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Regular Assignment 1

This document is an assignment submitted by Yohannes azegaj to their instructor Negash Mulatu for their Natural Resource and Environmental Economics course at Addis Ababa University. The assignment covers two chapters that introduce environmental economics and issues related to the environment and development. It discusses how environmental economics examines the relationship between human economies and natural systems, as well as different models and approaches to analyzing the impacts of population growth, economic development, and poverty on the environment. Principles of sustainable development and resource management are also outlined.

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Yohannes Azegaj
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109 views

Regular Assignment 1

This document is an assignment submitted by Yohannes azegaj to their instructor Negash Mulatu for their Natural Resource and Environmental Economics course at Addis Ababa University. The assignment covers two chapters that introduce environmental economics and issues related to the environment and development. It discusses how environmental economics examines the relationship between human economies and natural systems, as well as different models and approaches to analyzing the impacts of population growth, economic development, and poverty on the environment. Principles of sustainable development and resource management are also outlined.

Uploaded by

Yohannes Azegaj
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Addis Ababa University

College of Business and Economics


Department of Economics

Natural Resource and Environmental Economics


Individual Assignment 1
Programme:Regular
Yohannes azegaj
ID No BER/1713/11
Submitted to: instructor Negash Mulatu

ADDIS ABABA UNIVERSITY


Chapter 1: Introduction to environmental economics.
 Natural resource economics is a transdisiplinary field of academic that aims to
address the connections and interdependence between human economies and
natural ecosystems. Its focus is how to operate an economy within the ecological
constraints of earth's natural resources.
 Environmental and natural resource economics is also the application of the
principles of economics to the study of how environmental and natural resources
are developed and managed. It focuses on weighing the private and public
implications of choices that we make ranging from a local through a global scale.
 It is to better understand the role of natural resources in the economy in order to
develop more sustainable methods of managing those resources to ensure their
availability for future generations.
 It examines the waste products or residuals from production and consumption
and how to reduce or mitigate the flow of residuals so they have less damage on
the natural environment and depletion of natural capital.
 There are environmental causes for economic problems and economic Causes for
environment problems. There are economic solution for environment problems
and environment solution for economic problems.
 In the same way, environment theories are needed for Economic theories and
economic theories are essential for environment theories.

Models
Two antagonistic thoughts/models established for thinking systematically about the future of
the world’s economy. These two models are the following:

1. The basic pessimists.


 Within a time span of less than 100 years, society will run out of non-
renewable resources on which the industrial base depends.
 Piecemeal approaches to solving the individual problems will not be
successful.
 Overshoot and collapse can be avoided only by an immediate limit on
population and pollution, as well as a cessation of economic growth.
2. The basic optimists.
Their vision is an optimistic one based in large part on the continuing evolution of a form
of technological progress that serves to push back the natural limits until they are no
longer limiting

Chapter 2: Some Issues on the Environment and Development


The growth of the world’s population is emerging development and environmental issue.
The environment is a commodity. Whatever other value society may impute to an
environmental resource, it will typically also impute an economic value to it. Over time
this value to a community will change.
The problems and challenges facing the environment are vast and diverse. And
much of the current anxiety regarding environmental problems revolves around
climate change, ozone depletion, Loss of biodiversity, destruction of the world’s rain
forests, air and water pollution, chemical and energy production risks.
population growth and economic development occurred simultaneously with
increasingly unsustainable utilization of the earth‘s physical environment.
There is variation in studies on the nexus between the environment and population
growth.
As a result, there are diversified approaches and methods of analysis.
a) The linear approach
b) The multiplicative approach
c) The mediating-factor approach
d) The development-dependency approach
e) The systems approach
Economic growth is influenced by the relative scarcity of environmental resources, as
the environment is used for the extraction of material inputs and the disposal of
residuals.
It is also conceivable that the degradation of environmental resources might
significantly reduce future consumption potential.
Growth and new investment stimulate technological change. However, the size of
modern industrial output, the rapid technological development, the continued pressure
for more material growth has increased the rate of environmental change.
Poverty is a significant cause of environmental problems. Highest air pollution is
recorded not only, as might be expected, in the highly industrialized cities of the high-
income countries, but also in the major cities of low income countries.
Sustainable development is development that seeks to meet the needs and aspirations
of the present without compromising the ability to meet those of the future.
There are two types of sustainability
Weak Sustainability: is a sustainability concept which supposes that we can substitute
between human made capital and natural capital in production and consumption, such
that economic growth can be associated with improvements in environmental quality.

Strong Sustainability: in contrast to the above, this posits that natural and human-made
capitals are complements and cannot be substituted for each other in either production
or consumption. Consequently, economic growth that uses natural resources and
generates wastes must increase environmental degradation.
Principles of sustainable development and resource management
The full–cost principle: According to this principle all users of environmental resources
should pay their full cost.
The cost-effectiveness principle: A policy is cost-effective if it achieves the policy
objectives at the lowest possible cost.
The property rights principle: Environmental problems can be created by unspecified
property rights
The sustainability principle: According to this principle all resources should be used in a
manner which respects the needs of future generations.
Strategies for sustainable development and resource management
 Greater attention to the problems of the poor people of the world:
 Local input in planning and managing resource development:
 Proper resource pricing
 Wiser management:
 Better management capability
 Fewer throughputs
 Redistribution of wealth and power
 Nondestructive resource uses: By focusing on activities that use intangible
resources such as information, creativity, communications, leisure, and art, we
can have a life rich in values but with minimal impact on environmental
resources.
As the scale of economic activity has proceeded steadily upward, the scope of
environmental problems triggered by that activity has transcended geographic and
generational boundaries.

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