Topic 3 - Environmental Sustainability Flashcards
What is ecologically sustainable development?
It is development that meets the needs of present generations while not compromising the ability of future generations to also meet their needs
It involves the preserving and enhancing of the community’s resources so that ecological processes and QOL are maintained.
It is a level of eco activity that is compatible with the LT preservation of the environment, rather than the maximum growth in the ST
What is the long term purpose of achiving both EG and environmental protection?
It is to improve people’s QOL
Why do depleted natural environments have negative effects?
Depleted natural environment has both harmful effects on the health of humans and diminishes their quality of life and reduces the potential future growth of the economy by limiting its natural resources
What are the 5 key principles of ecologically sustainable development?
Integrating economic and environmental goals in policies and activities
Ensuring that environmental assets are appropriately valued
Managing environmental risks with caution
Ensuring fairness in the allocating of costs and assets within and between generations
Taking into account the global effects of environmental issues
What is intergenerational equity?
Intergenerational equity describes the concept that resources should not be used in a way that will limit the quality of life of future generations
What has been created to ensure ecologically sustainable development? What are the core objectives?
The Aus national Strategy for Ecologically Sustainable Development (NSESD) was first developed in 1992 to address this issue
Core objectives include:
To enhance individual and community wellbeing and welfare by following a path of economic development that safeguards the welfare of future generations
To provide for equity within and between generations
To protect biological diversity and maintain essential ecological processes and life support systems
What are the impacts of overuse or exploitation of natural resources to achieve ST growth?
It can deplete natural resources and permanently damage the environment, reducing the productivity of affect sectors, it will also result in a fall in future potential output in the LT, especially in primary industries that rely on natural resources as inputs in the production process
WHat is the price mechanism?
The interaction of the market forces of supply and demand to reach an equilibrium price and quantity of production
Is the price mechanism a key determinant in decisions about what g+s should be provided?
Yes
WHat are the downsides of using price mechanism?
It does not effectively take into account the LT effect of eco activity on the environment. E.g. Forests may be logged until there are none left. Thus, market price paid by consumers does not reflect social costs.
How does the price mechanism work?
WHen consumers demand goods, producers will make them available, so long as they can receive a price that at least covers their prices
What is market failure?
It is when the price mechanism takes into account private benefits and costs of production, but not wider social costs and benefits borne by all of society such as increased pollution contributing to an increase in CVD for individuals
What are the other costs and benefits that are passed on to other members of society known as?
Externalities - a consequence of an industrial or commercial activity which affects other parties without this being reflected in market prices
WHat is a negative externality?
Negative externalities refer to an unintended negative outcome of an economic activity whose cost is not reflected in the operation of the price mechanism. Generally, refers to the adverse spillover effects on the environment from eco activity.
What are demerit goods?
G+s that have negative externalities are known as demerit goods
What are positive externalities?
Positive externalities are unintended positive outcomes of an economic activity whose value is not reflected in the operation of the price mechanism. They are the beneficial spillover effects for society. For example, increased use of train services may reduce commuting times for passengers but also reduce road congestion and car pollution
What are merit goods?
g+s which have positive externalities
WHat is the tragedy of the commons?
The tragedy of the commons refers to a situation in which individuals with access to a public resource (also called a common) act in their own interest and, in doing so, ultimately deplete the resource.
Does the price mechanism help protect the environment?
It plays a limited role in protecting the environment but kind of does
How does the price mechanism protect the environment?
It limits the sales of depleted resources that do have a price.
When environmental resources become scarce, the cost of natural resources increase, reducing the number of resources consumed. Therefore, if a large number of trees are cut down to be sold on the market, eventually it will become more expensive to supply them. The remaining supply will be limited, and the prices will this increase due to a lack of supply
However, this approach can only protect those resources that are sold in markets, such as minerals and timber. The price mechanism plays no part in allocating environmental resources that can be used for free such as the use of the atmosphere to dispose of gases generated during the production process.
What are non-excludable goods?
Goods which are once provided, the producer cannot exclude consumers from enjoying the benefit of the good even if they aren’t prepared to pay - i.e. defence, streetlights, clean environment etc.
What are excludable goods?
Goods which can exclude consumers from enjoying the benefit of the good if they arent prepared to pay
What are non-rival goods?
Consumption of the goods by one individual consumer does not reduce the quantity of the good available for other consumers
In other words, it is a good that can be consumed or possessed by multiple users - i.e. a park
What are rival goods?
Consumption / possession of the goods by a single user
What are public sector goods?
Public sector goods are goods and services provided by the gov such as train services and hospitals. However, not all public sector goods are public goods. Train services, for example, are provided by the gov but aren’t public goods as they are excludable, since train guards can prevent you from riding for free. This is also similar vice versa
What is a public good classified as?
Non excludable and non rival:
It is essentially a a commodity or service that is provided without profit to all members of a society, either by the government or by a private individual or organization.
What is a private good classified as?
Excludable and rival:
A private good is thus any item that can only be used or consumed by one party at a time.
What are the 3 environmental issues?
Preservation of natural environments, pollution, climate change and depletion of renewable and non-renewable resources
Why is preserving the natural environment an important environmental issue (in terms of the economy)
Economy cannot keep growing in LT if environment is degraded, due to restricting availability of resources
Environmental damage affects human health through higher levels of air and water pollution, and restricts the availability of resources –> worsening human capital and thus eco activity
What are some measures to help preserve the natural environment?
Restrictions on development in environmentally sensitive areas, such as mining in national parks
Protecting native plant and animal species from extinction
Controls over emissions of waste products
Requiring new plantation in areas where logging has occurred
Why is pollution an important environmental issue (in terms of the economy)
Pollution occurs where the natural environment is degraded in some way, such as by harmful chemical substances, noise and untreated rubbish
All sectors of the economy including manufacturing, agriculture and households contribute to the pollution of our environment
The impact of pollution is often felt far away from its original source and can be a problem for the global economy
Pollution can harm agricultural productivity –> decreased crop yield and quality. It can also increase work absences from increased sickness due to high levels of pollution
How are governments attempting to reduce pollution?
Banning environmentally damaging production techniques
Quotas to restrict the emissions of harmful pollutants
Subsidies encouraging environmental practices, taxes to discourage some forms of eco activity
What is climate change?
Climate change (global warming) is the impacts on the natural environment such as rising temp and sea levels caused by emissions of greenhouse gases such as carbon dioxide, nitrous oxide and methane
What is climate change caused by?
Burning of fossil fuels
Changes in Land use
Also, high levels of EG will generally lead to higher carbon emissions
What are the detrimental impacts of climate change on the economy?
Weather conditions becoming more extreme –> worsening agriculture
More land species become critically endangered
Malnutrition and nutrient deficiency
Reduction in Aus GDP, consumption and real wages
Permanent damage to sensitive regions in Aus such as the bleaching of the coral in the great barrier reef
What are renewable resources?
Renewable resources: Renewable resources can naturally regenerate or replace themselves in a relatively short period of time. However, these resources may be depleted to the point where they become non-renewable
E.g. overfishing of a species of fish may cause the numbers to fall to a level at which the species cannot reproduce and may become extinct
What are non-renewable resources?
Non-renewable resources: Non-renewable resources are those natural resources that are in limited supply because they can only be replenished over a long period of time or cannot be replenished at all.
E.g. Fossil fuels such as petroleum and coal
What is the main issue with a depletion of resources for the economy?
It affects future generations (thus promoting intergenerational inequity), which reduces the ability to reach an ecologically sustainable development
Also, as resources become scarce, there is an increase in costs –> increased costs of living
How can the optimal rate of consumption for renewable resources be obtained?
Renewable resources: optimal rate of use means arriving at a threshold exploitation level that allows resources to regenerate to avoid long-term decline in these resources
Involves avoiding overfishing, overgrazing, excessive farming of agricultural land, over- exploitation of timber
How can the optimal rate of consumption for non-renewable resources be obtained?
optimal rate involves determining rate of use acceptable for both present generation and future generations
