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