ENVIRONMENTAL SCIENCE 13e

CHAPTER 17:
Environmental
Economics, Politics,
and Worldviews
Core Case Study: Chattanooga,
Tennessee
• 1960s: dirtiest air in the U.S. and polluted
river
• Vision 2000
– Encouraged zero-emission industries
– Replaced diesel buses
– Recycling
– Improved low-income housing
– Riverfront park
– Aquarium
Fig. 17-1, p. 424
 17-1 How Are Economic Systems
Related to the Biosphere?
• Concept 17-1 Ecological economists
regard human economic systems as
subsystems of the biosphere.
 Resources Supporting
Economic Systems (1)
• Economics
– Production, distribution, and
consumption of goods and services to
satisfy wants and needs
– Market-based systems interact through
sellers and buyers
– Supply and demand determines prices
 Resources Supporting
Economic Systems (2)
• Natural capital
• Human capital/human resources
• Manufactured
capital/manufactured resources
Fig. 17-2, p. 426
 + + =

Natural Capital Manufactured Human Capital Goods and Services

Capital

Fig. 17-2, p. 426

Fig. 17-3, p. 426
 Inputs System Outputs
(from environment) throughputs (into environment)

High-quality Low-quality
energy energy (heat)
High-waste
economy
High-quality Waste and
matter pollution

Fig. 17-3, p. 426

Economic Importance of Natural
Resources
• Neoclassical economists
• Ecological economists
• Environmental economics takes middle
ground
– Some forms of economic growth
discouraged
– Environmentally sustainable economy –
eco-economy
Fig. 17-4, p. 427
 Solar Capital

Goods and services

Economic
Systems Heat

Production
Natural Capital
Depletion of nonrenewable
Natural resources
resources
such as air, land, soil,
biodiversity, minerals,
and energy, and natural
services such as air and Degradation of renewable
water purification, resources
Consumption (used faster than replenished)
nutrient cycling, and
climate control
Pollution and waste
(overloading nature’s waste
disposal and recycling systems)

Fig. 17-4, p. 427

17-2 How Can We Use Economic Tools
to Deal with Environmental Problems?
• Concept 17-2 We can use resources
more sustainably by including their harmful
environmental and health costs in the
market prices of goods and services (full-
cost pricing), subsidizing environmentally
beneficial goods and services, taxing
pollution and waste instead of wages and
profits, and reducing poverty.
 External Costs (1)
• Market price leaves out
environmental and health costs
associated with its production =
external costs (hidden costs)
• Goods and services exclude external
costs
 External Costs (2)
• Excluding external costs
– Hinders development of green goods
and services
– Promotes pollution
– Fosters waste and environmental
degradation
Use of Environmental Economic
Indicators
• Gross domestic product (GDP)
does not measure environmental
degradation
• Green indicators
• Genuine progress indicator (GPI)
monitors environmental well-being
 Genuine Progress Indicator

Genuine Benefits not Harmful

progress GDP included in environmental
indicator market transactions & social costs
= + -
Fig. 17-5, p. 428
Include Harmful Environmental Costs in
Prices of Goods and Services
• Environmentally honest market system
• Not widely used
– Wasteful and harmful producers would go
out of business
– Difficult to estimate environmental costs
– Most consumers do not connect
environmental costs with purchases
• Government action needed
 Reward Environmentally
Sustainable Businesses
• Encourage shifts
– Phase out harmful subsidies and tax
breaks
– Phase in environmentally beneficial
subsidies
• Harmful subsidies cost $2 trillion per
year globally
Fig. 17-6, p. 430
 Trade-Offs
Environmental Taxes and Fees
Advantages Disadvantages
Help bring about full-cost Low-income groups are
pricing penalized unless safety
nets are provided

Encourage businesses to
develop environmentally
beneficial technologies and Hard to determine optimal
goods to save money level for taxes and fees

Easily administered by
existing tax agencies
Governments may use
money as general revenue
instead of improving
environmental quality and
reducing taxes on income,
Fairly easy to detect cheaters payroll, and profits
Fig. 17-6, p. 430
 Tax Pollution and Waste
• Green taxes discourage pollution and
waste
• Current tax system
– Discourages jobs and profit-driven
innovation
– Encourages pollution, resource waste,
degradation
• Tax shift towards green taxes needed
 Encouraging Innovations
• Regulation
• Laws – command and control
• Incentive-based regulations
• European experience positive for
innovation-friendly regulations
 Use of the Marketplace
• Incentive-based model
• Government caps on total pollution
levels
– Tradable pollution
– Resource-use permits
• Shown to reduce pollution
Fig. 17-7, p. 431
 Trade-Offs
Tradable Environmental Permits
Advantages Disadvantages
Flexible Big polluters and resource
wasters can buy their way out
Easy to administer
May not reduce pollution at
dirtiest plants
Encourage pollution
prevention and waste
reduction Can exclude small companies
from buying permits

Permit prices determined by

Caps can be too high and not
market transactions
regularly reduced to promote
progress
Confront ethical problem of
how much pollution or Self-monitoring of emissions
resource waste is acceptable can promote cheating

Fig. 17-7, p. 431

 Selling Services Instead of
Things
• Shift from material-flow economy to
service-flow economy
• Make more money by eco-leasing
• Eco-leasing examples
– Xerox
– Carrier
 Individuals Matter: Ray
Anderson
• Inspired by Hawken’s The Ecology of
Commerce
• His Interface tile company
– Reduced solid waste 75%
– Reduced gas emission 82%
– Lowered energy consumption 27%
– Electricity from renewable sources 88%
– Saved $393 million
 Reducing Poverty Helps the
Environment
• Poverty – harmful health and
environmental effects
• Reducing poverty benefits individuals,
economies, and the environment
 Actions to Reduce Poverty
• Combat malnutrition
• Combat infectious diseases
• Provide primary school education
• Stabilize population growth
• Reduce national ecological footprints
• Invest in small-scale infrastructure
• Encourage small loans to poor people
 Individuals Matter: Muhammad
Yunus and Microloans
• Poor lack credit record and assets for
loans
• Microcredit
• Grameen Bank, Bangladesh
– Repayment rate of 95%
– Inspired other microloan projects
Millennium Development Goals
• Reduce poverty, hunger, and improve
health care
• Developed countries agreed to
devote 0.7% of national income
• Average has only been 0.28%
Fig. 17-8, p. 433
 Expenditures per year (2006) $1.2 trillion
World military

U.S. military $560 billion

(including Iraq)
U.S. highways $29 billion
U.S. potato chips
and similar snacks $22 billion

U.S. pet foods $19 billion

U.S. EPA $8 billion

U.S. foreign aid $8 billion

U.S. cosmetics $8 billion

Fig. 17-8, p. 433

Fig. 17-8, p. 433
 Expenditures per year needed to
Reforest
the earth $6 billion
Protect
tropical forests $8 billion
Restore
rangelands $9 billion
Stabilize
water tables $10 billion
Deal with global
HIV/AIDS $10 billion
Restore
fisheries $13 billion
Provide universal
primary education and $16 billion
eliminate illiteracy
Protect topsoil $24 billion
on cropland
Protect
biodiversity $31 billion

Provide basic
health care for all $33 billion
Provide clean drinking
water and sewage $37 billion
treatment for all
Eliminate hunger $48 billion
and malnutrition
Total Earth Restoration and Social Budget

$245 billion
Fig. 17-8, p. 433
Fig. 17-9, p. 434
 Inputs System Outputs
(from environment) throughputs (into environment)

Energy Low-quality
High-quality
conservation energy (heat)
energy Low-waste
Waste and economy
High-quality pollution Pollution Waste and
matter prevention control pollution

Recycle and
reuse

Fig. 17-9, p. 434

Fig. 17-10, p. 435
 Environmentally
Sustainable
Economy
Economics (Eco-Economy)
Reward (subsidize) environmentally
sustainable economic development
Penalize (tax and do not subsidize)
environmentally harmful economic growth
Shift taxes from wages and profits to
pollution and waste
Use full-cost pricing
Sell more services instead of more things
Do not deplete or degrade natural capital
Live off income from natural capital
Reduce poverty
Use environmental indicators to measure
progress
Certify sustainable practices and products
Use eco-labels on products

Resource Use and Pollution

Cut resource use and waste by reducing,
reusing, and recycling
Improve energy efficiency
Rely more on renewable solar, wind and
geothermal energy
Shift from a nonrenewable carbon-based
(fossil fuel) economy to a non-carbon
renewable energy economy

Ecology and Population

Mimic nature
Preserve biodiversity
Repair ecological damage
Stabilize human population
Fig. 17-10, p. 435
Economics Environmentally
Reward (subsidize) environmentally sustainable Sustainable
economic development Economy
Penalize (tax and do not subsidize) environmentally (Eco-Economy)
harmful economic growth
Shift taxes from wages and profits to pollution and waste
Use full-cost pricing
Sell more services instead of more things
Do not deplete or degrade natural capital
Live off income from natural capital
Reduce poverty
Use environmental indicators to measure progress
Certify sustainable practices and products
Use eco-labels on products

Resource Use and Pollution

Cut resource use and waste by reducing, reusing,
and recycling
Improve energy efficiency
Rely more on renewable solar and geothermal energy
Shift from a nonrenewable carbon-based (fossil fuel)
economy to a non-carbon renewable energy economy
Ecology and Population
Mimic nature
Preserve biodiversity
Repair ecological damage
Stabilize human population Stepped Art
Fig. 17-10, p. 435
Fig. 17-11, p. 436
17-3 How Can We Implement More Sustainable
and Just Environmental Policies?

• Concept 17-3 Individuals can work

together to become part of political
processes that influence how
environmental policies are made and
implemented. (Individuals matter)
 Democracies
• Policies
• Politics
• Democracy
• Political institutions
– Legislative
– Executive
– Judicial
– Federal, state and local governments
 Democratic Government and
Environmental Problems
• Complex problems – biodiversity,
climate change
• Long-term problems need integrated
solutions
• Lack of environmental knowledge of
political leaders
 Principles for Environmental
Policies (1)
• Humility principle
• Reversibility principle
• Net energy principle
• Precautionary principle
 Principles for Environmental
Policies (2)
• Prevention principle
• Polluter-pays principle
• Public access and participation
principle
• Environmental justice principle
 Case Study: Managing Public
Lands in the United States (1)
• Federal government manages 35% of
the country’s land
• National Forest System – U.S. Forest
Service
• Bureau of Land Management
• National Wildlife Refuges – U.S. Fish
and Wildlife Service
 Case Study: Managing Public
Lands in the United States (2)
• The National Park System
• National Wilderness Preservation
System
• Contain valuable natural resources
• Use of lands controversial
– Conservation biologists/environmental
economists
– Developers/resource extractors
 Four Principles of Public Land
Use
1. Protect biodiversity, wildlife habitat,
and ecosystems
2. No subsidies or tax breaks to extract
natural resources
3. Fair compensation for use of property
4. Users of resource extractions
responsible for environmental damage
Fig. 17-12, p. 438
 Individuals Matter
• People create change together –
grassroots
• Politics local at a fundamental level
• Be an environmental leader
– Lead by example
– Work within existing systems
– Run for local office
– Propose and work for better solutions
Fig. 17-13, p. 439
 United States Environmental
Laws Under Attack
• Opposition
– Corporate leaders
– Individuals who feel threatened by
environmental laws
– State and local government officials resent
implementation of federal laws
• Most federal environmental laws and
regulatory agencies weakened since 2000
Fig. 17-14, p. 440
Supplement 5, Fig. 1, p. S21
Nongovernmental Organizations
(NGOs)
• Range from grassroots to global
organizations
• Bottom-up changes
• Citizen-based global sustainability
movement
• Tactics
 Individuals Matter: “Butterfly”
• Julia Hill
• 2 years in a giant redwood tree in
California
• Nonviolent civil disobedience
• Lumber company preserved her tree
and 200-foot circle around it
 Students and Educational Institutions
Can Play Important Environmental Roles
• Student environmental awareness
increasing
• Environmental audits – change on
campuses
• Oberlin College in Ohio
 Importance of Environmental
Security
• As important as military and
economic security
• Depletion of natural capital leads to
instability
 Stronger International
Environmental Policies (1)
• United Nations
– U.N. Environmental Programme
– World Health Organization
– U.N. Development Programme
– Food and Agriculture Organization
• World Bank
• Global Environmental Facility
• World Conservation Union
 Stronger International
Environmental Policies (2)
• International Organizations
– Expand understanding of environmental
issues
– Gather and evaluate environmental data
– Develop and monitor international
treaties
– Provide grants and loans to reduce
poverty
– Helped >100 nations develop
environmental laws and institutions
 17-4 What Are Some Major
Environmental Worldviews?
• Concept 17-4 Major environmental
worldviews differ over what is more
important – human needs and wants,
or the overall health of ecosystems
and the biosphere; different
worldviews include varying mixes of
both priorities.
 Planetary Management
Worldview
• Humans apart from nature
• Manage nature to meet our needs and
wants
• Technology will keep us from running out
of resources
• Economic growth potential essentially
unlimited
• Manage earth and life for our benefit
 Stewardship Worldview
• Ethical responsibility to be stewards
• Probably won’t run out of resources, but
don’t waste them
• Encourage environmentally beneficial
economic growth
• Success depends on managing earth’s
systems for our benefit and the rest of
nature
 Environmental Wisdom
Worldview
• We are part of nature
• Nature exists for all species
• Resources are limited and shouldn’t
be wasted
• Encourage earth-sustaining economic
growth
• Success depends on learning about
nature and integrating ourselves into
nature
Fig. 17-15, p. 444
 Environmental Worldviews

Planetary Management Stewardship Environmental Wisdom

■ We have an ethical responsibility ■ We are a part of and totally
■ We are apart from the rest of dependent on nature, and nature
to be caring managers, or
nature and can manage nature stewards, of the earth. exists for all species.
to meet our increasing needs
and wants. ■ We will probably not run out of ■ Resources are limited and should
resources, but they should not not be wasted.
■ Because of our ingenuity and be wasted.
technology, we will not run out ■ We should encourage earth-
of resources. ■ We should encourage
environmentally beneficial forms sustaining forms of economic
of economic growth and growth and discourage earth-
■ The potential for economic degrading forms.
discourage environmentally
growth is essentially unlimited. harmful forms.
■ Our success depends on learning
■ Our success depends on how ■ Our success depends on how how nature sustains itself and
well we manage the earth's life- well we manage the earth's life- integrating such lessons from
support systems mostly for our support systems for our benefit
nature into the ways we think
benefit. and for the rest of nature.
and act.

Fig. 17-15, p. 444

 Environmental Worldviews

Planetary Management Stewardship Environmental Wisdom

■ We have an ethical
■ We are a part of and totally
■ We are apart from the rest of responsibility to be caring
dependent on nature, and
nature and can manage nature managers, or stewards, of the
nature exists for all species.
to meet our increasing needs earth.
and wants. ■ We will probably not run out ■ Resources are limited and
of resources, but they should should not be wasted.
■ Because of our ingenuity and not be wasted.
technology, we will not run out ■ We should encourage earth-
■ We should encourage sustaining forms of economic
of resources.
environmentally beneficial forms growth and discourage earth-
■ The potential for economic of economic growth and degrading forms.
growth is essentially unlimited. discourage environmentally
harmful forms. ■ Our success depends on
■ Our success depends on
■ Our success depends on how learning how nature sustains
how well we manage the
well we manage the earth's life- itself and integrating such
earth's life- support systems
support systems for our benefit lessons from nature into the
mostly for our benefit.
and for the rest of nature. ways we think and act.

Stepped Art
Fig. 17-15, p. 444
 Science Focus: Biosphere 2
• Self-sustaining glass and steel
enclosure
• Artificial ecosystems and species
from various biomes and aquatic
systems
• Unexpected problems unraveled life-
support system
• Large-scale failure of biosphere’s
species
 17-5 How Can We Live More
Sustainably?
• Concept 17-5 We can live more
sustainably by becoming
environmentally literate, learning from
nature, living more simply and lightly
on earth, and becoming active
environmental citizens.
 Three Important Ideas
1. Natural capital matters
2. Our ecological footprints are
immense and are expanding rapidly
3. Ecological and climate change
tipping points are irreversible and
should never be crossed
 Environmental Literacy (1)
• Understand as much as possible about
how earth works and sustains itself
• Use knowledge of earth and
sustainability to guide our lives,
communities, and societies
• Understand the role of economics in
promoting sustainability
 Environmental Literacy (2)
• Use critical thinking skills
• Understand and evaluate
environmental worldviews
Fig. 17-16, p. 446
Fig. 17-16, p. 446
 We Can Learn from Nature
• Kindle a sense of awe, wonder,
mystery, and humility
• Develop a sense of place
• Choose to live more simply and
sustainably
• Gandhi’s principle of enoughness
• Reduce environmental footprint
Fig. 17-17, p. 447
 Solutions
Some Guidelines for
Living More Sustainably
Learn about, respect, and mimic
how nature sustains itself
Do not degrade or deplete the
earth's natural capital
Take no more from nature than
what nature can replenish

Do not waste matter and energy

resources

Protect biodiversity
Avoid climate-changing activities
Help maintain the earth's capacity
for self-repair
Repair ecological damage that we
have caused
Leave the world in as good a
condition as we found or better
Cultivate a passion for sustaining
all life and let this passion energize
your actions
Fig. 17-17, p. 447
 Avoid the Mental Traps
• Gloom-and-doom pessimism
• Blind technological optimism
• Paralysis by analysis
• Faith in simple, easy answers
Fig. 17-18, p. 448
 Insulate your house
and plug air leaks
Use renewable energy, Reduce meat consumption
especially wind and direct solar

Use energy-efficient
heating and cooling Buy locally grown food
systems, lights, and
appliances

Reduce, reuse, Buy or grow

and recycle organic food

Use water-saving Don't use

appliances and pesticides on your
irrigation methods garden or lawn

Reduce car use Walk, bike,

Drive an carpool, or take mass
energy-efficient transit whenever possible
vehicle
Fig. 17-18, p. 448
 Interrelated Components of
Sustainability Revolution
• Biodiversity protection
• Commitment to eco-efficiency
• Energy transformation
• Pollution prevention
• Emphasis on sufficiency
• Demographic equilibrium
• Economic, political transformation
Fig. 17-19, p. 449
Current Emphasis Sustainability Emphasis

Pollution cleanup Pollution prevention

Waste disposal
Waste prevention
(bury or burn)

Protecting species Protecting habitat

Environmental Environmental
degradation restoration

Increasing resource Less resource waste

use

Population growth Population stabilization

Depleting and
degrading natural Protecting natural
capital capital
Fig. 17-19, p. 449
Fig. 17-20, p. 450
Change

Environmental Concerns Social Trends Economic Tools Technologies

Protecting natural capital Reducing waste Full cost pricing Pollution prevention
Sustaining biodiversity Using less Micro-lending Organic farming
Repairing ecological damage Living more simply Green subsidies Drip irrigation
Addressing climate change Reusing and recycling Green taxes Solar desalinization
Growth of ecocities and Net energy analysis Energy efficiency
eco-neighborhoods Solar energy
Environmental justice Wind energy
Environmental literacy Geothermal energy
Environmental nanotechnology
Eco-industrial parks

Time

Fig. 17-20, p. 450

 Three Big Ideas from This
Chapter - #1
A more sustainable economic system
would include the harmful environmental
and health costs of producing and using
goods and services in their market
prices, subsidize environmentally
beneficial goods and services, tax
pollution and waste instead of wages
and profits, and reduce poverty.
 Three Big Ideas from This
Chapter - #2
Individuals can work together to
become part of the political processes
that influence how environmental
policies are made and implemented.
 Three Big Ideas from This
Chapter - #3
Living more sustainably means
becoming environmentally literate,
learning from nature, living more
simply, and becoming active
environmental citizens.
Animation: Resources Depletion
and Degradation

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ANIMATION
Animation: Two Views of
Economics

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ANIMATION