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Ch 2 Environmental Ethics and Economics: Values and Choices

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1 Ch 2 Environmental Ethics and Economics: Values and Choices
Part 1: Foundations of Environmental Science PowerPoint® Slides prepared by Jay Withgott and Heidi Marcum Copyright © 2008 Pearson Education, Inc., publishing as Benjamin Cummings

2 This lecture will help you understand:
Culture and worldviews Environmental ethics Classical and neoclassical economics Economic growth, economic health, and sustainability Environmental and ecological economics

3 Central Case: The Mirrar Clan Confronts the Jabiluka Uranium Mine
Uranium deposits in Australia often occur on sacred Aboriginal land The Mirrar oppose the mine for cultural, religious, ethical, health, and economic reasons The mine will not be developed unless the Mirrar agree

4 Ethics and economics Both disciplines deal with what we value
Our values affect our environmental decisions and actions

5 Culture and worldview Our relationship with the environment depends on assessments of costs and benefits Culture and worldview also affects this relationship Culture = knowledge, beliefs, values, and learned ways of life shared by a group of people Worldview = a person’s or group’s beliefs about the meaning, purpose, operation, and essence of the world Culture and worldview affect our perception of the environment and environmental problems

6 Worldviews differ among people
Different worldviews result in different perceptions Aborigines saw the negative environmental impacts of the Jabiluka mine Others saw jobs, income, and energy from the mine

7 Many factors shape worldviews
Religions Communities Political ideology Economics Individual interests Vested interest = an individual with strong interests in the outcome of a decision that results in gain or loss for that individual

8 Ethics Ethics = the study of good and bad, right and wrong
Relativists = ethics varies with social context Universalists = right and wrong remains the same across cultures and situations Ethical standards = criteria that help differentiate right from wrong Classical standard = virtue The golden rule Utility = something right produces the most benefits for the most people

9 Environmental ethics Environmental ethics = application of ethical standards to relationships between human and non-human entities Hard to resolve; depends on the person’s ethical standards Depends on the person’s domain of ethical concern Should we conserve resources for future generations? Is is OK to destroy a forest to create jobs for people? Should humans drive other species to extinction? Is it OK for some communities to be exposed to excess pollution?

10 We have expanded our ethical consideration
To include animals, communities, nature

11 Expanding ethical concern
Why have we expanded our ethical concerns? Economic prosperity: more leisure time, less anxieties Science: interconnection of all organisms Non-western cultures often have broader ethical domains Three perspectives in Western ethics Anthropocentrism = only humans have rights Biocentrism = certain living things also have value Ecocentrism = whole ecological systems have value Holistic perspective, stresses preserving connections

12 Western ethical expansion

13 History of environmental ethics
People have questioned our relationship with the environment for centuries Christianity’s attitude towards the environment Anthropocentric hostility, or Stewardship? The Industrial Revolution increased consumption and pollution People no longer appreciated nature Transcendentalism = nature is a manifestation of the divine Ralph Waldo Emerson, Henry David Thoreau

14 John Rushkin ( ) “little more than laboratoires for the distillation into heaven of venomous smokes and smells”

15 The preservation ethic- pristine, unaltered state
Unspoiled nature should be protected for its own inherent value John Muir ( ) (right, with President Roosevelt at Yosemite National Park) had an ecocentric viewpoint

16 The conservation ethic
Use natural resources wisely for the greatest good for the most people Gifford Pinchot ( ) had an anthropocentric viewpoint

17 The land ethic Healthy ecological systems depend on protecting all parts Aldo Leopold ( ), believed the land ethic changes the role of people from conquerors of the land to citizens of it

18 Deep ecology, ecofeminism, and justice
Deep ecology = humans are inseparable from nature Since all living things have equal value, they should be protected Ecofeminism = male-dominated societies have degraded women and the environment through fear and hate Female worldview = cooperation Environmental justice = the fair and equitable treatment of all people regarding environmental issues Wealthy nations dump hazardous waste in poorer nations with uninformed residents

19 Environmental justice (EJ)
The poor and minorities are exposed to more pollution, hazards, and environmental degradation 75% of toxic waste landfills in the southeastern U.S. are in communities with higher racial minorities

20 Environmental justice and Native Americans
From 1948 to the 1960s, Navajo miners were not warned of radiation risks, nor provided protection by the industry or the U.S. government

21 Economics Friction occurs between people’s ethical and economic impulses Is there a trade-off between economics and the environment? Generally, environmental protection is good for the economy Economics studies how people use resources to provide goods and services in the face of demand Most environmental and economic problems are linked Root “oikos” gave rise to both ecology and economics

22 Types of modern economies
Economy = a social system that converts resources into Goods: manufactured materials that are bought, and Services: work done for others as a form of business Subsistence economy = people get their daily needs directly from nature; they do not purchase or trade Capitalist market economy = buyers and sellers interact to determine prices and production of goods and services Centrally planned economy = the government determines how to allocate resources Mixed economy = governments intervene to some extent

23 Government intervenes in a market economy
Even in capitalist market economies, governments intervene to: • Eliminate unfair advantages • Provide social services • Provide safety nets • Manage the commons • Mitigate pollution

24 Conventional view of economics
Conventional economics focuses on production and consumption Ignores the environment The environment is an external “factor of production”

25 Environmental view of economics
Human economies exist within, and depend on, the environment Without natural resources, there would be no economies

26 Environmental systems support economies
Ecosystem services (Table 2.2) = essential services support the life that makes economic activities possible *Soil formation *Pollination *Water purification *Nutrient cycling *Climate regulation *Waste treatment Economic activities affect the environment Deplete natural resources Produce too much pollution

27 Classical economics Competition between people free to pursue their own economic self-interest will benefit society as a whole (Adam Smith, ) The market is guided by an “invisible hand” This idea is a pillar of free-market thought today It is also blamed for economic inequality Laissez-Faire (let people do as they choose) Rich vs. poor Critics think that market capitalism should be restricted by government

28 Neoclassical economics
Examines the psychological factors underlying consumer choices Market prices are explained in terms of consumer preferences Buyers vs. sellers The “right” quantities of a product are produced The market favors equilibrium between supply and demand

29 Marginal benefit and cost curves
Cost-benefit analysis = the costs of a proposed action are compared to the benefits that result from the action If benefits > costs: pursue the action Not all costs and benefits can be identified Marginal benefit and cost curves determine an “optimal” level of resource use or pollution mitigation

30 Neoclassical economics
Enormous wealth and jobs are generated Environmental problems are also created Assumptions of neoclassical economics: Resources are infinite or substitutable Costs and benefits are internal Long-term effects are discounted Growth is good

31 Assumption: Resources are infinite
Economic models treat resources as substitutable and interchangeable A replacement resource will be found But, Earth’s resources are limited Nonrenewable resources can be depleted Renewable resources can also be depleted For example, Easter Islanders destroyed their forests

32 Assumption: Costs and benefits are internal
Costs and benefits are experienced by the buyer and seller alone Do not affect other members of the society Pricing ignores social, environmental or economic costs Externalities = costs or benefits involving people other than the buyer or seller External costs = borne by someone not involved in a transaction Human health problems Resource depletion Hard to account for and eliminate How do you assign monetary value to illness?

33 Assumptions: Long-term effects are discounted and growth is good
A future event counts less than a present one Discounting = short-term costs and benefits are more important than long-term costs and benefits Policymakers ignore long term consequences of our actions Discourages attention to resource depletion and pollution Economic growth is necessary to maintain employment and social order Promoting economic growth creates opportunities for poor to become wealthier Progress is measured by economic growth

34 Is the growth paradigm good for us?
“More and bigger is better” The dramatic rise in per-person consumption has severe environmental consequences

35 Is economic growth sustainable?
Affluenza = material goods do not always bring contentment Uncontrolled economic growth is unsustainable Technology can push back limits, but not forever More efficient resource extraction and food production perpetuates the illusion that resources are unlimited Many economists believe technology can solve everything

36 Other types of economists
Ecological economists = civilizations cannot overcome environmental limitations Steady state economies should mirror natural ecological systems Calls for revolution Environmental economists = unsustainable economies have high population growth and inefficient resource use Modify neoclassical economics to increase efficiency Calls for reform

37 A steady state economy As resources became harder to find, economic growth slows and stabilizes (John Stuart Mill, ) We must rethink our assumptions and change our way of economic transactions This does not mean a lower quality of life Economies are measured in various ways Gross Domestic Product (GDP) = total monetary value of final goods and services produced Does not account for nonmarket values Pollution increases GDP

38 In the U.S., GDP has risen greatly, but not GPI
GPI: An alternative to the GDP (introduced in 1995 by Non-profit Redefining Progress) Genuine Progress Indicator (GPI) = differentiates between desirable and undesirable economic activity Positive contributions (i.e. volunteer work) not paid for with money are added to economic activity Negative impacts (crime, pollution) are subtracted In the U.S., GDP has risen greatly, but not GPI

39 More “green accounting” indicators
Net Economic Welfare (NEW) = adjusts GDP by adding the value of leisure time, while deducting environmental degradation Sustainable Economic Welfare (ISEW) = based on income, wealth distribution, resource depletion These indicators give a more accurate indication of a nation’s welfare Very controversial, hard to practice. China introduced green accounting 2006 then repressed the 2007 report

40 Valuing ecosystems goods and services
Our society mistreats the very systems that sustain it The market ignores/undervalues ecosystem values Nonmarket values = values not included in the price of a good or service


42 Assigning value to ecosystem services
Contingent valuation = uses surveys to determine how much people are willing to pay to protect or restore a resource Measures expressed preferences But, since people don’t really pay, they may overinflate values Revealed preferences = revealed by actual behavior Time, money, effort people spend Measuring the actual cost of restoring natural systems The global value of all ecosystem services = $42 trillion!

43 Markets can fail Market failure = markets do not account for the environment’s positive impacts Markets do not reflect the negative effects of activities on the environment or people (external costs) Government intervention counters market failure Laws and regulations Green taxes = penalize harmful activities Economic incentives to promote conservation and sustainability

44 Ecolabeling addresses market failures
The market can be used to counter market failure Create markets in permits Ecolabeling = tells consumers which brands use sustainable processes A powerful incentive for businesses to switch to better processes “Dolphin safe” tuna Socially responsible investing in sustainable companies

45 Corporations are responding to concerns
Industries, businesses, and corporations can make money by “greening” their operations Local sustainably oriented businesses are being started Large corporations are riding the “green wave” of consumer preference for sustainable products Nike, Gap Be careful of greenwashing, where consumers are misled into thinking companies are acting sustainably

46 Conclusion Recent developments have brought economic approaches to bear on environmental protection and conservation Environmental ethics has expanded people’s ethical considerations Economic welfare can be enhanced without growth, resulting in economic health and environmental quality

47 QUESTION: Review An ecocentric worldview would consider the impact of an action on… ? a) Humans only b) Animals only c) Plants only d) All living things e) All nonliving things Answer: d

48 QUESTION: Review Which ethic holds that healthy ecosystems depend on the protection of all their parts? a) Preservation ethic b) Land ethic c) Conservation ethic d) Deep ecology e) Biocentrism Answer: b

49 QUESTION: Review Which of the following is an ecosystem service? a) Water purification in wetlands b) Climate regulation in the atmosphere c) Nutrient cycling in ecosystems d) Waste treatment by bacteria e) All of the above Answer: e

50 QUESTION: Review Which is NOT an assumption of neoclassical economics that can lead to environmental degradation? a) Resources are limited b) Long-term effects are downplayed c) All costs and benefits are experienced by the buyer and seller alone d) Growth is good Answer: a

51 QUESTION: Review Which of the following statements would be spoken by an ecological economist? a) The current economic system is working fine b) The current economic system simply needs to be fine-tuned c) The current economic system is broken and a new one needs to be developed d) Economic systems never work Answer: c

52 QUESTION: Interpreting Graphs and Data
Market equilibrium, which sets the price of a product, is reached … a) When supply exceeds demand b) When demand exceeds supply c) By demand when quantity is low, and supply when quantity is high d) When supply equals demand Answer: d

53 QUESTION: Interpreting Graphs and Data
Which conclusion can you draw from this graph? a) GDP has not really increased since 1950 b) Although we are spending more money, our lives are not much better c) We are spending less money, and our lives are much better d) The GPI is not as accurate as GDP Answer: b

54 QUESTION: Viewpoints Think of an issue in your community that could pit environmentalists against economic development. What do you think should prevail: environmental protection or economic development? a) Economic growth; we need the jobs b) Environmental protection; we need the environment Both; a compromise must be reached Whatever costs the taxpayers the least Answer: any

55 QUESTION: Viewpoints What entities do you include in your domain of ethical concern? a) Humans only b) Humans and pets Humans, pets, and other animals Humans, pets, other animals, and nature Answer: any

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