Introduction of Environmental Economics Why People Pollute? ?????: ??????????????? ???

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Introduction of Environmental Economics Why
People Pollute?????? ??????????????????QA??
????????

• ??? ???
• ??????????????
• http//mail.tku.edu.tw/086138/

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What is Economy?

• The economy is a collection of technological,
  legal, and social arrangements through which a
  group of people seek to augment their material
  and spiritual standards of life.
• See the next two pages for further discussions on
  their and material and spiritual.

more
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Moral discussion ontheir

• ????(?????)???(welfare) ,?? ??????????????
• ???????????????,??????????????????????????? . . .

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Moral discussion on material and spiritual

• ????????????????,? material ? spiritual ?????

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The fundamental circular flow model of economic
activity, QA

Output market
Demand for goods and services
Supply for goods and services
expenditures
revenues
Firms
Households
costs
income
Demand for resources
Factor market
Supply of resources
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The materials balance model the interdependence
of economic activity and nature, QA

Nature
Natural resources drawn from nature
Residuals from production
Residuals from consumption
Output market
Supply for goods and services
Demand for goods and services
Firms
Households
Reduce ??Reuse ???Recycling ???
Reduce Reuse Recycling
Demand for resources
Factor market
Supply of resources
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Produce Less Waste by Practicing the 3
RsReduce, Reuse, Recycle, QA
http//www.epa.gov/epaoswer/non-hw/muncpl/reduce.
htmreduce

• ReduceSource reduction, often called waste
  prevention, means consuming and throwing away
  less.

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• ReuseReusing items by repairing them, donating
  them to charity and community groups, or selling
  them also reduces waste. (A shower curtain story,
  ???)
• RecycleRecycling turns materials that would
  otherwise become waste into valuable resources
  and generates a host of environmental, financial,
  and social benefits.

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????R , 31,??4R QA

• Refuse??(???????)
• http//recycle.epa.gov.tw/main.asp

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Definition of economics

• Economics is the study of how people choose to
  use their limited resources (land, labor, and
  capital (???) goods like trucks and machinery and
  buildings) to produce, exchange, and consume
  goods and services.

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• Natural resource economics
• A field of study concerned with the flow of
  resources from nature to economic activity.
• Environmental economics
• A field of study concerned with the flow of
  residuals from economic activity back to nature.
• residual The amount of a pollutant remaining in
  the environment after a natural or technological
  process has occurred.

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Scope of environmental damage

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Local pollution examples

• Urban smog (smoke fog)
• Solid waste pollution
• Leaching contaminants such as lead and mercury
  may flow into soil or groundwater.

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Regional pollution examples

• Acid rain damages?????
• human respiratory system
• ecosystems soil, lake, forest
• Building
• http//www.guardians.net/egypt/sphinx/
• http//mail.tku.edu.tw/086138/EnvFutures/TajMahal.
  doc

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Global pollution examples

• Ozone depletion --- ultraviolet radiation
• Caused by CFCs (ChloFluoroCarbons)
• Damages
• weakens human immune system
• cause skin cancer
• affect ecosystems
• Global warming --- ???,

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An Abrupt Climate Change Scenario and Its
Implications for United States National Security

• http//www.ems.org/climate/pentagon_climate_change
  .htmlreport

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Scene 1

• Recent research, however, suggests that there is
  a possibility that this gradual global warming
  could lead to a relatively abrupt slowing of the
  ocean's thermohaline conveyor (???????) , which
  could lead to harsher winter weather conditions,
  sharply reduced soil moisture, and more intense
  winds in certain regions that currently provide a
  significant fraction of the world's food
  production. See home page

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Scene 2

• The research suggests that once temperature
  rises above some threshold (???,??), adverse
  weather conditions could develop relatively
  abruptly, with persistent changes in the
  atmospheric circulation causing drops in some
  regions of 5-10 degrees Fahrenheit in a single
  decade.

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Scene 3

• The report explores how such an abrupt climate
  change scenario could potentially de-stabilize
  the geo-political environment, leading to
  skirmishes, battles, and even war due to resource
  constraints such as

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Scene 4

• 1) Food shortages due to decreases in net global
  agricultural production 2) Decreased
  availability and quality of fresh water in key
  regions due to shifted precipitation patterns,
  causing more frequent floods and droughts3)
  Disrupted access to energy supplies due to
  extensive sea ice and storminess

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Scene 5

• As global and local carrying capacities are
  reduced, tensions could mount around the world,
  leading to two fundamental strategies defensive
  and offensive.  Nations with the resources to do
  so may build virtual fortresses around their
  countries, preserving resources for themselves. 
  Less fortunate nations especially those with
  ancient enmities with their neighbors, may
  initiate in struggles for access to food, clean
  water, or energy.  Unlikely alliances could be
  formed as defense priorities shift and the goal
  is resources for survival rather than religion
  (Israel?), ideology (Taiwan?), or national honor
  (Nazi?). ?? ????

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Environmental objectives, QA

• 1. Environmental quality (present oriented)
• 2. Sustainable development (future oriented)
• 3. Biodiversity (future oriented)

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Environmental quality

• Demand for zero pollution is impractical.
• What pollution level is acceptable to society?
• It is a difficult decision, and it depends on the
  following factors.
• human health
• pollution reduction expenditures
• availability of pollution abatement technology
• the risk of a given environmental hazard

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Sustainable development

• Definition The management of earths resources
  such that their long-term quality and abundance
  are ensured.
• But, a nations primal objective is speeding its
  economic growth that is usually measured by GDP.

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Definition of GDP??????

• Gross domestic product (GDP) is the total value
  in money terms of all the production in a country
  in one year.
• GDP calculation adding the price of goods and
  services produced.

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The objective GDP growth

• Economists and many government officials often
  use GDP as a measure of economic welfare.
• The desire to achieve the targeted GDP growth may
  imply the growth of industrial productive
  activity.

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GDP is not a good indicator!

• The consequences of this expended productive
  activity are ecological damages and natural
  resource depletion.
• ??????????????????????,??????????????????????,???
  ??GDP??????

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Biodiversity

• Biodiversity, or biological diversity, refers to
  the variety of distinct species, their genetic
  variability, and the variety of ecosystems they
  inhabit.
• Biologists believe there may be as many as 100
  million species on earth.

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Biodiversity

• The major threat to biological species is the
  destruction of natural habitat.
• Reasons for the destruction
• population growth
• poverty
• economic development (which includes)
• harvesting for tropical forests (woods for
  example)
• conversion of natural land masses into
  alternative uses

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Biodiversity

• Other minor threats to biological species are,
• pollutants
• commercial activity
• sport hunting
• In contrast, killing in animal world is not for
  pleasure. Example Lion cub murder. Stronger or
  better gene are preserved through the killing
  process.

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Why people pollute?
Main Entry 2goodFunction noun 3 a something
that has economic utility or satisfies an
economic want b plural personal property having
intrinsic value but usually excluding money,
securities, and negotiable instruments

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Market

• The interaction between consumers (or buyers) and
  producers (or sellers) to execute the exchange of
  a well-defined commodity.

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Private goods

• A commodity that has two characteristics, rivalry
  in consumption and excludability.
• Examples ice cream, tissue paper, .
• rivalry in consumption The consumption of the
  goods by one person precludes that of another.
• excludabilityThe benefits of consumption are
  exclusive to that single consumer.

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What is market failure?

• ?market?classical microeconomic
  theory?????,???????????(outcome) ??????market
  failure ?
• Inefficient market conditions (???)???????????????
  ?????(i.e., the equilibrium point under the
  allocative efficiency criterion),??????????market
  failure?

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Market failure

• Market failure (e. g., the problem of
  environmental pollution) is the result of an
  inefficient market condition such as,
• imperfect information ?consumer????????????????
• imperfect competition ?????entry barrier ? ?????
  ?
• public goods (see next slide)

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Public good

• A commodity that is non-rival and non-excludable.
• Examples light house, national defense,
  environmental quality.
• non-rivalry in consumption The characteristic
  that makes it impossible (or prohibitively costly
  in a less strict sense) to prevent others from
  sharing in the benefits of a goods consumption.
• non-excludability The characteristic of
  individual benefits of consumption such that one
  persons consumption of a good does not preclude
  that of another.

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Free-ridership behavior

• This behavior occurs when a rational consumer
  recognizes that the benefits of a public good are
  accessible by allowing someone else to purchase
  it.

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Why people pollute?

• Environmental quality is a public good.
• Free-ridership is an attitude toward a public
  good.
• This attitude implies everyone expects others to
  pay the abatement cost for the degraded
  environmental quality. As a result, pollution
  problems persist and no further improvements due
  to polluters free-ridership attitude.

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Comment

• The desire of profit motivated self-interest, or
  greed, is the cause of degraded environmental
  quality and ecological catastrophe.

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Common property resources( Common???,???)

• Those resources for which property rights are
  shared by some, not all, group of individuals.
• Common property resources fall somewhere on a
  continuum between the extremes of pure public
  goods and private goods.
• Examples fisheries, animal populations, road
  network common, and grass land for
  pasture(???,???).

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A famous paper by a biologist, Hardin

• Hardin, G., The tragedy of the commons,
  Science, 1681246-1248, 1968.
• The system containing resources, e. g., food,
  air, energy, to which most people have ready
  access are called commons. ?common??public
  good?common property resources?
• He presents a cold logic that indicates the ruin
  of a common is resulting from the self-interest
  motive of those resource exploiters.

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A grass land for pasture example 2, p17

• Four farmer families live on a grass land, farmer
  Jones is one of them, and each farmer has 10
  cows.
• The carrying capacity (????)of this grass land is
  40 cattle.

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Payoff matrix

The other farmers action
Does not add additional cows
Each add one additional cow
Farmer Jones action
10001010,000
880119,680
Does not add additional cows
10001010,000
880108,800
970109,700
820119,020
Add one more cow
9701110,670
820119,020
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Farmer Jones rational decision

• No matter what the other farmers do, Jones
  rational choice is to add one cow.
• The other three farmers make the same rational
  choice independently.
• The result 44 cows on this grass land.
• Note that the carrying capacity allows 40 cows
  only.
• The tragedy begins from these self-interest
  rational choices.

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We can act luxuriously, as long as we take
within the limit of natures carrying capacity.
An example of non-tragedy American bison, 150
years ago http//news.nationalgeographic.com/new
s/2006/02/0223_060223_bison_video.html
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The solutions to avoid the tragedy , QA

• Direct provision of public goods
• Examples roadways, parks, and fire protection,
• Education and public information
• Many people do not know the implications or the
  consequences of pollution or resources depletion
  problems.
• Legislation
• No laws, no enforcement.

---More---
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The solutions to avoid the tragedy , QA

• Assignment of property right
• Property (e. g., park, lake, forest) owners will
  protect their property from damages.
• Establish policies that raise the price of a
  product to reflect the social cost of
  environmental damages
• Establish a market and a price for pollution

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Bibliography

• 1 Callan, Scott J., Thomas, Janet M.,
  Environmental Economics and Management Theory,
  Policy, and Applications, Dryden Press, 2000.
• 2 Chechile, Richard and Carlisle Susan,
  Environmental Decision Making a
  multidisciplinary perspective, Van Nostrand
  Reinhold, 1991.