Nature's Role in Sustaining Econ Development

Question 1

Author of the paper?

Answer 1

Dasgupta (2010).

Question 2

Natural capital

Answer 2

Ocean fisheries, tropical forests, the atmosphere etc.

Question 3

Ways of overcoming diminutions in natural capital

Answer 3

Science and technological advances, accumulation of reproducible capital, growth in human capital, improvements in the economy’s institutions.

Question 4

Do macroeconomic forecasts include natural capital?

Answer 4

Very rarely. If they do include it, it is only an afterthought.

Question 5

Depreciation

Answer 5

GDP does not deduct depreciation of capital that accompanies production, especially natural capital.

Question 6

INDONESIA and MALAYSIA

Answer 6

Net domestic savings rates are 20-30% lower than recorded savings rates when depreciation is included.

Question 7

Why may markets not function well / do not exist?

Answer 7

Economic interactions take place over large distances, making cost of negotiation too high.
Interactions separated by large temporal distances (e.g. the effect of carbon emissions on climate in the distant future).
Failure to secure property rights.

Question 8

Property rights

Answer 8

Ill-specified / unprotected property rights prevent markets from forming or make them function poorly. Without property rights, resources are underpriced and are therefore overexploited.

Question 9

Ways of eliminating nature’s subsidies?

Answer 9

Tax - efficient rate would be the damage suffered by others.
Introduce private property rights - but who should get these rights…?
Payments for Ecosystem Services (PES).

Question 10

Payments for Ecosystem Services (PES)

Answer 10

E.g: if lawmakers in Brazil believe that destroying the Amazon forests is the auth to economic progress there, then surely the rest of the world should pay Brazil not to destroy them?

Question 11

Sustainable development

Answer 11

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Question 12

Society’s productive base

Answer 12

Stock of all its capital assets, including its institutions. It declines if the decumulation of assets is not compensated by the accumulation of others.
An economy’s wealth measures its overall productive base.

Question 13

How to judge whether an economy has experienced sustainable development?

Answer 13

Has wealth increased relative to population growth?

Question 14

PAKISTAN

Answer 14

Wealth and GDP per capita increased during the period studied but, due to population growth, PAKISTAN’S wealth per capita declined at an annual rate of 1.4%. So, in the year 2000, the average Pakistani was A LOT poorer than in 1970.
PAKISTAN enjoyed growth in GDP per capita by running down its natural capital assets.