Copyright © 2006 Pearson Addison-Wesley. All rights reserved. Chapter 10 The Environment and...
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Transcript of Copyright © 2006 Pearson Addison-Wesley. All rights reserved. Chapter 10 The Environment and...
Copyright © 2006 Pearson Addison-Wesley. All rights reserved.
Chapter 10
The Environment and Development
Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 10-2
Economics and the Environment
Environmental issues affect, and are affected by, economic development
Poverty and ignorance may lead to non-sustainable use of environmental resources
Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 10-3
Environment and Development: The Basic Issues
Sustainable development and environmental accounting
Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 10-4
Environment and Development: The Basic Issues
nm DDGNINNI *
Sustainable net national product is:
WhereNNI* is sustainable national income
GNI is Gross national incomeDm is the depreciation of manufactured
capital assetsDn is the depreciation of environmental
capital
Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 10-5
Environment and Development: The Basic Issues
ARDDGNINNI nm *
Alternatively, sustainable net national product is:
WhereNNI*, GNI, Dm, and Dn are as before R is expenditure needed to restore
environmental capitalA is expenditure required to avert
destruction of environmental capital
Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 10-6
Environment and Development: The Basic Issues
Sustainable development and environmental accounting
Population, resources, and the environment Poverty and the environment Growth versus the environment Rural development and the environment
Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 10-7
Environment and Development: The Basic Issues (cont’d)
Urban development and the environment The global environment
Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 10-8
The Scope of Environmental Degradation: A Brief Statistical Review
Environmental problems have consequences both for health and productivity
Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 10-11
Rural Development and the Environment: A Tale of Two Villages
Representative African village Representative South American village
Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 10-12
Traditional Economic Models of the Environment
Privately owned resources
Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 10-15
Traditional Economic Models of the Environment
Privately owned resources Common property resources
Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 10-17
Traditional Economic Models of the Environment
Privately owned resources Common property resources Public goods and bads: regional
environmental degradation and the free-rider problem
Limitations of the public goods framework
Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 10-19
Urban Development and the Environment
The ecology of urban slums Industrialization and urban air pollution
Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 10-22
Urban Development and the Environment
The ecology of urban slums Industrialization and urban air pollution Problems of congestion and the availability
of clean water and sanitation
Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 10-23
The Need for Policy Reform
The recognition that action to reduce environmental hazards has been insufficient is now widespread
However, budgets are limited Better pricing policies would improve matters Inclusion of women in the design of
environmental policy is important
Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 10-24
The Global Environment: Rain Forest Destruction and Greenhouse Gases
Many scientists are alarmed by recent evidence regarding ozone depletion and global warming
Economists also are concerned with the costs of global climate change
The solutions seem to involve both LDCs and industrialized countries
Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 10-25
Policy Options in Developing and Developed Countries
What LDCs can do– Proper resource pricing– Community involvement– Clearer property rights and resource ownership– Improved economic alternatives for the poor– Improved economic status of women– Industrial emissions abatement policies
Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 10-26
Policy Options in Developing and Developed Countries (cont’d)
How developed countries can help LDCs– Trade policies– Debt relief and debt for nature swaps– Development assistance
What developed countries can do– Emissions controls– R&D– Import restrictions
Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 10-28
Concepts for Review
Absorptive capacity Biomass fuels Clean technologies Common property
resource Consumer surplus Debt-for-nature swap Deforestation
Desertification Environmental
accounting Environmental capital Externality Free-rider problem Global warming Greenhouse gases
Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 10-29
Concepts for Review (cont’d)
Internalization Marginal cost Marginal net benefit Ozone depletion Pollution tax Present value Private costs Producer surplus Property rights
Public bad Public good Scarcity rent Social costs Soil erosion Sustainable development Sustainable national
income Total net benefit