What are the most important environmental problems in China?
It's toxic air and toxic water
What has caused the Chinese government to flourish?
Decentralization of power
How does China deal with environmental issues?
China turned to international nongovernmental organizations to focus attention on environmental issues
What are economics?
the social science that deals with the production, distribution, and consumption of goods and services and the theory and management of economies or economic systems
What is an economy?
the system of exchanges of goods and services worked out by members of society
How does economic activity impact society?
it can damage the environment and human health; government rules and regulations imposed limits
As income levels rise, what problems occur?
Inadequate sanitation declines through taxes and technology; Air Pollution increases and then declines through recognition and public policies; Suburban sprawl / CO2 emissions increase
What are economic systems?
Social and legal arrangements people construct to satisfy their needs and wants (to improve their well-being)
When does a centrally planned economy occur?
Occurs with dictatorships
When does a free-market (capitalistic) economy occur?
Occurs in democracies
What are the "factors of production" in an economy?
Land (natural resources), Labor and Capital
How does economic activity work?
involves circular flow of money and products; money flows from households to businesses; money flows from businesses to households; labor, lands and capital are invested
What do rulers decide?
they make all basic decisions in a centrally planned economy (what/when/how much is produced) (where and by whom things are produced)
What does the government decide?
it owns and manages the industry; workers lack freedom to choose or change jobs
What happens in a market economy?
the market decides what will be exchanged, and is free from governmental interference; system is open to competition and the interplay of supply and demand; system is driven by people acting in their self-interest; competition increases efficiency
What happens when the government steps in?
they own and operate infrastructure; control interest rates and adopt policies; powerful business interests manipulate market economies
Is there an economic conscience?
many believe a capitalist economic system lacks a conscience; market economies only offer access to goods and services; self-interest leads to resource exploitation and pollution; governments also manipulate the market
What is the importance of trade?
it is a fundamental economic activity; drives the free-market economy; has become a dominant force in society through increased globalization
What is the World Trade Organization (WTO)?
implements and enforces trade rules; tries to reduce or eliminate trade barriers (tariffs) and subsidies
How does the WTO adjudicate international trade issues?
elevates trade over human rights and environmental concerns; carries out trade agreements and disputes rulings in closed sessions
Why did the WTO rule against the U.S.?
requiring shrimp imports to be certified as turtle safe; banning import of wooden crates because they harbored the Asian long-horned beetle; banning products made by using child labor
Why is the future of WTO unclear?
failure to reach agreements signals a weakening in global trade governance; future will likely consist of bilateral agreements between countries
What are the successes of a global economy?
mobilizes people; has improved well-being
What are the bad things about a global economy?
poverty and hunger; decline of ecosystem goods and services; loss of biodiversity
What are the good things about a sustainable economy?
improve human well-being; will value and preserve ecosystem goods and services; will use the precautionary principle to minimize risks; businesses will eagerly provide green products
What are the resources in a sustainable economy?
land, labor and capital
What is economic production?
the process of converting the natural world to the manufactured world
What is ecosystem capital?
the rule of natural ecosystems as essential life-support elements;
What is natural capital?
ecosystem capital plus non-renewable mineral resources
What is natural capitalism?
an economic system promoting sustainability
What are the three major components of a nation's wealth?
produced, natural and intangible capital
What is produced capital?
goods and services (human-made buildings and structures; machinery and equipment; savings)
What is natural capital?
goods and services supplied by natural ecosystems; renewable natural capital can be depleted if not managed wisely; nonrenewable natural can be depleted; some components are easier to measure than others
What are the three elements of intangible capital
1. human capital (the population's physical, psychological and cultural attributes); 2. social capital (societal and political environment; 3. knowledge assets (knowledge that can be transferred to others)
What are the finding of the World Bank regarding wealth of nations?
human resources are the dominant source of wealth; natural capital also ranks high (but plays a more important role in poor countries)
What is the dominance of intangible capital?
shows the importance of investing in health, education and nutrition; emphasizes an efficient judicial system and can uncorrupt government (social capital)
What is Gross National Product (GNP)?
all goods and services produced (consumed) by a country in a given time frame
What is Gross Domestic Product (GDP)?
GNP minus net income from abroad (compares rich and poor countries; assesses economic progress)
How is GDP flawed?
buildings and equipment wear out or depreciate
What is Capital Depreciation?
is charged against the value of production
What is Net GDP?
production of goods and services minus capital depreciation
What is Natural Capital Depreciation?
GNP does not account for depreciation of natural capital; after logging a forest, a nation can account for sale of the timber; environmental degradation and depletion count as an asset and as economic productivity
How can you correct GDP?
calculate the current market value of natural assets; an accurate GDP accounts for all depreciation
What is Agenda 21?
a document from the 1992 Earth Summit in Rio de Janeiro (called for developing national systems of integrated environmental and economic accounting)
What is Genuine Progress Indicator (GPI)?
assumes some economic activities are positive and sustainable
What are the positive and negative factors of GPI?
Positive factors: housework, parenting, and volunteering; Negative factors: crime, pollution, resource depletion, and farmland loss
What are essential conditions for a market economy?
resources are not distributed evenly among nations
What must economic development support to achieve equity?
social capital; law, an honest legal system, a free press; a well developed market economy; free entry into and exit from markets; communication and transportation networks
What happens to societies lacking the essential necessities of a market economy?
suffers poverty and environmental degradation; the rule of law index; some countries have negative intangible capital
What is intragenerational equity?
making possible for others what is possible for you; used for sustainable development; problem = the discount rate (finding the present value of some future benefit or cost)
What is environmental public policy?
includes laws and regulations that deals with a society's interactions with the environment, is developed at all levels of government, its purpose is to promote the common good, two goals = improve human welfare/protect the natural world; addresses prevention or reduction of pollution
What is the legislative branch of the U.S.?
citizens elect legislators to the Senate and House of Representatives (establishes laws)
What is the executive branch of the U.S.?
citizens elect the president (administrative agencies report to the president); asks for money for agencies and programs
What is the judicial branch of the U.S.?
interprets the laws
What is the responsibility of Congress?
responsibility for environmental public policy (government agencies implement legislation)
What are the responsibility of agencies?
develops rules and regulations covered in the law
What policies to states establish?
policies to reduce greenhouse gas emissions, encourage recycling... (often ahead of the federal government on environmental issues)
What is the objective of environmental public policy?
to change the behavior of polluters and resource users
What are the two approaches to accomplish environmental public policy changes?
command and control strategy (a direct regulatory approach that sets standards and prescribes technologies); market strategy (uses the market to set prices on pollution and resource use)
What is the command and control strategy approach?
guarantees some level of pollution; polluters have no incentive to use technology to lower pollution; pollution prevention is still the best course of action
What is the Market Approach?
are simple, efficient and equitable; uses incentives to reduce resource use and pollution costs
What is the payments for ecosystem services (PES)?
establishes a monetary value for a ecosystem service (beneficiaries pay landowners to maintain the service instead of converting their land to another use)
What is the policy life cycle?
the predictable course of policy development
What is the recognition phase of a policy life cycle?
usually initiated by public concern; results from published scientific research; public involvement starts the political process; the problem gets attention from some level of government
Who is Mario Molina and Sherwood Rowland?
physical chemists that discovered the threat posed by chloroflourcarbons to the ozone layer in the stratosphere; their work lead to the Montreal Protocol (international agreement to phase out the use of ozone-destroying chemicals around the world)
What is the formulation phase of a policy life cycle?
the public is aroused and debates policy options; political battles occur over regulation and who pays for it; politicians hear from their constituencies and lobbyists
What are the three E's of environmental policy?
Effectiveness; Efficiency and Equity
What is the implementation stage of a policy life cycle?
the real political and economic costs are exacted; focus moves to regulatory agencies; public concern and political weight decline; emphasis shifts to development and enforcement of regulations; industry learns how to comply
What is the control stage of a policy life cycle?
years have passed since recognition stage; policies are supported; regulations become streamlined; the public may forget there was a serious problem
What are the problems that occur throughout the different stages?
countries in different stages of development are in different stages of the policy life cycle for any problem; developing countries have serious problems because public policies have not caught up with the need for control; discrepancies result from the costs of development and implementation of public policy
What are the costs of environmental public policy?
some policies have little or no direct monetary costs; most policies impose real economic costs that must be paid
What is the impact of industries on the economy?
special interest group and conservative think tanks argue that environmental regulations are excessive; the "environment versus economy" trade-off is a myth
How is environmental protection not bad for the economy?
states with the strictest regulations had the highest job growth and economic performance; environmental protection industry is huge
What are the impacts of environmental policy?
Environmental public policy does not diminish a nation's wealth; environmental protection industry is a major job-creating, profit-making, sales-generating industry; the argument that environmental protection is bad for the economy is unsound
What is the benefit-cost analysis?
the president issues executive orders; President Reagan issued Executive Order 12291 (all major regulations must have a benefit-cost analysis); benefit-cost analysis (examines the need for a proposed regulation)
What are the costs versus the benefits?
the benefits outweigh the costs of an action; benefit-cost analysis builds efficiency to policy; a properly done analysis considers all costs and benefits
What is an external cost?
some effect of a business process not included in the usual calculations of profit and loss
How does environmental regulations impose real costs?
costs of pollution control; banning an offensive product also incurs costs; regulations prevent an external bad by imposing economic costs shared by government, industries, and consumers
How do costs go up?
pollution control costs increase exponentially with increased control; pollution may be partially reduce inexpensively; regulatory control focuses on optimum cost-effectiveness
How do costs go down?
pollution-control technologies and strategies are understood and available; unanticipated problems increase costs; industry and government overestimate regulatory costs
What is the Regulatory Right to Know Act?
directs the Office of Management and Budget (OMB) to report to Congress (estimates costs / benefits of federal rules; benefits must exceed costs of compliance)
What are the benefits of environmental regulation?
The Regulatory Right to Know Act; benefits of policies are hard to calculate
What is shadow pricing?
many benefits are difficult to estimate; shadow pricing (assesses what people might pay for a particular benefit); shadow pricing is hard when putting a value on human life; shadow pricing for nonhuman parts of the environment depends on people's willingness to pay for preservation
What is the cost-effectiveness analysis?
an alternative option for evaluating costs of regulation; alternative strategies are analyzed for costs; significant benefits are achieved by modest degrees of cleanup