The Quality of Growth: ch 4 1 SUSTAINING NATURAL CAPITAL The Quality of Growth: chapter 4 Maria...
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Transcript of The Quality of Growth: ch 4 1 SUSTAINING NATURAL CAPITAL The Quality of Growth: chapter 4 Maria...
The Quality of Growth: ch 4 1
SUSTAINING NATURAL CAPITAL
The Quality of Growth: chapter 4
Maria José Pacheco (Costa Rica)Marco Colombo (Italia)
The Quality of Growth: ch 4 2
Natural Capital, a Definition
The term natural capital encompasses: the sink functions, that is, air and
water as receiving media for human-generated pollution
source functions, that is, production based on forests, fisheries, and mineral ores.
The Quality of Growth: ch 4 3
Countries throughout the world have overexploited their forests, fisheries, and mineral wealth and polluted their water and air to accelerate short term economic growth Why natural capital tends to be
abused and overexploited? What measures can be taken to
correct the negative spiral of environmental decline?
The Core Problem
The Quality of Growth: ch 4 4
Key Problem
Economies that derive much of their income from natural resources cannot sustain growth by substituting physical capital accumulation for deteriorating natural capital
The Quality of Growth: ch 4 5
Environmental hotspots
1. Air pollution2. Waterborne diseases and water
pollution3. Overexploitation and degradation
of natural resources
1) AIR POLLUTIONActual or estimated concentration (ug/m3) of particulates (PM10) in urban areas. PM10 consists of fine particulate matter smaller than 10 microgrammes in size and is the primary cause of mortality
and morbidity from air pollution. Each city with population of 100,000 or more is identified separately.
Air pollution:
kills more than 2.7 million people every year
reduces economy output because of the loss of productive workdays
2) WATER POLLUTIONEstimated DALYs per 1000 people resulting from mortality and morbidity associated with diarrhoeal
diseases. DALY (Disability Adjusted Life Years) is a standard measure of health impact.
Water Pollution:
the poor are hurt the most,
especially children and agricultural
workers
The Quality of Growth: ch 4 10
3) Overexploitation and degradation of natural resources
Soil degradation is a problem everywhere (high costs)
Desertification Increases in the intensity and
frequency of floods and droughts
The Quality of Growth: ch 4 11
Significant Benefits of Environmental Action The present discounted cost of
providing everyone in China with access to clean water within 10 years is US$40 billion, and the present value of benefits is US$80 billion to US$100 billion (World Bank, 1997)
With payoffs so large, why do environmental degradation and destruction continue?
The Quality of Growth: ch 4 12
The main reason is that private returns on investment in environmental protection are significantly smaller than private costs (Dasgupta, 1994)
Policy distorsions reflecting undervaluation of the environment contribute to pollution and degradation (Dasgupta, 1994)
i.e. Energy subsidies to keep consumer prices low contribute to overconsumption and excessive pollution
The Quality of Growth: ch 4 13
Removing subsidies Imposing environmental taxes
Possible Solution
policy reforms can alleviate distortions and allow prices to reach their optimal
levelbut...
The Quality of Growth: ch 4 14
The Grow-Now-and-Clean-Up-Later
Mind Set Affects developing countries Examples of industrial countries
While air and water pollution levels appear to be reversible, their impacts on human well-being often are not
The Quality of Growth: ch 4 15
Growth
Natural Capital
Welfare
The Growth – Natural Capital – WelfareNexus
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A relationship between pollution and per capita income?
Per capita income
Environmental quality
12,000US$
The Quality of Growth: ch 4 17
The governement and the environment
Many countries have integrated environmental concerns and growth policies Examples:
Costa Rica: Rich biodiversity but high deforestation in the 80´s
Creation of a system of Forest Protection: Policies for the creation of a Market for
some environmental benefits = Succes on capturing carbon sequestration and watershed protection
The Quality of Growth: ch 4 18
China : Pollution Levy system Any firm whose effluent discharge exceeds a
legal standard must pay a levy (‡ tax) Result: With 10% of growth per year Decline in pollution per unit of output
Indonesia: Problems to monitor and enforce compliance to prevent pollution Development of the PROPER (Program for pollution control, evaluation and rating) = Receives pollution data, analyses and rates environmental performance then publishes the results
The Quality of Growth: ch 4 19
Europe: The Blue Flag campaign = program coordinated by the Foundation for Environmental Education in Europe Aim: Costal environment appreciation A beach or marina receives a Blue Flag if it meets a set of criteria set up by the Foundation( environmental quality, management of safety and environmental education and information)
Denmark, Greece and Spain
The Quality of Growth: ch 4 20
For greatest impact, the goverment should intervene selectively
The State Role
Streamline subsidies and implement environmental taxes
Diminish perverse subsidies
Promote Green and Pollution taxes
Move from central control to Partnerships
Ex: CAMPFIRE in Zimbabwe: creation of alliances between
provincial governments and private sectors and local inhabitants in
managing wildlife for profit and biodiversity conservation
The Quality of Growth: ch 4 21
Clarify Property rights, resource ownership and environmental liabilities
Ex: Forests in Japan
Fisheries in Turkey
Irrigation water in South India
Pastures in Suiss Alps, Himalayas and Andes
Improve governance and reduce corruption
Prevent misuse of public resources for private gain by
the political elite
HIGH PRIORITY MEASURE
The Quality of Growth: ch 4 22
Global Environmental issues must be confronted
Ex: Fossil fuel combustion (gases)+
Deforestation+
Farm Activities+
Coal mining+
Leakages from natural gaz
=Greenhouse Effect and Global Climate
Change
The Quality of Growth: ch 4 23
Natural tension between growth and environmentally healthy practices
Need of financial and technical assistance from the International Community Need of cooperation between rich and poor countries
The Quality of Growth: ch 4 24
Adress your concerns to:
The Global Environment Facility Organization that helps to solve environmental problems through collaboration between industrial and developping countries
The Quality of Growth: ch 4 25
Conclusion
In slow and fast growth countries: Several indicators of the quality of Natural
Capital tend to worsen In faster growing economies: More ressources available to invest on improvement of Natural Capital
”Grow-now-and-clean-up-later” approach
Growth with Sustainability of Natural capital
The Quality of Growth: ch 4 26
The role of the State is crucial in environmental management
Be selective and efficient in intervention
Global Environmental problems are huge but they offer the opportunity to adress nation problems with international cooperation
Development of transfer mecanisms for
resources to pay global externalities