Transcript This lecture will help you understand

This lecture will help you understand:
• 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
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.
Where is it?
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
Type of ecosystem service
Regulating atmospheric gases and
climate
Forming soil and cycling nutrients
Example(s)
Pollinating plants
Maintaining the ozone layer,
controlling global temperature
Weathering rock, cycling
carbon, and nitrogen
Wind and animal pollination
Providing habitat
Species reproduction, survival
Providing food, resources
Fish, crops, lumber, fuel
Recreational and cultural services
Ecotourism, educational, and
spiritual values
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.
Neoclassical: Positive Aspects
• 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: 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?
• 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.
American citizens have embarked on a frenzy of consumption
unparalleled in history.
Is the growth paradigm good for us?
The dramatic rise in per-person consumption is having numerous
consequences.
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
Environmental policy
• People persuade government leaders to solve a problem through
the making of policy.
• Policy: a formal set of general plans and principles to address
problems and guide decisions
• Public policy: policy made by governments that consists of laws,
regulations, orders, incentives, and practices
• Environmental policy: pertains to human interactions with the
environment
– Regulates resource use or reduction of pollution
– Promotes equity in resource use
Environmental policy and
resource use
• Policies include science, ethics, and economics.
Environmental policy and equity
• The capitalist market economic systems of democracies are
driven by incentives for short-term economic gain.
– Not for long-term social and environmental stability
– Provides little incentive to minimize environmental impacts
– Market failure is justification for government intervention
Environmental policy goals: protect environmental quality
and natural resources and promote equity in people’s
resource use
Environmental policy and
resource use
• Environmental policies exist to protect resources from:
• (1) The tragedy of the commons: we must develop policies
for commonly held resources
– Restrict use and actively manage resources
– Safeguard against exploitation and depletion
• (2) Free riders: reducing environmental impacts tempts any
one person to cheat
– Private voluntary efforts are less effective than efforts
mandated by public policy
• (3) External costs: environmental policies promote fairness
by preventing people from using resources in ways that harm
others
In 4 groups
• Jigsaw each section:
– US Environmental Policy
– International Environmental Policy
– Environmental Policy Process
– Approaches to Environmental Policy
U.S. environmental policy
• The U.S. provides a good example of environmental policies.
– The U.S. has pioneered innovative environmental policy.
– U.S. policies have served as role models — of success and
failure for other nations.
– The U.S. influences other nations.
– Understanding U.S. environmental policy helps us
understand environmental policy at local, state, and
international levels.
Framework of U.S. policy: 3
branches
• 3 branches of the U.S. federal government (legislative,
executive, and judicial) are involved in aspects of
environmental policy:
– Legislation (statutory law) is passed by Congress
– Signed or vetoed by the president
– Implemented and enforced by administrative agencies
within the executive branch
• Administrative agencies: the “fourth branch”
– Established by the president or Congress
– Monitors compliance and enforces law
– Issue regulations: specific rules based on statutory law
State and local governments mirror federal policies
• The structure of the federal government is mirrored at the
state level.
• State laws cannot violate principles of the U.S. Constitution.
– If laws conflict, federal laws take precedence.
– California, New York, and Massachusetts have strong
environmental laws and well-funded environmental
agencies.
– The interior western states put less priority on
environmental protection.
Early U.S. environmental policy
• Involved management of public
lands (1780s to the late 1800s)
– Promoted settlement in the
west
– Extraction of natural resources
• Increased prosperity
• Relieved crowding in Eastern cities
• Displaced millions of Native
Americans
• People believed that land was
infinite and inexhaustible.
The second wave of U.S. policy
• During the late 1800s: addressed environmental
problems/impacts caused by westward expansion
• Public perception and government policy shifted.
– Yellowstone National Park, the world’s first national
park, opened in 1872.
• Other protected areas were created.
– National wildlife refuges, parks, and forests
• Reflected a new understanding that the West’s resources
were exhaustible and required legal protection
– Soil conservation after the 1930s Dust Bowl
– 1964’s Wilderness Act: “where man is but a visitor”
The third wave of U. S.
environmental policy
• Responded to pollution
• Mid-to-late 20th century
• Better off economically
• But dirtier air, dirtier water, waste, and
toxic chemicals
• Increased awareness of environmental
problems shifted public priorities and policy.
• 1962: Silent Spring (by Rachel Carson)
described the negative ecological and
health effects of pesticides and industrial
chemicals
Modern U.S. environmental
policy
• The Cuyahoga River (in Ohio) was polluted with oil and
industrial waste.
– It caught fire in the 1950s and 1960s.
• Today, public enthusiasm for environmental protection
remains strong.
– The majority of Americans favor environmental protection.
– Each April, millions of people celebrate Earth Day.
National Environmental Policy Act
(NEPA)
• 1970: The dawn of the modern era of environmental policy
• The National Environmental Policy Act (1970) (NEPA), signed
into law by President Nixon:
– Created the Council on Environmental Quality
– Requires an Environmental Impact Statement (EIS) for any
Federal action that might impact the environment
– NEPA forces the government and businesses to evaluate
the environmental impacts of a project.
The EPA shifts environmental
policy
• In 1970, Nixon created the Environmental Protection
Agency (EPA) by Executive Order.
– An integrated approach to environmental policy
– Conducts and evaluates research
– Monitors environmental quality
– Sets and enforces standards for pollution levels
– Assists states in meeting standards and goals
– Educates the public
– Involves water and air quality, pollution, solid waste
Significant environmental laws
• The public demanded a
cleaner environment and
supported tougher
environmental legislation.
The social context for policy can change
• Three factors allowed major advances in environmental policy in
the 1960s and 1970s:
• Wide evidence of environmental problems
• People could visualize policies to deal with problems
• Public support and leaders who were willing to act
• Starting in the 1980s, the political climate changed.
• People felt burdened by environmental regulations.
• Politicians tried to roll back or weaken environmental laws.
• The U.S. retreated from its leadership role in environmental
policy.
We need to stop labeling problems as environmental and show they
are quality of life issues.
The fourth wave of environmental
policy
• The 1992 Earth Summit in Rio
de Janeiro, Brazil, drew
leaders from 179 nations.
– It centered on the idea of
sustainable development.
• This fourth wave of
environmental policy focuses
on sustainable development.
– Finding ways to safeguard
natural systems while
raising living standards for
the world’s poorest people
International Environmental
Policy
• International law is vital to solving international problems.
• Customary law: arises practices or customs held by most
cultures
• Conventional law: arises from conventions or treaties
between nations
– Montreal Protocol (1987): 160 nations agreed to reduce
ozone-depleting chemicals
An international
wastewater treatment
plant
Organizations help shape international policy
• International organizations influence the behavior of nations.
• Provide funding, apply peer pressure, direct media attention
• United Nations: created in 1945 to maintain international peace
and prosperity
• United Nations Environment Programme (UNEP): helps
nations understand and solve environmental problems
• The World Bank: established in 1944; one of the world’s largest
funding sources for economic development
• Dams, irrigation, infrastructure
• Funds unsustainable, environmentally damaging projects
The European Union (EU)
• The European Union seeks to promote Europe’s unity and
economic and social progress
– One of its goals is promotion of solutions to environmental
problems.
– Contained 27 member nations
– Can enact binding treaties
– Its regulations have the same authority as national laws.
– Can also issue advisory directives
The World Trade Organization (WTO)
• Established in 1995
• Represents multinational corporations to promote free trade
• Has authority to impose penalties on nations that don’t
comply with its directives
• Interprets some environmental laws as unfair barriers to free
trade
• Brazil and Venezuela filed a complaint against the U.S.’s EPA
regulations requiring cleaner-burning fuel.
• The WTO agreed with Brazil and Venezuela, despite threats
to human health.
• Critics charge the WTO aggravates environmental problems.
International treaties can discourage protection
• International treaties allow industries and corporations to
weaken environmental protection laws.
• These laws are seen as barriers to trade.
• Under the North American Free Trade Agreement (NAFTA),
an investor of one country can sue another country for
hindering the investor’s ability to make profits.
• i.e., Canada’s cattle industry demanded $300 million
from U.S. taxpayers for banning Canadian beef after
mad cow disease was found in Canadian cattle
• With billions of dollars at stake, these treaties discourage
states and nations from passing new environmental protection
laws.
Non-governmental Organizations
(NGOs)
• Non-governmental Organizations (NGOs): entities that
influence international policy
– Some do not get politically involved, such as The Nature
Conservancy.
– Others try to shape policy through research, lobbying,
or protest.
• Greenpeace, Population Connection
• They apply more funding, research, and expertise toward
solving environmental problems than many national
governments.
Six steps to making environmental policy
Identify the problem: requires
curiosity, observation,
awareness
Identify specific causes:
involves scientific research
Six steps to making environmental policy
Envision a solution and set
goals: involves science, social
and political action
Get organized: organizations
are more effective, but a
motivated, informed individual
can also succeed
Six steps to making environmental policy
Cultivate access and influence:
• Lobbying: spending time and
money to influence a politician
• Environmental advocates are
not very influential.
Manage development of policy:
Prepare a bill, or draft a law,
containing solutions
How a bill becomes law
• After a law’s enactment:
– Administrative agencies
implement regulations.
– Policymakers evaluate the
policy’s successes or
failures.
– The judicial branch
interprets the law.
Science plays a role in policy
• Science provides information to make better policy.
– A nation’s strength depends on its commitment to science.
• Sometimes policymakers distort science.
– Manipulating data
– Censoring, suppressing, and editing reports
– Placing unqualified people in powerful positions
– Placing people with conflicts of interest in positions
– Ignoring scientific advice
– Misleading the public
Approaches to environmental policy
• Command-and-control approach: environmental policy
sets legal limits and threatens punishment for violators
– Has resulted in successes: cleaner air and water
– Most current environmental laws
• Have resulted in safe, healthy, comfortable lives
• Top-down, sometimes heavy-handed
• Interest groups — people seeking private gain —
unduly influence politicians.
– Alternative approaches involve using creative
economic incentives.
Subsidies are widespread
• Taxbreak: the government relieves the tax burden on a business
or individual to promote desirable industries or activities
• Subsidy: a government giveaway of cash or resources to promote
environmentally sustainable activities
– Can be used to support unsustainable activities
– i.e., subsidies for non-renewable fuels, roads in national
forests, mining on public lands
The U.S. taxpayer pays $4,000/year in environmentally harmful
subsidies and on increased prices through environmental
degradation.
Green taxes discourage undesirable activities
• Taxation can be used to discourage undesirable activities
• Internalizes external costs
• Green taxes: taxes on environmentally harmful activities and
products
– Polluter pays principle: the price of a good or service includes
all costs, including environmental degradation
– Gives companies financial incentives to reduce pollution
– But, costs are passed on to consumers
Market permitting and incentives
• Markets in permits can save money and produce results
• Permit trading: the government creates a market in permits
for an environmentally harmful activity
– Companies, utilities, and industries buy, sell, and trade
rights to conduct the activity
– Cap-and-trade system: the government sets the amount
of allowable pollution and issues permits to polluters to
emit a certain fraction of that amount
• Polluters can exchange these permits
• Governments can reduce the amount of emissions
Billions of dollars each year have been saved from the permit
trading system.
Ecolabeling empowers consumers
• Another strategy that uses the market to
counteract market failure
• 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
Market incentives on the local level
• Many people take part in transactions involving financial
incentives as policy tools.
– Residents pay for waste disposal according to the amount of
waste they produce.
– Power companies may offer discounts to customers who buy
high-efficiency light bulbs and appliances.
Public and private sectors can work
together
• Society is trying to take advantage of the most effective aspects of
government regulation and private enterprises.
– Combine them in public–private partnerships
– A for-profit entity performs the work efficiently so it can profit.
– The for-profit entity, however, operates within the confines
agreed upon with a public entity that acts as an overseer.
– Hopefully, the public policy goal will be achieved in a timely
and cost-efficient manner.
Conclusion
• Environmental policy is a problem-solving tool.
– It uses science, ethics, and economics.
– It requires an understanding of the political process.
• Conventional command-and-control approach
• Uses legislation and regulations
• Innovative environmental policy tools have been
developed
• Economic welfare does not require a trade-off with
environmental quality.