3. Economic issues - environmental sustainability

Question 1

v Global environmental problems include:

Answer 1

Climate change
Loss of biodiversity
Illegal logging
Coral bleaching
Depletion of the ozone layer
Pollution of the atmosphere

Question 2

Why is important to consider this issue

Answer 2

The natural environment is a source of natural resources and a destination for waste disposal

This becomes a management issue for governments to ensure quality of life is not reduced, resources are not over-exploited and excessive pollution doesn’t occur as a result of economic growth.

Question 3

Environmental quality clashes with…

Answer 3

economic growth and inflation

Question 4

Ecologically sustainable development (ESD)
description

Answer 4

“ development that meets the needs of the present without compromising the ability of future generations to meet their own needs “

or

The pursuit of economic growth should not threaten the environment for current and future populations.

Question 5

Economic role of the environment

Answer 5

A source of raw materials including air, water, soil, forests, minerals, fish, etc.

A receptacle (a “container”) for biodegradable and non-biodegradable waste. Some of this waste causes pollution, such as plastics, radiation…

Provides natural amenities that can be used for tourism, sport and travel.

Question 6

Private costs of environmental sustainability

Answer 6

spending by producers on resources to produce output AND costs incurred by consumers when buying goods and services.

Question 7

Private benefits of environmental sustainability

Answer 7

profits made by producers and satisfaction (utility) gained by consumers.

Question 8

Social costs of environmental sustainability

Answer 8

the costs suffered by society as a whole, as the result of private actions. E.g pollution from a factory

Question 9

Social benefits of environmental sustainability

Answer 9

positive spillover effects of private production

Question 10

Market failure and externalities in relation to the environment

Answer 10

The price mechanism only takes into account the private costs and benefits falling on consumers. The social costs/benefits are not accounted for.

Market failure in relation to the environment is the negative externality of pollution.

Question 11

how does Market failure occur

Answer 11

Market failure for the environment may occur if a poorly designed (or non-existent) system of property rights exists.

Question 12

Property rights enable a market exchange to occur in three ways
what are the 3 ways?

Answer 12

Excludability ; Transferability ; Enforceability

Question 13

What is excludability market exchange

Answer 13

whoever is granted the property rights, may exclude others from using the property. This excludes ‘free riders’.

Question 14

What is transferability

Answer 14

the property rights can be bought and sold. This gives the owner the incentive to maintain the property.

Question 15

What is enforceability

Answer 15

the property rights are legally binding (i.e. supported by law). Any property disputes can be settled in court.

Question 16

What are common areas

Answer 16

Common areas such as beaches and parklands are not bound by property rights.

This means that the public has unrestricted access to them and could lead to exploitation, pollution, congestion and degradation.

Problem of the Commons

Question 17

3 examples of environmental issues

Answer 17

The control of pollution ; Climate change ; Depletion of Renewable and Non-Renewable Resources

Question 18

Which natural environments impacted by economic activity

Answer 18

Many natural environments are impacted by economic activity including mining, forestry, agriculture, manufacturing and urban development.

Question 19

Examples of environments that need protection

Answer 19

Australia has many environments that require protection such as the Great Barrier Reef, the Daintree Rainforest and Uluru. These have World Heritage listing by the UN.

Question 20

Why did conservationists argue for environment protection.

Answer 20

Conservationists have argued for their protection to achieve environmental sustainability and intergenerational equity.

Question 21

How does land and soil degradation occur

Answer 21

this occurs particularly in rural areas and may include overuse of water irrigation leading to soil erosion, acidity, salinity and “fish kills”.

Question 22

How does land transformation occur

Answer 22

This can occur coastally or inland. Most profound in the overdevelopment close to the coast, which is threatened by storm activity, climate change and erosion.

Question 23

How does overexploitation of resources occur (and how it affects environmental quality)

Answer 23

This includes logging and mining in national parks. This leads to a decline in environmental quality and depletion of some resources.

Question 24

How does pollution of the environment occur

Answer 24

Especially occurs in major cities (esp. Sydney and Melbourne). Large populations lead to declining water and air quality. Mines also contaminate underground water supplies.

Question 25

Environmental issue evidence

Answer 25

Pollution: Carbon tax

Climate change: Advanced economies account for 50% of global greenhouse gas emissions

Depletion of resources: coal, oil, iron etc. are those that have a FINITE SUPPLY.

Question 26

Policies to target environmental sustainability

Answer 26

1 – Regulatory and control regimes

2 – Market-based economic instruments

Question 27

What are regulatory and control regimes

Answer 27

includes such things as clean air/water legislation, land zoning, pollution laws, maintaining national parks etc.

Question 28

examples of market-based economic instruments

Answer 28

includes pollution taxes, pollution trading permits, fishing quotas, recycling incentives, promotion of eco-tourism, tax incentives for green technology.