Download Ecological Economics & Sustainability: Self-Interest, Commons, & Steady-State and more Slides Biology in PDF only on Docsity! Ecological Economics & Nature Conservation Docsity.com Economics Adam Smith – The Wealth of Nations (1776) Human motives are often driven by self-interest, but competition in the free market would tend to keep prices low, yet create incentives for a wide variety of goods and services The free market appears chaotic and unrestrained, but selfish interests may help guide it by their collective “invisible hand” to supply the right amount and variety of goods and services to meet demand “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own [selfish] interest” Definition of economics from Levitt & Dubner’s (2005) Freakonomics: “explaining how people get what they want” Docsity.com Ecological / Environmental Footprints J. Diamond – New York Times Op-Ed (January 2, 2008) “What’s Your Consumption Factor?” “The average rates at which people consume resources like oil and metals, and produce wastes like plastics and greenhouse gases, are about 32 times higher in North America, Western Europe, Japan and Australia than they are in the developing world.” Docsity.com Environmental Economics With respect to matter, the economy is an open subsystem of a closed, finite total system – the biosphere Steady-State Economics Model Matter cycles within and energy flows through the global ecosystem Docsity.com Environmental Economics Steady-State Economics Model No escape from the Laws of Thermodynamics E.g., 1st Law of Thermodynamics = Conservation of Energy Docsity.com Environmental Economics Steady-State Economics Model Sustainability – amount of consumption that can be sustained indefinitely without degrading capital stocks (including natural capital) Docsity.com Short-term consumption rate Capital stocks Trade-off Environmental Economics Sustainability – amount of consumption that can be sustained indefinitely without degrading capital stocks Docsity.com Short-term consumption rate Capital stocks ? Unsustainable Sustainable Environmental Economics Sustainability – amount of consumption that can be sustained indefinitely without degrading capital stocks Docsity.com Short-term consumption rate Capital stocks ? Unsustainable Sustainable Environmental Economics Sustainability – amount of consumption that can be sustained indefinitely without degrading capital stocks Docsity.com Economics Strongly Influence Policy Cost-Benefit Analysis At first blush it appears simple… Costs > Benefits project should not proceed Costs < Benefits project should proceedxxx Docsity.com Economics Strongly Influence Policy Cost-Benefit Analysis However, it must convert all costs and benefits to the same currency, and it must consider all of the trade-offs, both instrumental and intrinsic value (which is especially hard to monetize), hidden costs, and externalities Externality A true cost (usually in terms of environmental degradation) resulting from an economic transaction that is not included as a debit against economic returns What are some potential externalities of mountain-top mining? Docsity.com Economics Strongly Influence Policy Risk Assessment and Management Risk = the probability of a given potential hazard causing a given consequence, multiplied by the magnitude (severity) of that consequence Docsity.com Economics Strongly Influence Policy Precautionary Principle Since not all possible negative consequences of a project can be known ahead of time, this ethical principle states that if the consequences are judged by some informed persons to have a high likelihood of being negative (i.e., high risk), it is better to abandon the project Docsity.com
