Natural Resource Utilization & Pollution of the EnvironmentPaul L. Schumann, Ph.D.

2002 by Paul L. Schumann. All rights reserved.

IssuesResource utilization:

Resource depletionResource allocation across timePollution

Resource DepletionIssue: Are we at risk of running out of important natural resources?

Example: oilRelated issue: Do we need government regulation to deal with the problem?Depletion Models:

Exponential DepletionPeaked Depletion

Exponential DepletionRate of use increases exponentially over timeResource is used until it is depleted

Peaked DepletionUsage:

Increases exponentially for a whileThen peaksThen declinesResource never depleted

Peaked DepletionReasons:

As use increases, cost of extraction risesHigher costs result in higher pricesHigher prices create incentives

Peaked DepletionIncentives:

Consumers:Cut use directlySubstitutesProducers:Substitutes

Resource Depletion / ConservationSupporters of free markets:

Dont worry about resource depletionFree markets automatically take care of the issueCritics:

Dont assume that technology will bail us out of the problem

IssuesResource utilization

Resource depletionResource allocation across timePollution

Resource Allocation Across TimeIssue: Do the current generations have a moral obligation to save (conserve) resources for future generations?Apply principles:

UtilitarianRightsDistributive Justice

Resource Allocation Across TimeUtilitarian Principle

Free market ensures resource will be used at the time of its highest valueWhy? Owner of resource wants the greatest valueCritics:UncertaintyDiscounting to present valueProblem of multiple access / Dilemma of the commons

Resource Allocation Across TimeRights: Which generation has a right to use the resource?

People who do not exist cannot have rightsIf they have rights, are they of higher priority than our rights?Rights protect interests. We dont know the interests of future generations.

Distributive JusticeIssue: Is it fair that the current generations get the benefits of using the resource and leave the burdens for the future generations?

John Rawls: Put yourself in the original positionConclusion: Fix what you can, but at least dont make things worse

IssuesResource utilization

Resource depletionResource allocation across timePollution

PollutionWhy do we pollute?

We treat the natural environment as a free goodNo one owns it, so no owner seeks to protect itAllows us to externalize the cost of disposing of our wastes by simply dumping it into the environmentWe treat the natural environment as an unlimited goodEach persons pollution is small compared to the natural environment

Pollution Moral IssuesRights Principle

Human Rights: Each human being has a moral right to life and to a livable environmentAnimal Rights: All animals have a moral right to life and to a livable environmentPETA: www.peta.comPETA Summary: www.peta.com/mc/facts.htmlRights of All Living Things: All living things have a moral right to life and to a livable environmentEco-feminists: Care for the natural environment: all things have a right to exist

Pollution Moral IssuesHow far do we have a moral duty to go in order to protect moral rights to a livable environment?

Protect the environment at all costs?Leads to a consideration of the utilitarian principle

Pollution Moral IssuesUtilitarian Principle

Private cost: cost born by the sellerExternal cost: cost not born by the sellerPollution is an example of an external costExample: dump hazardous waste into a riverSocial cost = Private cost + External costUnregulated free market only considers private cost: market price reflects private cost only

Effects of External CostsFree market price is too low

Free market price does not consider the external costsRegulation needed to raise the market price

Optimum Pollution RemovalOptimum amount of pollution to remove depends on:

Benefits of removing pollutionCosts of removing pollution

Pollution RegulationStandards Approach

Regulation specifies the maximum amount of pollution allowedSet standard at optimum

Pollution RegulationIncentives Approach

More efficient than standards approachMethods:Pollution taxMarketable pollution rights

Case: Genetic EngineeringIs it ethical for Monsanto/Pharmacia to market genetically engineered plants? Why?

Utilitarian Analysis.What are examples of externalities in this case?Rights Analysis.What human rights are at stake? Other rights?Distributive Justice Analysis.Ethics of Care Analysis.Virtue Ethics Analysis.

Case: Genetic EngineeringWhat government regulations, if any, would be appropriate:

To correct externalities?To protect rights?To ensure fairness?To provide appropriate care?