conservation ethic
d)
Deep ecology
e)
Biocentrism
QUESTION: Review
Which of the following is an ecosystem service?
a) Water purification in wetlands
b)
Climate regulation in the atmosphere
c)
Nutrient cycling in ecosystems
d)
Waste treatment by bacteria
e)
All of the above
QUESTION: Review
Which is NOT an assumption of neoclassical economics
that can lead to environmental degradation?
a) Resources are limited
b) Long-term effects are downplayed
c) All costs and benefits are experienced by the buyer
and seller alone
d) Growth is good
QUESTION: Review
Which of the following statements would be spoken by an
ecological economist?
a) The current economic system is working fine
b) The current economic system simply needs to be finetuned
c) The current economic system is broken and a new one
needs to be developed
d) Economic systems never work
QUESTION: Interpreting Graphs and Data
Market equilibrium, which sets the price of a product, is
reached …
a) When supply exceeds
demand
b) When demand exceeds
supply
c) By demand when
quantity is low, and
supply when quantity is
high
d) When supply equals
demand
QUESTION: Interpreting Graphs and Data
Which conclusion can you draw from this graph?
a) GDP has not really
increased since 1950
b) Although we are
spending more money,
our lives are not much
better
c) We are spending less
money, and our lives
are much better
d) The GPI is not as
accurate as GDP
QUESTION: Viewpoints
Think of an issue in your community that could pit
environmentalists against economic development. What
do you think should prevail: environmental protection or
economic development?
a)
b)
c)
d)
Economic growth; we need the jobs
Environmental protection; we need the environment
Both; a compromise must be reached
Whatever costs the taxpayers the least
QUESTION: Viewpoints
What entities do you include in your domain of ethical
concern?
a)
b)
c)
d)
Humans only
Humans and pets
Humans, pets, and other animals
Humans, pets, other animals, and nature