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GEOG 352: Managing Natural and Social Capital

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Title: GEOG 352: Managing Natural and Social Capital


1
GEOG 352 Managing Natural and Social Capital
  • Day 3

2
Housekeeping Items
  • SOLUTIONS is holding its inaugural meeting of the
    semester in the log cabin at 430 today.
  • The deadline for proposals for the WDCAG
    conference is the 16th (this Friday) see the
    details in the Call for Papers and Posters on the
    Geography web site.
  • On Thursday, February 26th, there is a free
    webinar on achieving greenhouse gas neutrality
    for institutions that is open to faculty and
    students (see the note in the folder).

3
Housekeeping Items
  • Anyone need an outline?
  • I'm passing around a sign-in sheet and a folder
    of items of possible interest.
  • Any reactions to Raimo's talk?
  • I haven't been able to determine exactly when the
    Ladakh video was made, and I haven't been able to
    find any recent material on Ladakh. Most of
    Helena Norberg-Hodge's publications (which are
    not only about Ladakh) end around 2001/ 2002, but
    Wikipedia has a good history.

4
Field and Olewiler Readings
  • The readings for last week were excerpts from
    Environmental Economics by Barry Field and Nancy
    Olewiler. These authors define economics as the
    study of how and why people whether they are
    consumers, firms, non-profit organizations, or
    government agencies make decisions about the
    use of valuable resources.
  • They specify that environmental economics which
    is not the same as ecological economics is
    about how economic activities affect our natural
    environment the atmosphere, water, land, and an
    enormous variety of living species.

5
Field and Olewiler Readings
  • This sub-field of economics is said to address
    why economic actors waste natural resources and
    dump pollutants into the environment, and what
    can be done about it i.e. what the most
    effective tools are for modifying people's
    behaviour. As with mainstream economists in
    general, environmental economists' overriding
    concern is with economic efficiency (more on this
    later), and secondarily with equity/ fairness and
    environmental quality.
  • The authors argue that morality in environmental
    issues won't take use very far. In fact, they
    make the surprising observation that people
    largely do what they do because of the
    institutional context in which they are operate.

6
Field and Olewiler Readings
  • What are some examples of this, and why is
    admission potentially surprising coming from
    economists?
  • What do you think of the statement people
    pollute because it is the cheapest way they have
    of solving a certain practical problem how to
    dispose of the waste products remaining after
    production and consumption of a good?
  • If we combine Field and Olewiler's perspective on
    the limitations of a moral approach with Jonathan
    Porritt's musings, then we can see a certain
    sequencing in the process of social change.
    First, we need to pose issues of morality, then
    the necessity of change, then the desirability of
    change, and finally the concrete possibility.
    examples?

7
Field and Olewiler Readings
  • Field and Olewiler discuss the importance of
    economic incentives as a means for changing
    behaviour of individuals and firms. Whether
    material or non-material, an 'economic
    incentive' is something in the economic world
    that leads people to channel their efforts at
    production and consumption in certain
    directions.
  • They challenge the notion that profit-seeking is
    the main reason for pollution. What do you think
    about this assertion? They also argue that lack
    of ownership rights to environmental resources
    means that there are few incentives to take the
    environmental consequences of our actions into
    account. Comments?

8
Field and Olewiler Readings
  • They also introduce the notion of externalities
    those costs or benefits not directly paid for by
    producers or consumers, and provide a good
    overview of what they are relative to the
    operation of private motor vehicles.
  • In response to this, they discuss some possible
    ways of inducing people to change their
    behaviour AirCare, taxing kilometres travelled
    or making gas more expensive, a tax on vehicle
    ownership, or a buyback program for older cars.
  • For corporations, there are regulations
    controlling emissions or fuel efficiency averages
    for corporate fleets, or limits on sulphur
    content in gasoline, etc.

9
Field and Olewiler Readings
  • In general, they favour approaches that
    restructure the incentives facing firms and
    consumers in such a way that it mobilizes their
    own energy and ingenuity to find ways of reducing
    their impacts on the environment, rather that
    adopting highly prescriptive regulations.
  • They include a discussion of cost-benefit
    analysis, one of the possible topics for the tool
    presentations, and they talk indirectly about
    natural capital, as well as about social capital,
    but their definition of it is wrong.
  • Don't worry about the discussion of production
    possibility frontiers, or any of the confusing
    charts or algebraic notions. However, we will be
    returning to the idea of the Environmental
    Kuznets Curve.

10
Field and Olewiler Readings
  • They discussion the related issue of whether
    pollution havens actually exist in developing
    countries, and this is another possible topic for
    our debates.
  • In Chapter 4, they discuss the notion of social
    efficiency whereby one needs to consider all the
    groups in society that benefit from a particular
    form of production and all those who suffer
    costs, including in the area of non-market
    values. However, they do not consider other
    species in this calculus. They note that benefits
    also need to be considered in terms of equity, so
    that not all the benefits accrue to the rich.

11
Field and Olewiler Readings
  • They note that in terms of social cost
    accounting, Social costs Private costs
    External (environmental) costs and suggest that
    when external costs are present, private markets
    will not normally produce quantities of output
    that are socially efficient. (They give the
    example of road use.)?
  • They discuss open-access resource systems, such
    as fisheries or groundwater, which is something
    we will be discussing later in the semester. They
    see the over-exploitation of these as resulting
    from a lack of property rights, a theme we will
    return to later.

12
Field and Olewiler Readings
  • They talk about external benefits where producers
    or consumers have the economic responsibility for
    specific things, such as farmland or quiet
    lawnmowers, which produce benefits for society,
    but for which the economic actor is not
    compensated.
  • Some external benefits are public goods that
    is, no one can be excluded from their use or
    enjoyment, and one person's use does not exclude
    another. The examples they give are the
    protection offered by standing armies or clean
    air.

13
A Critique of the Assumptions of Traditional
Economics
  • I hope you got a chance to read my review of The
    Living Economy, edited Paul Ekins (not Elkins, as
    was stated in the review).
  • There are many assumption of traditional
    economics which can be held up to question, but
    the ones I would like to focus on here are as
    follows
  • humans are utility-maximizing individuals
  • self-interest (the invisible hand) tends to
    lead
  • to an automatic increase in social
    well-being

14
A Critique of the Assumptions of Traditional
Economics
  • on a grander scale, that pursuit of
    comparative
  • advantage and increased trade necessarily
    leads
  • to a rise in global well-being
  • that economic efficiency tends to lead to
  • enhanced social well-being
  • that when natural capital is depleted, other
  • forms of capital can be substituted for it
  • i.e. technology will come to the rescue.
  • Any comments on any of these? To get into them I
    would like to read some passages from a standard
    economics book.
  • Please read the Lutz article for Wednesday.
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