Sustainability, Economics, and Equity

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Chapter 20

• Sustainability, Economics, and Equity

Quote of the chapter Leave the world better
than you found it, take no more than you need,
try not to harm life or the environment, and make
amends if you do. Paul Hawken, author of
Natural Capitalism
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Sustainability, Economics, and Equity

• Ciudad Juarez, Mexico
• 1994 US, Canada, and Mexico passed the North
  American Free Trade Agreement (NAGTA)
• Intended to increase trade by reducing
  tariffs/other taxes and regulations
• Negative consequences
• Industrial pollution
• Poor working conditions
• Discrimination
• Questions of social justice
• Point of story?

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Sustainability

• Sustainability meeting the needs of the present
  generation without compromising the ability of
  future generations to meet their own needs
• Newer concept
• Basic needs include
• Well being status of being healthy, happy and
  prosperous

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Economics

• Economics examines how humans either as
  individuals or as companies allocate scarce
  resources in the production, distribution and
  consumption of goods and services

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Supply, Demand and the Market

• Most economies are market economies
• Market occurs whenever people engage in trade
• Cost of good is determined by supply and demand

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Supply

• Supply curve (s) - shows how many units that
  suppliers of a given product or service are
  willing to supply
• Factors that influence supply

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Demand

• Demand curve (D) - shows how much of a good
  consumers want to buy.
• Factors that determine demand -
• Slopes downwards because as the price of the good
  rises, the demand declines

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The Law of Supply

• Law of supply when the price of a good rises,
  the quantity supplied of that good will rise and
  when the price of a good falls, the quantity of
  the good supplied will also fall

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The Law of Demand

• Law of demand when the price of good rises, the
  quantity demanded falls and when the price falls,
  demand rises

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Equilibrium

• When the price of a good comes to an equilibrium
  point and the two curves (S and D) intersect on
  the graph
• At this price, suppliers find it worthwhile to
  supply exactly as many of the product as
  consumers are willing to buy.

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Externalities

• Externalities - costs/impact of a good or service
  on people and the environment not included in the
  economic price of that good or service
• Ex. costs of using common resources such

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Supply and Demand with Externalities
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Wealth and Productivity

• GDP (gross domestic product) - the value of all
  products and services produced in a year in a
  given country
• Includes 4 types of spending
• Does not reflect externalities such as pollution
  
• GPI (genuine progress indicator) - attempts to
  address this shortcoming

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GPI vs. GDP in US from 1950-2004
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Kuznets Curve
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Microlending

• Practice of loaning small amounts of money to
  people who intend to start a small business in
  less developed countries

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Terminology

• Natural capital resources of the planet
• Human capital
• Manufactured capital all goods and services
  that humans produce
• Market failure
• Environmental economics examines the costs and
  benefits of various policies and regulations that
  seek to regulate or limit air and water pollution
  and other causes of environmental degradation
• Ecological economics
• Valuation assigning monetary value to
  intangible benefits and natural capital

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Systems DiagramsTwo Economic Systems
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Cradle to Cradle System
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Environmental Worldviews

• Important to policies a nation considers and how
  it implements them
• Anthropocentric - human-centered
• Stewardship
• Biocentric - life-centered
• Variety of positions
• Ecocentric - Earth-centered
• Various forms

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World Agencies

• United Nations (UN)
• United Nations Environment Program (UNEP)
• The World Bank
• The World Health Organization (WHO)
• The United Nations Development Program (UNDP)

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United States Agencies

• The Environmental Protection Agency (EPA)
• The Occupational Safety and Health Administration
  (OSHA)
• The Department of Energy (DOE)

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Several Approaches to Measuring and Achieving
Sustainability

• Human development index (HDI) combines 3 basic
  measures of human status
• life expectancy
• knowledge and education
• individual purchasing power
• Human poverty index (HPI) measures 3 things

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US Policies Overview
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Deterrents and Incentives

• Strategies used by US to protect environment,
  promote human safety/welfare and (in some cases)
  internalize externalities
• Command and control
• Incentive based approach
• Green tax

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Triple Bottom Line
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Two Major Challenges of our Time

• Reducing poverty
• Stewarding the environment (environmental justice)

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Millennium Development Goals(Poverty and
Inequity)

• Eradicate extreme poverty and hunger
• Achieve universal primary education
• Promote gender equality and empower women
• Reduce child mortality
• Improve maternal health
• Combat HIV/AIDS, malaria, and other diseases
• Ensure environmental sustainability
• Develop a global partnership for development
• 2013 report http//www.un.org/millenniumgoals/pdf
  /report-2013/mdg-report-2013-english.pdf

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Environmental Justice

• Inequitable distribution of pollution and of
  environmental degradation with their adverse
  effects on humans and ecosystems
• People that are of lower incomes and minorities
  that have a disproportionate exposure to
  environmental hazards
• Can they not afford to get away? Or
• Do industries move here because no one will
  complain?

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Story of Change

• https//www.youtube.com/watch?voIQdYXCKUv0