Chapter 2

1. Chapter 2 Economics and Environmental Policy

2. What is Economics? • Economics – the study of how resources are converted into goods and services and how these goods and services are distributed and used • Goods – manufactured materials • Services – work that someone does for a company

3. Lesson 1-Economics • Types of Economies • Centrally planned economy – the government decides what is made • Free market economy – individuals decide what is manufactured • Mixed economy – both the government and the individuals play a role in making decisions • Supply • The amount of product offered for sale at a give price • Demand • The amount of product people will buy at a given price

4. economics • Supply and Demand are Related • The greater the supply, the lower the demand • Drives cost down (Great Depression) • More crops than the people wanted; overfarming • The smaller the supply, the greater the demand • Drives cost up (new release of an IPhone) • More people wanted the new Iphone • The ideal situation is that supply and demand are at an equilibrium.

5. Supply and Demand Curve

6. Economics • Cost-Benefit Analysis • Decision makers compare what they will sacrifice and gain by action • If costs out weigh the benefits, the idea is usually revised and/or abandoned. • If the benefits outweigh the costs, the idea is often pursued. • Not all costs and benefits is easily identified or defined

7. Economics and the environment • Non-Market Values • Values not usually included in the price of goods or services • Tend to be exploited by people • Beachfront property • Real estate on a golf course • Skiing on mountains • Price is set by the following • Surveys – people are asked how much they would be willing to pay for clean beaches or the preservation of a beautiful view • Comparisons made of similar homes in different areas ,where one overlooks a wooded area • Could estimate the price of the wooded area

8. Economics and the environment

9. Economics • Market Failure – markets to not consider the environment’s positive or negative effects on economies • Example • A chemical company emits pollution through its smokestacks, which in turn settle on the foliage, damaging it • The company usually does not pay for the clean-up, the tax payers do • The government has proposed incentives to companies to conserve resources and reduce pollution

10. Economics • Ecolabeling – manufactures of certain products explain on their labels how the products are grown, harvested, or manufactured • Products with ecolabels are manufactured with processes that do not harm the environment

11. Economics • Corporate Response • Corporations are trying to update their image by showcasing how they are “environmentally friendly” • Citizens Bank • Donate money every time somebody uses a check card • Reduces the amount of paper by not provided a receipt

12. Lesson 2 – US Environmental Policy • What is Environmental Policy? • Policy – consists of a formal set of general plans and principles for addressing problems and guiding decision making • Environmental policy – consists of general plans and principles to address the interactions between humans and the environment • Aims to protect quality, resources, resource sharing in the environment • Government, citizens, and other organizations are part of the policy making process.

13. Lesson 2 – US Environmental Policy • Branches of Government • Legislative – composed of the Senate and House of Representatives • Propose and introduce laws • Executive – composed of the President • Approve (enacted) or reject (vetoed) law the proposed by the legislative branch • Judicial – composed of the Supreme Court and lower courts • Interprets the laws

14. Lesson 2 – US Environmental Policy • History of US Environmental Policy • The First Period (1780’s to late 1800’s) • Most policy dealt with public management • Western expansion cost millions for Native Americans • The Second Period (late-1800’s to mid-1900’s) • Policy to deal with the environmental problems from Western expansion • The Third Period (mid- to late-1900’s) • Increased awareness of environmental problems caused a further shift in public policy

15. Lesson 2 – US Environmental Policy • Modern U.S. Environmental Policy • National Environmental Policy Act • NEPA required an Environmental Impact Statement (EIS) before the government made any decision affecting the environment • Environmental Protection Agency • Oversees regulation of water quality, air pollution, and solid waste • Other Important Laws • Federal Water Pollution Control Acts of 1948 and1972 • Clean Water Act of 1977 • Post-1980 • Backlash against environmental policies; recent resurgence

16. Lesson 3-International Environmental Policy and approaches • International Environmental Policy • The United Nations • 50 nations founded the UN in 1945 • Purpose to promote peace and solve the nations’ problems • European Union • 27 member nations • Formed after WWII with the goal to promote economic and social progress

17. Lesson 3-International Environmental Policy and approaches • International Environmental Policy • The World Trade Organization (WTO) • Established in 1995 • Promotes and enforces free trade • Fair trade is based on the principle of equity for producers and buyers of goods (for example: coffee) • World Bank • Established in 1944 • Provides credits, loans, and grants for projects that will improve living standards in different countries • Non-Governmental Organizations • Greenpeace, Population Connection, and Conservation International • Contribute funding, expertise, and research

18. Lesson 3-International Environmental Policy and approaches • Approaches to Environmental Policy • Command and Control approach • Government sets rules and threatens punishment for violations • Tax Breaks and Subsidies • Lowering taxes encourages businesses to comply with environmental policy • Subsidy is a giveaway of cash or public resources to encourage a particular activity or lower the price of a product • Green Taxes • Taxes imposed on companies that participate in activities that product harmful products for the environment

19. Lesson 3-International Environmental Policy and approaches • Approaches to Environmental Policy • Cap-and Trade • The government determines the amount of pollutants it will allow and issues a permit for polluters to emit a certain fraction of that amount • Local Incentives • Local governments may charge residents for waste disposal based on the waste they generate • Rebates may be given for energy-efficient measures or appliances

20. Lesson 3-International Environmental Policy and approaches • The Environmental Policy Process • Identify the problem • Clearly identify an environmental problem through curiosity, observation, recordkeeping, and an awareness of the relationship between people and the environment • Identify causes • Identify causes of the problem through scientific research • Envision a solution • Proposing solutions to environmental problems

21. Lesson 3-International Environmental Policy and approaches • Get Organized • Organizations are more effective than individuals • Gain Access • Lobbying involves efforts to influence an elected official into supporting a specific interest • Help a Solution become policy • Prepare a bill that describes the desired policy