Transcript Document

Is Economy Enough in
Examining Environment?
Kıvanç DÜZ
2003433014
OUTLINE
Myth #1: Market solves all problems?

Karl Polanyi "The Great Transformation"

History, Economics, and Anthropology: The Work of Karl Polanyi
Myth #2: When economists do see a market problem, they always
recommend a market solution.

Kyoto Protocol

United Nations Environment Programme (UNEP)

World Trade Organization (WTO Former GATT)
Myth #3: When non-market solutions are considered, economists still
use only market prices to evaluate them.

Classical Liberalism versus Modern Liberalism

Sociologists’ Reply to Adam Smith

Sociological Paradigm on Environment
Myth #1: Market solves all problems?
Karl Polanyi in his work..
His work in Great Transformation is
“combining history, anthropology and sociology
with economy.” Kinship system did not have
important economic functions. Economic
situations changes with roles, norms of
behavior and motives.
Myth #2: When economists do see a market
problem, they always recommend a market solution
KYOTO PROTOCOL
Kyoto Protocol was set up in the end of
COP3 (Conference of Parties) in 1997.
Industrialized countries forced to decrease
%5 an average of emission of greenhouse
gases from 2008 to 2012. After US
withdrawal from Protocol, protocol lost its
power over its members.

KYOTO PROTOCOL
Some states are willing to join the Protocol,
but some of them not. States’ officials who do
not accept the Protocol believe that Protocol
will increase their costs.
Kyoto Protocol aims to create more effective
treaties and international cooperation.
KYOTO PROTOCOL
Kyoto Protocol was accepted immediately by
most countries in the world. But, its goals will
be resulted in long-term. Also, its goals are
unrealistic and inappropriate.
Kyoto Protocol tried to solve climate change
policy. Because, climate change is a
dangerous environmental risk. It created fast,
but its targets will be achieved in long-term.
Myth #2: When economists do see a market
problem, they always recommend a market solution

UNITED NATIONS ENVIRONMENT PROGRAMME
UNEP is the voice for the environment that
takes the leadership of environment by
protecting and informing people and nations.
UNEP plays educator role in the use of
planet’s natural sources.
UNITED NATIONS ENVIRONMENT
PROGRAMME
UNEP main purposes were “creating
international agreements, making powerful
institutions for management of environment,
providing knowledge and technology for
sustainable development, cooperating with
new partners in civil society and private sector.
UNITED NATIONS ENVIRONMENT
PROGRAMME
UNEP provides governments important
environmental data and information for
planning sustainable development. UNEP
builds an institutional and legal infrastructure
for global environment. UNEP deals with the
major environmental issues such as water
scarcity, marine environment and pollution.
Myth #2: When economists do see a market
problem, they always recommend a market solution

WORLD TRADE ORGANIZATION
WTO or formerly GATT plays effective role in
labor and environmental standards. Member
countries wanted to broaden WTO agenda in
order to include labor and environment.
Developing countries did not generally apply WTO
programmes which are about trade, economics
and environment. Because, they use this WTO
intervention such a limitation of their national
sovereignty.
WORLD TRADE ORGANIZATION
Main question is here “How labor and
environment should be taken as issues in the
WTO?” The answer is that tariff negotiations,
determination of domestic standard and
environment quality are necessary starting
points. There are no international
negotiations, sometimes market can not
figure out the problems.
Myth #3: When non-market solutions are considered,
economists still use only market prices to evaluate them
 CLASSICAL LIBERALISM vs MODERN LIBERALISM

Classical Liberalism
By getting government out of economy, letting the
economy alone, state will have the best system.
According to Smith, market itself will arrange the
economy. Public will have best quality goods at the
lowest prices. Supply and demand determine prices.
Invisible hand or unseen hand regulates the economy.
Society should be free as possible from government
interference.
CLASSICAL LIBERALISM vs MODERN LIBERALISM
Modern Liberalism
Thomas Green argued that free market was not as selfregulating system which solves all problems. Because,
competition is not perfect. Manufacturers can create
monopoly in market. Also, class positions play important
role. Modern liberalism helps the establishment of the
right to form unions, unemployment, health insurance,
environment protection, educational opportunity, wage
and hour laws.

Myth #3: When non-market solutions are considered,
economists still use only market prices to evaluate them

SOCIOLOGISTS’ REPLY TO ADAM SMITH
Many economists except Smith and sociologists
focused on the education effect over earnings. Smith
did not use education concept. Smith argues that
prices are arranged by supply and demand segments,
sectors and other structures of demand differences.
But, Sociologists pointed out that the demand side of
earnings determination process is ignored by
economists.
SOCIOLOGISTS’ REPLY TO ADAM SMITH
Smith made a mistake that if workers are paid
less, the marginal productivity will be lower. But, it is
a weak point of neoclassical theory. It maybe true
but in long term we are all dead or at least retired.
Smith does not solve life time in examining
problems. Maybe, workers can be paid due to its
ages. We should divide process in to two divisions
which are youth and old. Smith gave too much
credits to neoclassical economics, but he did not
give enough credit to Sociologists.
Myth #3: When non-market solutions are considered,
economists still use only market prices to evaluate them

SOCIOLOGICAL PARADIGM ON ENVIRONMENT
Environment concern is not always figured out
by the help of economics. Also, there are another
social and demographic determinants such as
age, sex, income, education, occupational
prestige, residence, political party and political
ideology.
SOCIOLOGICAL PARADIGM ON ENVIRONMENT
Age hypothesis, younger people takes care
environment more than older people. In Social Class
hypothesis, Environment is positively correlated with
social class which includes education, income, and
occupational prestige. People began to deal with
environment after their basic life demands are met.
Middle and upper classes deal with environment
less effectively than lower classes. Lower classes shows
much attention to the environment, because, they live in
highly polluted areas about bad conditions in
environment.
SOCIOLOGICAL PARADIGM ON ENVIRONMENT
Also, small towns do not concern about environment.
They focus on economic growth rather than environment.
In Political hypothesis, Democrats and liberals are more
concerned about environmental quality rather than
Republican.
In Sex hypothesis, males are more active, more deal
with public issues, have higher education than females.
But, this is a subjective approach. There is no agreement
about the relationship between sex and environmental
concern.
In Conclusion,
Researchers should not examine environment with
any help of economics. They should look other sciences
in solving environmental problems. Demographic
variables such as private property rights, laisses-faire
government and economic growth are strongly related to
environment. Demographic variables are effective
determinants in environmental protection.