Chapter 20 Sustainability, Economics, and Equity

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Chapter 20Sustainability, Economics, and Equity
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Sustainability is the ultimate goal of sound
environmental science and policy.
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Sustainability
Something is sustainable when it meets the
needs of the present generation without
compromising the ability of future generations to
meet their own needs.
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Sustainability
Sustainability weighs present resources and
needs in terms of long-term and future resources
and needs.
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Economics studies how scarce resources are
allocated.
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Supply, Demand, and the Market

• A market occurs whenever people engage in trade.
• In a market economy, the cost of a good is
  determined by supply and demand.

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Supply (S) and Demand (D)
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Supply

• The supply curve (S) shows how many units of a
  given product or service a supplier can make
  available.
• If you are the only supplier of this product, and
  many people want it (a condition of scarcity),
  you are likely to be willing to produce many
  units of the product.

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Supply

• However, if there is competition for your
  product, you may be concerned how many units you
  can sell.
• You will likely produce fewer units now that you
  share the market with other suppliers.

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Demand

• The demand curve (D) shows how many units of a
  good consumers want to buy.
• Factors that determine demand include
• Income of the buyers
• Price of the good
• Tastes, expectations, and the number of people
  who want the good

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Demand
The demand curve slopes downward because as
the price of the good rises, the demand
declines if P then D
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The Law of Demand
When the price of a good rises, the quantity
demanded falls. When the price falls, demand
will rise. (Price and demand are inversely
related.)
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The Law of Supply
When the price of a good rises, the quantity
supplied of that good will rise. When the price
of a good falls, the quantity of the good
supplied will also fall. (Price and supply are
directly related.)
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Equilibrium
When the price of a good comes to an
equilibrium point (E), the two curves (S and D)
intersect on the graph.
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Equilibrium
At this price (equilibrium), suppliers find it
worthwhile to supply exactly as many of the
product units as consumers are willing to buy.
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Externalities

• The costs or impact of a good or service on
  people and the environment not included in the
  economic price of that good or service
• E.g., costs of using common resources such as
  water, air, land, or the oceans, and the costs of
  air and water pollution or solid waste products.

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Externalities

• With the costs of externalities included, the
  true cost of a good or service is realized
• The equilibrium point (E) moves upward
• and to the left (E1),
• reflecting the increase in the cost of each unit
  and the corresponding decrease in demand.

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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.
• GDP does not reflect externalities such as
  pollution.

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Wealth and Productivity
GPI (Genuine Progress Indicator) attempts to
address the shortcomings of the GDP by including
externalities.
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Wealth and Productivity

• Unlike GDP, GPI includes
• Measures of personal consumption
• Income distribution
• Levels of higher education
• Resource depletion, pollution, and the health of
  the population.

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The Kuznets Curve

• The controversial Kuznets curve suggests that as
  per capita income in a country continues to
  increase over time,
• Environmental degradation first increases,
• then decreases.

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Environmental Economics The Kuznets Curve
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Economic health depends on the availability of
natural capital and basic human welfare.
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Microlending
The practice of loaning small amounts of
money to people who intend to start a small
business in less- developed countries.
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Contrasting Economic Systems

• Economic systems can be more or less sustainable,
  depending on how factors such as the waste stream
  are managed.

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Sustainable Economic Systems

• One promising approach is to use a
  cradle-to-grave system for material use and waste
  recycling.

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Agencies, laws, and regulations are designed to
protect our natural and human capital.
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Environmental Worldviews

• Anthropocentric human-centered, considers that
  human beings have intrinsic value and nature
  should provide for our needs.
• Biocentric life-centered, says humans are just
  one of many species on Earth, all of which have
  equal value.

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Environmental Worldviews

• Ecocentric Earth-centered, places equal value on
  all living organisms and the ecosystems in which
  they live, and it demands that we consider nature
  free of any associations with our own existence.

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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

• Many Federal agencies are responsible for
  enforcing environmental laws and regulations.
  These include
• The Environmental Protection Agency (EPA)
• The Occupational Safety and Health Administration
  (OSHA)
• The Department of Energy (DOE)

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There are several approaches to measuring and
achieving sustainability.
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The Triple Bottom Line

• Sustainability is believed to be achievable at
  the intersection of three circles of mutual
  concern for all humans
• Social
• Economic
• Environmental

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Two major challenges of our time are reducing
poverty and stewarding the environment.
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Millennium Development Goals

• Eradicate extreme poverty and hunger
• Achieve universal primary education
• Promote gender equality and empower women
• Reduce child mortality

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Millennium Development Goals

• Improve maternal health
• Combat HIV/AIDS, malaria, and other diseases
• Ensure environmental sustainability
• Develop a global partnership for development

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Environmental Justice
Where is the justice In the inequitable
distribution of pollution and of environmental
degradation, with their adverse effects on humans
and ecosystems?
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Environmental Justice
Where is the justice When people that are
of lower incomes and minorities have a
disproportionate exposure to environmental
hazards?
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Environmental Justice
Justice can be found In sustainability,
in the reduction and elimination of poverty, in
personal action, and in an attitude of
responsible stewardship toward the Earth and its
inhabitants.
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Review Questions

• What is sustainability?
• How does sustainability define the relationship
  between the present and the future?
• Basically, what does economics study?
• What is supply?

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Review Questions

1. What is demand?
2. Explain the idea and effects of scarcity.
3. What (who?) is the market?
4. How are supply and demand related?

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Review Questions

1. What is the equilibrium point?
2. Explain how the law of supply and the law of
   demand are interrelated.
3. What are externalities?
4. Distinguish between GDP and GPI (and explain what
   each abbreviation stands for).

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Review Questions

1. What does the Kuznets curve suggest may be true
   about income and environmental degradation?
2. Define microlending.
3. What are the three forms of capital?
4. Explain the cradle-to-grave concept.

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Review Questions

• What are three major worldviews regarding the
  environment?
• Name four international agencies.
• Name two Federal (U.S.) agencies with
  responsibility for environmental regulation.

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Review Questions
20. What is the triple bottom line? 21. What
are the two major challenges of our time?