Approaching Economics

1
Approaching Economics

• Chapter 1

2
Introduction

• Important history lesson 1
• Importance of investing in securing a sustained
  supply of natural resources
• Natural resource adequacy
• Search for policy Discipline is natural
  resource economics
• Important history lesson 2
• High cost of ignoring the environment
• Sustaining environmental quality
• Search for policy Discipline is environmental
  economics

3
Introduction

• Avoiding future environmental and natural
  resource mistakes involves asking and answering
  several hard questions
• What is the earths carrying capacity?
• How do we measure that carrying capacity?
• Does current economic activity gt that capacity?
• How do economic systems deal with scarcities?
• Designing political systems to deal with
  scarcities
• Designing institutions for acceptable living
  standards
• Designing sustainable institutions

4
Chapter goals

• Describe the disciplines of environmental and
  natural resource economics
• Identify several natural resource and
  environmental issues
• Explain what can be gained by the study of
  natural resource and environmental economics
• Discuss the importance of economic analysis
• Describe how economic principles contribute to
• Setting the environmental agenda
• Designing environmental policies
• Implementing environmental policies
• Evaluating environmental policies

5
Natural Resource and Environmental Economics

• Natural resource issues
• Cedars of Lebanon
• The Anasazi and Drought
• Water Californias ultimate resource
• Environmental Issues
• Drinking Water
• Ozone Depletion
• Toxic Wastes
• Air Pollution

6
Natural Resource Issues

• Cedars of Lebanon
• What were they used for?
• How nations got them
• How do we know this?
• Military uses
• Effect of growing demand for a scarce natural
  resource
• Message

7
Natural Resource Issues

• Anasazi and Water
• Anasazi history
• Why they disappeared
• Chapter message

8
Natural Resource Issues

• Water Californias Ultimate Resource
• Flooding
• Central Valley Project
• Chapter message

9
Environmental Issues

• Safe drinking water
• Problem
• Old theory
• Problem with theory
• Who gets good water, who doesnt?
• Importance of economics in policy solutions
• Ozone Depletion importance of economic
  benefits/costs and their distribution in policy
  solutions
• Toxic wastes Is society willing to pay the
  costs to receive the benefits?
• Air pollution Could emission permits work?

10
Why Study Environmental Economics?
11
Informing Environmental Policy

• Emotions
• Few conclusions
• Power of economics to frame environmental policy
  debates

12
Empowerment

• Most political leaders have studied economics
• Economics empowers you by supplying a framework
  for understand incentives and choices of people
  and communities.
• Economics helps you understand motivations behind
  environmental debates.
• Economics gives you the language and framework to
  approach objectively major environmental issues.
• Economics helps you understand and tolerate
  environmental debates driven by strong economic
  interests.

13
Reality Checks

• Success of environmental proposals often depends
  on its economic impact.
• 2 economic questions surrounding environmental
  policy proposals
• Is it the cheapest way to achieve environmental
  goal
• Will it produce benefits gt costs?

14
Improved Communication

• Economics provides a common language to
  communicate environmental issues and policy
  proposals

15
Focuses Policy Debates

• Economics helps focus environmental policy
  debates
• Technical science Teach us to ask if the
  proposal will work?
• Economics Teaches us to ask if the proposal
  will pay (i.e., if benefits gt costs)
• Example Debate over the (US) Arctic National
  Wildlife Refuge benefits of leaving the
  wilderness untouched v. benefits of added energy
  security.

16
Importance of Economic Analysis

• This book supplies economic principles needed to
  understand 21st century environmental policy
  issues. It also applies those principles.
  Examples
• Brundtland Report
• Chinese Govt population Report
• US EPAs acid rain program

17
Economics and Environmental Policy

• Economics, well-understood, helps us accomplish
  four aims
• Set the environmental policy agenda
• Design of environmental policy
• Implementation of environmental policy
• Evaluation of Environmental policy