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The Environment in Introductory
Economics
• Three Global Development and Environment Institute textbooks:
• Microeconomics in Context
• Macroeconomics in Context
• Principles of Economics in Context
• Contextual Economics: Economic activity takes place within a
broader social and environmental context.
• Of 33 chapters in Principles text, 20 include some discussion of
environmental quality and/or natural resources.
• Four chapters have detailed environmental focus:
• The Economics of the Environment
• Common Property Resources and Public Goods
• Macroeconomic Measurement: Social and Environmental
Dimensions
• Growth and Sustainability in the Twenty-first Century
The Environment in Introductory
Economics
Source: Green, Tom. 2012. “Introductory Economics Textbooks,” Int Journal of Pluralism and Econ Education 3(2):189-223.
The Environment in Introductory
Economics
Source: Green, Tom. 2012. “Introductory Economics Textbooks,” Int Journal of Pluralism and Econ Education 3(2):189-223.
Chapter 0: Economics and Well-Being
• Define economics as: the study
of how people manage their
resources to meet their needs
and enhance their well-being
• 34 well-being concepts with
graphs (gender inequality,
subjective well-being, work
hours, environmental impacts)
• Define concept, summarize
results along with a simple
graph
Chapter 1: Economic Activity in Context
Traditional Texts
Economics in Context
Economic activities are: production,
distribution, and consumption.
Add a fourth essential activity:
resource maintenance.
The primary goal of economics is
efficiency.
Efficiency is an intermediate goal. Final
goals include happiness, security, a sense of
meaning, fairness, and ecological balance.
Production possibilities frontier
defines tradeoffs.
Resource maintenance is critical in
balancing present versus future production.
Circular flow model with households Contextual model embeds economic
and businesses as main economic
activity within a broader social and
agents.
environmental context.
Economic Activity in Context
Key Environmental Concepts
Chapter
Environmental Topics
Consumption and the
Consumer Society
Section on “Consumption in an Environmental Context”:
ecological footprint, green consumerism, ecolabeling.
Taxes and Tax Policy
Discussion of environmental taxes, including carbon
taxes
Capital Stocks and
Section on “Natural Capital”: renewable vs.
Resource Maintenance nonrenewable resources, sustainable socioeconomic
system
Introduction to
Macroeconomics
The Structure of the
U.S. Economy
Section on “Sustainability”: restorative development,
precautionary principle, correlate CO2 growth to
economic growth
Discussions of agriculture, water issues, the energy
system
The Economics of the Environment
Figure12.2:
12.8:Internalizing
Welfare Analysis
of a Externality
Negative
Figure
a Negative
Pigovian
Tax
More detailed
DetailedExternality,
welfare
welfarewith
analysis
analysis
of
ofaexternalities
externalities
awith
Pigovian
Tax
The Economics of the Environment
Section Title
Topics
Valuing the
Environment
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Environmental
Policies in Practice
• Discussion of four main environmental policies:
standards, technology-based approaches, taxes,
tradable permits
• Summary of major environmental regulations
• Does environmental protection reduce economic
welfare and lead to job losses?
Difference between economic and intrinsic value
Importance of nonuse values
Discussion of environmental valuation techniques
Uses and limitations of cost-benefit analysis
Discussion of precautionary principle
Common Property Resources and
Public Goods
Detailed analysis of common property resources and public goods,
including discussion
“Tragedy
the Commons”
Elinor Ostrom’s
Figure 13.2:
CommonofProperty
Model of aand
Fishery
work.
Common Property Resources and
Public Goods
Entire section on climate change – 6 pages!
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Summary of scientific consensus
Climate change data and projections
Overview of the Stern Review
Discussion of climate policies in practice
including carbon taxes in India and Canada, the
EU emissions trading scheme, and the Kyoto
Protocol
• Box on the Earth Atmospheric Trust
Macroeconomic Measurement:
Environmental and Social Dimensions
• Presentation of alternative indicators with
environmental component, including Genuine
Progress Indicator, Better Life Index, and Happy
Planet Index
• Section on “Accounting for the Environment”:
adjusting GDP for natural capital depreciation,
valuing natural capital, environmental accounting
in China
Growth and Sustainability in the
Twenty-First Century
Section on “Macroeconomics and Ecological Sustainability”
• Overview of major environmental issues including population, resource
depletion, and waste
• Discussion of the race between technology and resource depletion
Another climate change section! More material on science, economics and policies.
Section on “Economic Growth and the Environment”
• Environmental Kuznets Curves
• Policies for sustainable development: green taxes, eliminating fossil fuel
subsidies, and debt-for-nature swaps
• Sustainable consumption and investment
Final section on “Are Stabilization and Sustainability in Conflict?”
• Daly’s steady-state economy
• Harris’ “Green Keynesian” policies
• Victor’s no-growth scenario for the Canadian economy