Food and the Environment
Food requires natural resources as crucial inputs
Cost minimization means these are often not sustainably used
Nitrogen on soil that runs off into water
use of irrigation in US south west drains aquifers
Creates commodity crisis or at least dramatically increases costs of production and environmental damage
Price of oil is set to double due to climate change
Terrible weather conditions in olive oil production industries
Environmental Crisis: How it impacts the cost of Production
James O’Conner: Second Contradiction of Capitalism
When an individual capitalist cut costs, it increases the average costs for all capitalists, makes things more expensive
Impact of the economy on the environment
Negative Value: Increased costs (barriers to capital accumulation) from the depletion or pollution of environmental inputs
Designed by Arthur Cecil Pigou
Externality: When a good or service has costs or benefits to others beyond those producing or consuming the good or service
Positive Externality: Benefits more than the producer and consumer (ex. Vaccine, even those who didn’t get the vaccine benefit from it)
Negative Externality: Negatively creates costs that impacts more than the producer and consumer (ex. production of shrimp)
Costs or benefits to user are not equal to the costs or benefits to society
Total Cost = Social Cost + Private Cost
For products with negative externalities
Cost on society is different, therefore the total cost has to include the private cost and social cost
The price will be too low so too much of the product will be produced and consumed
Solution: To make producers and consumers incorporate social cost into price
The government should levy a tax that adds to the total amount of the Social Cost
Therefore private companies wouldn’t make more money
An example of this would be Taxation (Environmental tax)
Private firms will attempt to avoid paying for social costs
What environmental problems are created by shrimp farming?
Pollution problem created by the farming of shrimp
Chemical and antibiotics pollute the surrounding mangrove forests
Owner of shrimp farm isn’t negatively impacted—some other group will be
Why are Mangroves good?
Mangrove: Saltwater tree that grows close to shores, stabilizes the shoreline, wildlife habitat
Shoreline protection, trap sediment that runs into water, nurseries for small fish, provide nutrient for soil through litter fall
Carbon sequestration
1 kilo of farmed shrimp has 4x the CO2 emissions of beef
What kind of solution does this video advocate?
“Sustainability certification has proved to be a logical way to establish best practice”
To check labels and vote with their wallets
Any problems with this solution?
Only 10% of shrimp are certified
race to the bottom of standards
always on the consumer, caring people pay, selfish people do not
Food requires natural resources as crucial inputs
Cost minimization means these are often not sustainably used
Nitrogen on soil that runs off into water
use of irrigation in US south west drains aquifers
Creates commodity crisis or at least dramatically increases costs of production and environmental damage
Price of oil is set to double due to climate change
Terrible weather conditions in olive oil production industries
Environmental Crisis: How it impacts the cost of Production
James O’Conner: Second Contradiction of Capitalism
When an individual capitalist cut costs, it increases the average costs for all capitalists, makes things more expensive
Impact of the economy on the environment
Negative Value: Increased costs (barriers to capital accumulation) from the depletion or pollution of environmental inputs
Designed by Arthur Cecil Pigou
Externality: When a good or service has costs or benefits to others beyond those producing or consuming the good or service
Positive Externality: Benefits more than the producer and consumer (ex. Vaccine, even those who didn’t get the vaccine benefit from it)
Negative Externality: Negatively creates costs that impacts more than the producer and consumer (ex. production of shrimp)
Costs or benefits to user are not equal to the costs or benefits to society
Total Cost = Social Cost + Private Cost
For products with negative externalities
Cost on society is different, therefore the total cost has to include the private cost and social cost
The price will be too low so too much of the product will be produced and consumed
Solution: To make producers and consumers incorporate social cost into price
The government should levy a tax that adds to the total amount of the Social Cost
Therefore private companies wouldn’t make more money
An example of this would be Taxation (Environmental tax)
Private firms will attempt to avoid paying for social costs
What environmental problems are created by shrimp farming?
Pollution problem created by the farming of shrimp
Chemical and antibiotics pollute the surrounding mangrove forests
Owner of shrimp farm isn’t negatively impacted—some other group will be
Why are Mangroves good?
Mangrove: Saltwater tree that grows close to shores, stabilizes the shoreline, wildlife habitat
Shoreline protection, trap sediment that runs into water, nurseries for small fish, provide nutrient for soil through litter fall
Carbon sequestration
1 kilo of farmed shrimp has 4x the CO2 emissions of beef
What kind of solution does this video advocate?
“Sustainability certification has proved to be a logical way to establish best practice”
To check labels and vote with their wallets
Any problems with this solution?
Only 10% of shrimp are certified
race to the bottom of standards
always on the consumer, caring people pay, selfish people do not
