7 - The Environment And Development Flashcards
Describe how the poor are victims of environmental degradation
Victims:
- The poor live in environmentally degraded lands which are less expensive as the rich avoid them
- People In poverty have less political clout to reduce pollution where they live
- Living In less productive polluted lands gives the poor less opportunity to work their way out of poverty
Describe how the poor are agents of environmental degradation
Agents:
- The high fertility rate of people living in poverty
- Short time horizon of the poor (by necessity)
- Land tenure insecurity
- Incentives for rainforest resettlement
What’s sustainable development
Meeting the needs of present generation without compromising the wellbeing of future generations
Sustainable development can be studied using concepts of economic analysis (3 tools)
First: Using an appropriate valuation of future social benefits - Usually involving valuing the future at a significantly higher rate than does the market
Second: Paying proper attention to market failures (focusing on externalities and public goods)
Third: Explicitly valuing natural resources as a form of capital stock rather than just a stream of consumption
Why do we need environmental accounting
- Because running down the capital stock is not consistent with the idea of sustainability
- Environmental and other forms of capital are substitutes only to a degree; eventually they likely act as complements
- In developing countries, environmental capital is generally a larger fraction of total capital
- Therefore, to know whether environmental capital is increasing or decreasing, we need environmental accounting
Equation for sustainable net national income
NNI* = GNI - Dm - Dn
NNI* = Sustainable national income
GNI = Gross national income
Dm = Depreciation of manufactured capital assets
Dn = Depreciation of environmental capital (water assets, CO2 absorption, biodiversity)
Expanded version = GNI - Dm - Dn - R - A
R = Expenditure needed to restore environmental capital
A = Expenditure required to avert destruction of environmental capital
Income-pollution relationship: Explain Kuznets curve
- Y axis = Environmental degradation
- X axis = Per capital income
- Inverted U
- As per capital income increases, environmental degradation increases, until a point then as per capital income continues to increase, environmental degradation starts decreasing
Natural resource based livelihoods: Pathway out of poverty?
- Low-Income countries, high dependence on natural resources: Animal husbandry, agriculture, fishing, forestry, hunting
- But access to benefits of resources often very inequitable
- Many Poor Lack farmland, forests, cattle, equipment
Global warming and climate change: Scope, mitigation, and adaptation
- Impact of global warming likely to hit hardest on the poorest
- Increasing concern of destruction of worlds remaining forests, are concentrated in developing nations, like Africa, Brazil, Peru etc, which will greatly increase global warming through the greenhouse effect
- However, Most greenhouse gases are emitted by developed countries, creating environmental dependence: Developing nations are reliant on developed countries to take immediate steps to reduce emissions, as well as to develop new technologies that’ll enable further reductions
Strategies for mitigation of global warming
- Taxes on carbons
- Caps on greenhouse gases (generally with “carbon markets”)
- Subsidies to encourage technological progress
Difference between planned and autonomous adaptation
Planned adaptation = Is policy driven, undertaken by governments
Autonomous adaptation = Undertaken by individuals, families, communities. E.g. Altering crop or livestock varieties, changing livelihoods, migrating
- Almost certainly, autonomous adaptation will be the predominant form of adaptation
Economic models of environment issues
- Privately owned resources
- Inefficiencies are likely to result from imperfections in property rights
- “Perfect” (complete) property rights are characterised by:
1) Universality = All resources are privately owned
2) Exclusivity or “Excludability” = It must be possible to prevent others from benefiting from a privately owned resource
3) Transferability = The owner of a resource may sell the resource when desired
4) Enforceability = The intended market distribution of the benefits from resources must be enforceable
Why may inefficiencies arise from environmental degradation
- Inefficiencies May arise because a resource is not privately owned
- Too much labour used on common property compared to other activities - The so-called “tragedy of commons”
- Possibly Too little investment in the common resource, because others have access to some of the returns
Whens total net benefit maximised (graph in textbook)
When marginal cost of producing or extracting one more unit of the resource is equal to its marginal benefit to the consumer
What’s the tragedy of the commons
Multiple individuals, acting in their self-interest, deplete a shared finite resource, leading to the detriment of the entire group
- Common pool resource = Fisheries, forests, grazing lands
- Individuals maximise their own benefits without considering long-term sustainability of the resource
- No one owns the resource, so no incentive to conserve or protect it
- Overuse of resources generates negative externalities, impacting other users
- Tragedy of the commons leads to inefficiency in resource allocation and can ultimately result in depletion of the resource, causing ecological imbalances and economic losses for the community
