Economics is a social science that deals with the production, distribution, and consumption of goods and services to satisfy people’s needs and wants. Marketbased economic system—buyers and sellers interact in markets to make economic decisions about how goods and services are produced, distributed, and consumed. In a freemarket economic system, all economic decisions are governed solely by the competitive interactions of supply, demand, and price.
Economics & Environmental Policy OUTLINE Environmental economics What is economics? • Economics is a social science that deals with the production, distribution, and consumption of goo ds and services to satisfy people’s needs and wants • Market-based economic system—buyers and sellers interact in markets to make economic decisi ons about how goods and services are produced, distributed, and consumed – In a free-market economic system, all economic decisions are governed solely by the competitive interactions o f supply, demand, and price What is economics? • Three types of capital, or resources, are used to produce goods and services – Natural capital includes resources and services produced by the earth’s natural processes, which support all ec onomies and all life – Human capital, or human resources, includes people’s physical and mental talents that provide labor, innovatio n, culture, and organization – Manufactured capital, or manufactured resources, are items such as machinery, equipment, and factories made from natural resources with the help of human resources Most economic systems use three types of resources to produce goods and services Economists disagree over the importance of natural capital and the sustainability of economi c growth • Economic growth for a city, state, country, or company is an increase in its capacity to provide goo ds and services to people • Economic development is the improvement of human living standards made possible by economi c growth • High-throughput economies attempt to boost economic growth by increasing the flow of natural m atter and energy resources through their economic systems to produce more goods and services The high-throughput economies of most of the world’s more-developed countries rely on continually increasing the flow of energy and matter resources to increase economic growth Economists disagree over the importance of natural capital and the sustainability of economi c growth • Neoclassical economists, following the ideas of Alfred Mars hall (1842–1924) and Milton Friedman (1912–2006) view th e earth’s natural capital as a subset, or part, of a human eco nomic system and assume that the potential for economic g rowth is essentially unlimited and is necessary for providing businesses with profits and workers with jobs Economists disagree over the importance of natural capital and the sustainability of economi c growth • Ecological economists believe that: – There are no substitutes for many vital natural resources such as air, water, a nd biodiversity, or for nature’s free ecological services such as climate control , pest control, and nutrient recycling – Economic systems are subsystems of the biosphere that depend heavily on t he earth’s irreplaceable natural resources and services – Conventional economic growth eventually will become unsustainable becaus e it can deplete or degrade various irreplaceable forms of natural capital, and because it will exceed the capacity of the environment to handle the pollutant s and wastes we produce Economists disagree over the importance of natural capital and the sustainability of economi c growth • The models of ecological economists are built on three major assumptions – – Resources are limited and should not be wasted; there are no substitutes for most types of natural capital We should encourage environmentally beneficial and sustainable forms of economic development, and discourage environmentally harmful and unsustainable forms of economic growth – The harmful environmental and health effects of producing and using economic goods and services should be inclu ded in their market prices (full-cost pricing), so that consumers will have more accurate information about these effe cts Environmental security is as important as military and economic sec urity • These and other international organizations have played important roles in: – – – – – Expanding global understanding of environmental issues; Gathering and evaluating environmental data Developing and monitoring international environmental treaties Providing grants and loans for sustainable economic development and reducing poverty Helping more than 100 nations to develop environmental laws and institutions OUTLINE Environmental economics We can become more environmentally literate • Increase literacy by understanding three important ideas: – Natural capital matters because it supports the earth’s life and our economies – Our ecological footprints are immense and are expan ding rapidly – Ecological and climate change tipping points are irrev ersible and should never be crossed Questions to answer How does life on earth sustain itself? Components Basic concepts: sustainability, natural capital, exponential growth, carrying capacity How am I connected to the earth and other living things? Three scientific principles of sustainablility Where the things I consume come from and where they go after I use them? Environmental history What is environmental wisdom? The two laws of thermodynamics and the law of conservation of matter What is my environmental worldview? Basic principles of ecology: food webs, nutrient cycling, biodiversity, ecological What is my environmental responsibility as a human being? succession Population dynamics Sustainable agriculture and forestry Soil conservation and sustainable water use Achieving environmental literacy Nonrenewable mineral resources Nonrenewable and renewable energy resources Climate disruption and ozone depletion Pollution prevention and waste reduction Environmentally sustainable economic and political systems Environmental worldviews and ethics Three social science principles of sustainability Fig 17-20, p 458 We can learn from the earth • • Appreciation for ecological, aesthetic, and spiritual value of nature Not simply a lack of environmental literacy but also many people lack intimate contact with nature and have a limited understanding of how it sustains us • • Humans have more power than ever before to disrupt nature Direct experiences with nature reveal parts of the complex web of life that cannot be built with tec hnology or in a chemical lab, bought with money, or reproduced with genetic engineering • The healing of the earth and the healing of the human spirit are one and the same We can live more simply and lightly on the earth • • Sustainability is about sustaining the entire web of life Ethical guidelines for achieving more sustainable and compassionate societies by converting envi ronmental concerns, literacy, and wisdom into environmentally responsible actions: – – – – – – Use the three principles of sustainability to mimic the ways in which nature sustains itself Do not deplete or degrade the earth’s natural capital Do not waste matter and energy resources Protect biodiversity Repair ecological damage that we have caused Leave the earth in as good a condition as we found it, or better We can live more simply and lightly on the earth • People who have a habit of consuming excessively should to learn how to live more simply and s ustainably – Seeking happiness through the pursuit of material things is considered folly by almost every major religion and philosophy – Modern advertising persistently encourages people to buy more and more things to fill a growing list of wants a s a way to achieve happiness – Mark Twain put it: “Civilization is the limitless multiplication of unnecessary necessities.” We can live more simply and lightly on the earth • A growing number of people really want is more community, greater and more fulfilling interaction s with family, friends, and neighbors, and a greater opportunity to express their creativity and to h ave more fun • Some affluent people are adopting a lifestyle of voluntary simplicity, in which they seek to learn ho w to live with much less than they are accustomed to having – – A life based mostly on what one owns is not fulfilling Living with fewer material possessions and using products and services that have a smaller environmental imp act – Instead of working longer to pay for bigger vehicles and houses, they are spending more time with their loved o nes, friends, and neighbors – Shifting from a culture of “faster, bigger, and more” to one of “slower, smaller, and less.” The sustainability eight: ways in which people can live more lightly on the ear th We can bring about a sustainability revolution during your lifetime • • Time for an environmental or sustainability revolution Three social science principles of sustainability: – Full-cost pricing (from economics): in working toward this goal, we would find ways to include in market prices t he harmful environmental and health costs of producing and using goods and services – Win-win solutions (from political science): by focusing on solutions that will benefit the largest possible number of people, as well as the environment, we might learn to work together consistently in dealing with environment al problems – A responsibility to future generations (from ethics): through this principle, we would accept our responsibility to l eave the planet’s life-support systems in at least as good a shape as what we now enjoy, for all future generatio ns Cultural shifts in emphasis that will be necessary to bring about the environm ental or sustainability revolution The three social science principles of sustainability Change can occur very rapidly Three big ideas • A more sustainable economic system would include the harmful environmental and health costs o f producing and using goods and services in their market prices, subsidize environmentally benefi cial goods and services, tax pollution and waste instead of wages and profits, and reduce poverty • Individuals can work together to become part of the political processes that influence how environ mental policies are made and implemented • Living more sustainably means becoming environmentally literate, learning from nature, living mor e simply, and becoming active environmental citizens Background reading Chapter 17 Environmental economics, politics and worldviews 434 ... 446 Environmentally Sustainable Businesses and Careers OUTLINE Environmental economics Certain principles can guide us in making environmental policy • Several principles designed to minimize environmental...OUTLINE Environmental economics What is economics? • Economics is a social science that deals with the production, distribution, and consumption... and services that are environmentally or soci ally beneficial and those that are harmful Environmental economic indicators could help us reduce our environmental i mpact • Environmental and ecological