12/6/2012

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When it is asked how much will it
cost to protect the environment,
one more question should be
asked: how much will it cost our
civilization if we do not ?
Gaylord Nelson
ECONOMICS,
ENVIRONMENT, AND
SUSTAINABILITY
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2
FOUR SCIENTIFIC PRINCIPLES OF
SUSTAINABILITY
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ECONOMIC RESOURCES
Economic system
Social institution through which goods and
services are produced, distributed, and
consumed to satisfy peoples wants in the
most efficient possible way
ECONOMIC RESOURCES
Natural
Resources and services
Human
Physical and mental talents that provide labor,
innovation, culture, and organization
Cultural skills people pick up from their families and
friends the ability to be trustworthy (moral capital)
Getting people to work together to implement shared
visions of a better world (social capital)
Manufactured
Machinery, equipment, factories (made from natural
resources with the help of human resources)
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ECOLOGICAL PRICING
Assigning monetary values to resources not traded
in the marketplace
Existence value
Aesthetic value
Option value

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ECOLOGICAL PRICING
Mitigation cost
Willingness to pay
ESTIMATING THE FUTURE VALUE OF A
RESOURCE
Economics and ethics
Discount rate
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HIDDEN HARMFUL COSTS
Market price does not include most of the
environmental, health, and other harmful costs
associated with its production and use
Internal/direct cost
External/indirect cost
OPTIMUM RESOURCE USE
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OPTIMUM POLLUTION CONTROL
Demand for
cleanup by users
ECONOMIC TOOLS FOR IMPROVING
ENVIRONMENTAL QUALITY
Full-cost pricing
Having prices that tell the ecological truth
Including external costs in market prices informs
consumers about the harmful impacts of their
purchases on the earths life-support systems and
on human health
Why is it not used more widely?
Eco-labeling


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ECONOMIC TOOLS FOR IMPROVING
ENVIRONMENTAL QUALITY
Subsidy shifting
Green taxes
Shifting taxes from wages and profits to
pollution and waste
Green economics
Selling services instead of things
Environmental laws and regulations
REDUCING POVERTY TO IMPROVE
ENVIRONMENTAL QUALITY AND
WELL BEING
Poverty defined
Forgive international debts
Increase international aid
Microloans to the poor
solidarity groups
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REDUCING POVERTY TO IMPROVE
ENVIRONMENTAL QUALITY AND
WELL BEING
Achieving the Millennium Development Goals
Data from UN, WHO, US Dept. of
Commerce, US Office of Mngt. and Budget;
Figure adapted from G.T. Miller, Jr. Living in
the Environment, 15
th
Ed. , 2007
TOTAL EARTH
RESTORATION AND
SOCIAL BUDGET = USD 245 B
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MAKING THE TRANSITION TO MORE
ENVIRONMENTALLY SUSTAINABLE
ECONOMIES
New industries and new
jobs
Aquaculture
Biodiversity protection
Biofuels
Climate change research
Conservation biology
Eco-industrial design
Eco-tourism
management
Energy efficient product
design

Envtl chem.; design;
economics; educ.; engg.;
health; law; nanotech.;
Fuel cell tech
GIS
Geothermal geologist
Hydrogen energy
Marine science
Pollution prevention
Solar cell tech
Sustainable forestry; agrl
Water conservation