Transcript econ and pol

Economics, Politics, Environment,
and Sustainability
Brian Kaestner
Saint Mary’s Hall
Thanks to Miller and Clements
Economic Resources
Economic decisions
Economic resources
Natural resources
Human resources
Financial resources
Manufactured resources
Cultivated resources
Supply
curve
Demand curve
Quantity
demanded
Quantity
supplied
Price (low to high)
Surplus
If the price is too
high, more oil is
available than buyers
are willing to buy
At this market equilibrium
price, the quantity of oil that
suppliers are willing to sell is
the same as the quantity
buyers are willing to buy
If the price is too low
buyers want to buy more
than supplies are
willing to sell
Quantity
supplied
Shortage
Quantity
demanded
Quantity
New demand
curve
Supply curve
Price (low to high)
Old demand
curve
New
equilibrium
price and
quantity
Black
New
Because of the
shortage, buyer are
willing to pay more.
This establishes a new
market equilibrium point
Increased demand
is higher than
supply so there is a
shortage
Old
Old equilibrium
price and
quantity
Old
New
Quantity
New supply curve
Price (low to high)
Demand
curve
Old supply curve
New equilibrium
price and
quantity
Because of the
shortage, buyers are
willing to pay more.
This establishes a new
market equilibrium point.
New
Old
New
Supply is lower
than demand,
so there is a
shortage
Old
Quantity
Old equilibrium
price and
quantity
Economic Systems
Pure command economic systems
Pure free-market economic system
Market price equilibrium point
Capitalist market economic systems
Mixed economic systems
Global market economy
Ecological Economics
sun
Earth
Economic
Systems
Natural
Capital
Air; water,
land, soil,
biodiversity,
minerals,
raw materials,
energy
resources,
and dilution,
degradation,
and recycling
services
Production
Heat
Depletion of
nonrenewable
resources
Degradation and
depletion of renewable
resources used faster
than replenished
Consumption
Recycling and reuse
Pollution and waste
from overloading
nature’s waste disposal
and recycling systems
Economic Growth
 Economic
growth
 Environmentally
sustainable
economic
development
Characteristic
Unsustainable
Economic Growth
Environmentally
Sustainable
Economic
Development
Production emphasis
Quantity
Quality
Natural resources
Not very important
Very important
Resource productivity
Inefficient
(high waste)
Efficient
(low waste)
Resource throughput
High
Low
Resource type
emphasized
Nonrenewable
Renewable
Resource fate
Matter discarded
Matter recycled,
reused, or
composted
Pollution control
Cleanup
(output reduction)
Prevention
(input reduction)
Guiding principles
Risk–benefit
analysis
Prevention and
precaution
Cost per unit pollutant removed ($)
It is very expensive
to try to get to
zero pollution
As more pollutants are
removed, the cost of removing
each additional unit increase
0
25%
50%
75%
Percentage of pollutants removed
100%
This curve is the
sum of the two
bottom curves
High
Costs
Minimal
effort
Cost to
society
Low
100%
Zero discharge
(toxic waste)
Most
cost-effective
effort
Better
effort
Cleanup
costs
Extra
cost
75%
50%
Pollution remaining
25%
0%
Harmful External Costs and FullCost Pricing
Internal costs
External benefit
External costs
Full-cost pricing
Internalizing external costs
Costs of Pollution
Direct costs
Indirect costs
Repercussion costs
Consumer (user) pays
Taxpayer pays
Making the Transition to Environmentally
Sustainable Economies
 Implementation of life-cycle
management
 Improving energy efficiency
 Inventing more sustainable technologies
 Improving public awareness
Case Study: Environmental Policy
in the United States
Lobbyists
Lobbyists
Lawmaking body
Special
interest
groups
Public
advisory
Public
hearing
Legal action
Regulating
enforcement
body
Laws and
regulations
Legal action
Environmental
organizations
Courts
Lawyers
Lawyers
Laws and regulations
Membership support
Boycotts
Individual
Purchase recyclable,
recycled, and
Donate clothes
Plant a garden
environmentally
and used
Recycle cans,
safe products
goods
bottles,
to
charities
paper,
and plastic
Corporations
and small
business
Use water,
energy,
and other
resources
efficiently
Use mass transit,
walk, ride a
bike, or carpool
Factors Hindering Democracies in
Dealing with Environmental Problems
 Reactive to problems instead of proactive
 Short time between elections shift focus
to short-term issues
 Major affected groups do not vote; no
obligation on the part of politicians
 Elected officials spend much time raising
money to be reelected
Environmental Groups and Claims
Mainstream groups
Grassroots groups
Specific issue focus
Raise understanding or awareness
of issues
Many groups but not much
cohesiveness
Anti-Environmental Groups and
Claims
 Threatened by environmental regulations
 Threats to private rights or property
 Spend much time attempting to discredit
legitimate groups
 Often use “environmentally-friendly”
sounding names
 Raise questions and doubt in the minds of
citizens