Environmental Science

Chapter 17

Environmental Economics,
Politics, and Worldviews

Presented by Nguyen Thi Hoang Hai

Outline
1. How are economic systems related to the biosphere?
2. How can we use economic tools to deal with environmental
problems?
3. How can we implement more sustainable and just
environmental policies?
4. What are some major environmental worldviews?
5. How can we live more sustainably?

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Core Case Study: The United States, China, and
Sustainability
▪ The U.S. and China lead the world in both resource
consumption and in the production of wastes and
pollutants
• In the U.S., public awareness has given rise to environmental
laws that improve environmental quality
• If everyone in the world used resources equal to what the average
American uses, we would need about five planet Earths to
support them

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Core Case Study: The United States, China, and
Sustainability
▪ China has the world’s largest population and the second
largest economy
• Severe environmental problems; may soon have the world’s
largest ecological footprint

▪ What is the difference between a per capita and a total

ecological footprint?
▪ How will the combined ecological footprints of the U.S.
and China impact global sustainability?

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The per capita ecological footprint in China is about one-sixth that of the
United States.
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17.1 How Are Economic Systems Related to the
Biosphere?
▪ Human economic systems are regarded as subsystems
of the biosphere by ecological economists.

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Economic Systems Depend on Natural Capital

▪ Economics deals with the production, distribution, and

consumption of goods and services
• Market-based economies: buyers and sellers interact
competitively for goods and services
• Free-market economies: decisions are based on supply, demand,
and price
❖ When demand exceeds supply, prices rise
❖ When supply exceeds demand, prices fall

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Free-Market Economic Systems

▪ In fully-developed free-market economies:

• No one company can control prices
• Prices include direct and indirect costs (full-cost pricing)
• Consumers have access to the beneficial or harmful information
about environmental and health effects

▪ Most economies are not truly free-market

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Types of Capital and Resources Used To Produce
Goods and Services
▪ Natural capital: resources and ecosystem services
produced by the earth’s natural processes
▪ Human capital: labor, organizational, and management
skills of people
▪ Manufactured capital: machinery, materials, and factories
created to process natural resources

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The Sustainability of Economic Growth

▪ Economic growth: increase in capacity of nation, city, or

company to provide goods and services
• High throughput economy boosts economic growth by increasing
the flow of resources, goods, and services
• This high throughput converts large quantities of high quality
matter/energy into waste, pollutants, and low-quality heat

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High Throughput Economies

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Economies and Sustainability

▪ Neoclassical economies: unlimited growth

• Natural capital is important, but not indispensable – substitutes
can be found

▪ Ecological economies:
• Human economies are subsystems of the biosphere, and
dependent on its resources

▪ Environmental economies
• Favor adjusting economic policy and tools to be environmentally
beneficial

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Ecological Economies

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17.2 How Can We Use Economic Tools To Deal
with Environmental Problems?
▪ By including full-cost pricing of goods and services in
market prices, subsidizing sustainable production, and
taxing pollution/waste resources

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Applying the Principle of Full-Cost Pricing

▪ Direct or market pricing usually ignores the hidden cost of

harm to the environment and human health
• Full-cost pricing reduces resource waste/ pollution/environmental
degradation, improves human health, and supports principles of
sustainability – informed spending decisions
• Not used widely as producers of harmful goods and services
oppose it – difficult to determine these indirect costs

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Shifting from Environmentally Harmful to
Environmentally Beneficial Subsidies
▪ Subsidies can be used to encourage companies to move
toward environmental sustainability
• Some subsidies and tax breaks that encourage degrading of the
environment should be eliminated

▪ Political interests stand in the way of these changes –

often, harmful subsidies stand in the way of beneficial
ones

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Historic Economic Indicators

▪ Gross domestic product (GDP) – annual value of all

goods and services produced or operating within a
country
• Economic growth is the percentage of change per year in the
GDP
• A country’s economic growth per person – GDP / country’s total
midyear population

▪ These indicators are used for measuring and comparing

national economic outputs

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Newly Proposed Environmental Economic
Indicators
▪ Genuine progress indicator (GPI)
• GDP + the estimated value of beneficial transactions – harmful
costs of all transactions

▪ The United Nations has developed a set of environmental

indicators measuring CO2 emissions, forest cover, and
water supplies

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Monitoring Environmental Progress

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Taxing Pollution and Wastes Instead of Wages and
Profits
▪ Green taxes can be applied to those who produce large
amounts of pollution and hazardous waste
• Increases applied over time – 10-20 years
• Reduces other taxes to equal increase in green taxes, resulting in
no net tax increase
• Provides a safety net for lower-income populations

▪ Many countries already have such taxes

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21
Environmental Laws and Regulations Can
Discourage or Encourage Innovation
▪ Environmental regulation: government intervention to
reduce environmental degradation
• Command-and-control approach: regulations that focus on
cleanup rather than prevention
• Incentive-based environmental regulations: incentives for
companies to innovatively reduce pollution and waste – motivates
companies to develop green products and industrial processes
that create jobs

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How Incentive Based Environmental Regulations
Can Work
▪ Cap-and-trade approach
• Government gives/sells companies tradable pollution or resource-
use permits (unused credits can be saved for future expansion)
• Reduces pollution and resource waste by selling services instead
of things
• Reduces the harmful health effects of pollution by reducing
poverty

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Shifting To More Environmentally Sustainable
Economies
▪ Migration away from high throughput (high-waste)
economies and towards low-throughput (low-waste)
economies
▪ Reuse, recycle, and compost solid waste
▪ Improving environmental sustainability
• Fosters the development of major growth industries
• Increases profits and creates green jobs

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Details of Environmentally Sustainable Economic
Development

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17.3 How Can We Implement Sustainable and Just
Environmental Policies?
▪ People must be involved in the political processes that
affect how sustainable environmental policies are made
and enforced.

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Why Developing Environmental Policies Can Be
Difficult
▪ Special-interest groups pressure governments for
subsidies/tax breaks, and the passage of laws/regulations
favorable to their cause
▪ Discord among regulatory agencies and the creation of
policies (often at cross purposes)
▪ Politicians may be more concerned with re-election than
environmental policies

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Environmental Justice, an Important Priority for
Policy Makers
▪ Environmental discrimination
• In the U.S., most polluting factories, hazardous waste dumps,
incinerators, and landfills are located near low-income
communities
• Led to the development of the environmental justice movement
❖ Proponents argue that ethical principles should carry as much weight
as economic factors in deciding where facilities are located

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Certain Principles Can Guide Us in Making
Environmental Policy
▪ Environmental policies should be governed by seven
principles:
• Reversibility
• Net energy principle
• Precautionary principle
• Prevention principle
• Polluter-pays principle
• Environmental justice principle
• Holistic principle

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Working Together Can Make a Difference

▪ Individuals matter – joining together brings about change

(grassroots approach)
• Digital technology, social media, and global action networks can
work to affect change
❖ Inspire change at regional/national/global level

▪ Individual environmental leadership

• Lead by example, work within existing economic and political
systems, run for local office, propose and work for better solutions

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Citizen Environmental Groups Play Important Roles

▪ Thousands of nonprofit, non-governmental organizations

(NGOs) make up the backbone of the environmental
movement
• These politically powerful groups fight attempts to weaken or
repeal laws, and influence Congress in the passage and
strengthening of environmental laws/policies
• Loosely connected network of NGOs is the emerging citizen-
based global sustainability movement

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Historical Timeline of Environmental Law
Enactment

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Students and Educational Institutions Can Play an
Important Role
▪ Students can make environmental audits of their campus
– gathering data/working together to affect environmental
change
• Propose sustainable changes to reduce costs
❖ Buying locally grown food, shifting to renewable energy, and making
universities retrofit buildings to make them more energy efficient
• Pressure universities to stop investing endowment funds in
environmentally harmful companies

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Environmental Security Will Become Increasing
Important
▪ The U.S. currently lacks adequate safety/
inspection/maintenance programs for protecting
hazardous waste producing facilities
▪ Why?
• Not enough citizens/lobbyists have pressured Congress to
designate funds for improving security around these facilities
• This is an ongoing issue

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17.4 What Are Some Major Environmental Worldviews?
▪ Major environmental worldviews differ as to the
importance of human needs and wants versus the overall
health of ecosystems and the biosphere.

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Environmental Worldviews Differ in Important Ways

▪ Not everyone agrees on the seriousness of the issues or

what should be done about them
• The same data can be interpreted to reach different conclusions

▪ Environmental worldviews:
• human-centered (planetary management vs stewardship)
• life-centered
• earth-centered

▪ Environmental ethics play a role in environmental

decision-making

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17.5 How Can We Live More Sustainably?

▪ Everyone needs to become more environmentally literate

– by learning from nature, living more simply and lightly
on the earth, and by becoming active environmental
citizens.

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Learning to Live More Sustainably

▪ Foundations of environmental literacy

• Natural capital matters
• Our ecological footprints are immense and expanding rapidly
• We should not exceed estimated planetary boundaries or
ecological tipping points

▪ The bottom line: minimize the impacts of food production,

transportation, and home energy use/overall resource use

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Living More Lightly On the Earth

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Ethical Guidelines For Developing Environmentally
Sustainable Societies
▪ Consider the effects activities can have on people and
other organisms – mimic nature’s sustaining processes
• Protect natural capital/repair ecological damage caused by
humans
• Use matter/energy resources efficiently
• Celebrate and protect biodiversity
• Leave the earth in better condition for future generations – a
sustainable revolution

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Bringing about a Sustainable Revolution

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Major Shifts Towards Sustainability

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