I AM SOOO COOKED - Environmental Economics

AHHHHHHHHHHHHABRFIAUWHRIAWUHRAIWJRAOWJR

Internal cost

business costs that go directly into the price of producing and buying something

What are internal costs of paying for gas?

for a gallon of gas, you pay to:
extract oil

refine oil

transport gas

+profit for anyone along that chain

+tax to build/repair roads

External cost

costs of a product or activity that are not paid for by the customer

negative externality

hidden negative costs associated with an activity or product

What don’t you pay for when getting gas?

med costs due to air pollution

econ impacts of climate change

crops lost due to drought, sea level rise

How much is climate change costing the world per/yr?

$16M

What are the external costs of climate change?

paying to cover the “full” neg. costs may encourage sustainability (carbon tax would make wind/solar relatively cheaper)

What is always cheaper in the long run with climate change external costs?

Mitigation (may seem expensive at first!)

Payment for ecosystem services (PES):

Put $ value on the ecosystem services and pay to preserve them

PES example?

1990s, NYC was concerned about land use change in Catskill Mountains where most of city’s drinking water comes from

• clean water = low treatment costs in city

• analysis showed it would be cheaper to preserve and protect land than to raise water treatment in facilities

What’s the total value ($) of ecosystem services?

bertween $33-173 trillian per year

Pros of PES?

Standardizes environmental services into 1# ($)

$ talks to all

could fund conservation efforts

could address environmental justice issues

Cons of PES?

How is value decided, and who decides?

EJ issues

spiritual and religious values

some types of ecosystems services may be at odds w/ other conservation goals

In summary?

Although changing systems can seem expensive in the short-term, the true costs of current actions are usually underestimated

Mitigation is almost always cheaper than adaptation, no matter what issue

• Climate change

• Toxic Waste

• Loss of biodiversity

Environmental Policy

official rules and regulations concerning the environment as well as public opinion that helps shape environmental policy

What are basic principles of environmental policy?

• human needs

• ecosystem health

• sustainability

history of US environmental laws and policies

1962 - rachel carson publishes silent spring abt pesticide harm

1969 - national environmental policy act (NEPA)

1970 - clean air act

1972 - clean water act

1973 - endangered species act

1980 - superfund act

What is Amara’s law?

Amara Strande died of a rare cancer after drinking PFAs contaminated water

Near 3M waste disposal site

A law was passed to ban nonessential use of PFAs in Mn by 2032

What are some challenges to implementing policies?

• concern over economic impacts

• opposition to government regulation

• $ + lobbyists hold a lot of influence

• short-term benefits tend to be rewarded over long-term benefits in politics

• who bears responsibility?