ENVIRONMENTAL ECONOMICS

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ENVIRONMENTAL ECONOMICS

• What is it all about?

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INTRODUCTION

• Natural Resources includes all the original
  elements that comprises the Earths natural
  endowments or the life-support systems air,
  water, the Earths crust and radiation from the
  sun.

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• Some representative examples of natural resources
  are
• arable land,
• watersheds and wilderness areas,
• mineral fuels and nonfuel minerals,
• the ability of the natural environment to
  degrade waste and absorb ultraviolet light from
  the sun.

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Natural Resources

• Traditional Classification of Natural Resources
  
• Renewable
• Non-renewable

Biological
Flow
Recyclable
Non-recyclable
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The Nature and Scope of Environmental Economics

• The key issues addressed in this course are
• the causes of environmental degradation
• the need to re-establish the disciplinary ties
  between ecology and economics
• the difficulties associated with assigning
  ownership rights to environmental resources

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• the trade-off between environmental degradation
  and economic goods and services
• the ineffectiveness of the market, if left alone,
  in allocating environmental resources
• assessing the monetary value of environmental
  damages
• public policy instruments that can be used to
  slow, halt and reverse the deterioration of
  environmental resources

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• the macroeconomic effects of environmental
  regulations and other resource conservation
  policies
• the extent to which technology can be used as a
  means of ameliorating environmental degradation
  or resource scarcity
• environmental problems that transcend national
  boundaries, and thus require international
  cooperation for their resolution

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• the limits to economic growth
• the extent to which past experience can be used
  to predict future events that are characterized
  by considerable economic, technological and
  ecological uncertainty
• ethical and moral imperatives for environmental
  resource conservation--concern for the welfare of
  future generations

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• The interrelationships among population, poverty
  and environmental degradation in the developing
  countries of the world
• the necessity and viability of sustainable
  development

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The Unique Features of Environmental Economics

• First, the ultimate limits to environmental
  resource availability are imposed by nature. That
  is, their origin, interactions and reproductive
  capacity are largely governed by nature.
• Second, most of these resources have no readily
  available markets for example, clean air, ozone,
  the genetic pool of a species, etc.

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• Third, no serious environmental economic study
  can be entirely descriptive. Normative issues
  such as intergenerational fairness and
  distribution of resources between the poor and
  the rich nations are very important.

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• Fourth, uncertainties are unavoidable
  considerations in any serious study of
  environmental and natural resource issues. These
  uncertainties may take several forms, such as
  prices, irreversible environmental damage, or
  unexpected and sudden species extinction.

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Human Perspectives of Long Term Global Problems

• Human perspective over space and time
• In general, the larger the space and the longer
  the time associated with a problem, the smaller
  the number of people who are actually concerned
  with its solutions.

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• Possible factors influencing the human
  perspectives are
• Social, cultural and moral values
• Economic conditions
• Belief (faith) in human wisdom and farsightedness
• ignorance