Environmental Economic Justice Policy

Environmental Economics

Environmental Economics

Subfield of economics concerned with the environment

The environment, ecosystem services, & natural resources have economic value

Money & economic principles are the basis of most policy decisions

Environmental Economics

Economic value based on: market value, value provided by unharvested resources, future value of resources

Market Value

What people are willing to pay for the resources, harvest and direct use value

Value provided by unharvested resources

Tourism Value

Ecosystem service value

Indirect use value

Cost to protect or replace a species, service, or resource

Cost to fix a problem

Future value of resources

Option value

Definition of Externalities

Hidden costs and benefits that affect parties who didn’t agree to incur the costs or benefits

Externalities continued

Market failure: few benefit at the expense of society

Tragedy of the Commons: Loss of open-access resources

Government Subsidies

Taxpayers moeny provided to industries by the government are not considered in valuation

Common resources definition

Ownership of common resources (wild animals, air, water)

Common resources continued

Common resources are not owned by an individual or specific group, they are exclusive to everyone

Common resources are not excludable: available to all

Common resources are rival goods: one person’s use limits use of availability to other people

Market Failure

When goods are available free of charge, the market forces that normally allocate resources in a free market economy are absent

Market Failure Continued

When a good does not have a price attached to it, a free market economy cannot ensure that the good is produced and consumed in the proper amounts (Common resources tend to be overused which can lead to their loss)

In such cases, government policy can potentially remedy the market failure that results, and raise economic well-being (Policy that enforces optimal use allows common resources to be renewed)

Ecosystem services

Often ignored in economic valuations

Example of market failure & establishment of policy

Cuyahoga River, OH:

Polluted by: (Industrial waste • Sewage • Garbage)

Caught on fire 13 times: (1952 fire caused $1.3 million in damages)

1969 fire inspired creation of the National Environmental Protection Act (NEPA), Environmental Protection Agency (EPA), & Clean Water Act

Tragedy of the commons & extinctions case study

Exploitation (overhunting)

Habitat loss, fragmentation, & degradation

Why is overhunting the major threat?

Economic changes in Congo contributed to the problem: (Opening of forests to mining & logging)(Construction of roads that connect once impenetrable places to towns allowed easy access for poachers)(3 weeks after opening up a Congo forest, animal density fell by 25%)

Why is overhunting the major threat?

Globalization & increased access to international markets lead to the sale of meat, skin, & other animal parts worldwide Increased demand for bushmeat as people move to urban centers & increase their income (In 2010, it was estimated that 5000 kg (11000 lbs) of bushmeat enters Europe every week)

Environmental Policy

Established principles for guiding decisions to maintain the environment, ecosystem services, & natural resources

Addresses potential and realized human impacts on the environment

Precautionary Principle

When an activity raises threats of harm to human health or the environment, precautionary measures should be taken even if some cause and effect relationships are not fully established scientifically

Input pollution control

Pollution prevention: reduces or eliminates production of pollutants

Reduce use of pollution-causing substance

Use technology to reduce pollution during use of pollution-causing substance

Output pollution control (pollution cleanup)

Cleaning or dilution of pollution after it happens

Often not possible

When it is possible, it is generally extremely expensive

Clean Air Act

The clean air act and other U.S. environmental policy was effective

Intrinsic value

Every species has a right to exist

The environment is important outside of its value to people

People should be stewards of the Earth

Religious and spiritual beliefs and values

People have a responsibility to each other

Environmental justice

Protect future generations

All species are interdependent

Protect functionality to protect ourselves

Protect our life support systems & economy

Aesthetic & inspirational value

Nature is beautiful & inspires art, philosophy, & religion

Environmental Justice definition

The fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income, with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies

Environmental Justice continued

All people are represented in decision making & have access to reliable, high quality resources such as clean air and water

Eliminate negative externalities • Avoid market failure & the tragedy of the commons