Download Environmental and Resource Economics, lecture 1

ERE2: Sustainability
• The origins of the problem
– State of the environment
– Growth and the environment
– The environmental Kuznets curve
• Concepts of sustainability
– Definitions, meanings, conceptualisations
Last week
• Introduction into the discipline
• The three themes: efficiency, optimality
and sustainability
• Economy- environment interdependence
• The circular economy
The Quality of the Environment
• Pollution problems are not new to mankind
• Pollution control laws in Europe date back
from the Middle Age
• What is new is the magnitude of the
problem
– Increasing size of population
– Increasing per capita consumption of
environmental goods and services
Environmental Problems: Air
• Acidification: Fossil fuel burning and
intensive agriculture release acidifying
substances, that falls as acid rain
• Ozone layer: CFCs destroy the ozone layer,
increasing UV radiation
• Climate change: Fossil fuel burning releases
carbon dioxide, which changes climate
• Urban air quality: Traffic emits all sorts of
substances that affect health, buildings
and plants directly or indirectly
1980
1990
1995
China
GDP per capita
SO2 concentration
Particulate concentration
Per capita CO2 emissions
907
66
475
0.4
1783
107
413
0.6
3072
90
377
0.7
Iran
GDP per capita
SO2 concentration
Particulate concentration
Per capita CO2 emissions
5377
130
226
0.8
4843
165
261
0.9
5351
209
248
1.1
Japan
GDP per capita
SO2 concentration
Particulate concentration
Per capita CO2 emissions
15538
42
61
2.1
20794
19
22173
18
49
2.5
2.4
Environmental Problems: Water
• Eutrophication: Nitrates and phosphate
released by agriculture and industry alter
competition between species
• Toxic releases: Industry releases all sorts
of toxic substances
• Endocrine disruptors: Pseudo-hormones
have a wide-range of applications, alter the
behaviour and physiology of animals
• Depletion: Some countries already have too
little water, others are rapidly depleting
fossil sources
• Contamination by pathogens: drinking water
is not safe
Burkina Faso
India
Ghana
China
Brazil
Costa Rica
Mexico
Greece
U.K.
Denmark
GDP per
Population with Population with
Child
capita
safe water
sanitation
mortality rate
(US$)
(%)
(%)
(per 1000)
945
65
11
159
1256
74
14
131
1654
48
61
170
1901
74
87
43
5534
88
73
69
5758
92
96
16
7773
83
67
39
11490
98
98
11
17769
100
100
9
20135
100
100
9
Environmental Problems: Land
• Soil erosion: Reduced vegetation cover
makes that top soil gets washed away
• Desertification: Erosion, climate change,
overexploitation gradually turns once
fertile areas into deserts
• Salinisation: Overirrigation leads to the
build up of salt in the soil
• Waste: Increasingly large areas are used
for waste disposal
Environmental Problems:
Nature
• Loss of nature: More land for living,
industry, transport, agriculture and
recreation implies less land for nature
• Loss of species: Destruction of habitat,
overuse and other factors lead to local and
global extinctions and loss of biodiversity
• Exotic invasions: Deliberate and
unintentional transport of species imply
new forms of competition between species
Resource Problems
• Depletion of resources: Human extraction
of all sorts of minerals (copper, zinc) and
fossil material (oil, water) exceeds their
build up, implying that less and less of the
stuff is left in the ground for future
generations
• Waste: Human waste exceeds the
assimilating capacity of nature, leading not
only to accumulation but also to reduced
assimilation
Population Growth
• More people, more food, more energy, more
transport, more space, more everything
Projections
Western Europe
USA
SSAfrica
China
South Asia
1995
2050
447
297
558
1362
1240
479 (446-512)
356 (320-400)
1059 (965-1159)
1670 (1526-1826)
1845 (1737-1949)
Economic Growth
• Incomes have been growing at rates of up to
10% a year, although the average lies
somewhere between 1 and 2 per cent a year,
doubling incomes every 35-70 years
• Higher income implies higher consumption,
higher production, more resource
extraction, and more waste
• Improved technology, less constrained, more
aware, care more, status
Environmental Kuznets Curve
• Kuznets Curve: Inequality first increases, then
decreases with economic growth
• Environmental Kuznets Curve: Environmental
degradation first increases, then decreases
with economic growth
• Holds for some, not for all pollutants
• Local or global?
• Even if true, no reason for complacency!
Sustainability
John Stuart Mill (1857)
If the earth must lose that great portion
of its pleasantness which it ows to things
that the unlimited increases of wealth and
population would extirpate from it, for the
mere purpose of enabling it to support a
larger, but not a happier or better
population, I sincerely hope, for the sake
of posterity, that they will be content to
be stationary long before necessity
compels them to it.
Sustainability -2
Bruntland report (WCED, 1987)
Sustainable development is development
that meets the needs of the present
without compromising the ability of future
generations to meet their own needs
Wonderful, but what does this mean?
Sustainability =
• Weak sustainability
– Non-declining utility
– Non-declining production opportunities
– Non-declining yields of resource services
• Strong sustainability
– Non-declining natural capital stocks
– Ecosystem stability and resilience
• A social construct
• All that, plus efficiency and equity
Non-declining utility
•
•
•
•
•
•
•
Pezzey: utility should not fall
Hartwick: consumption should not fall
Solow: consumption should be constant
Whose utility, consumption?
What is utility, consumption?
What time scale?
Substitution is allowed
Consumption paths over time
Ct
C(4)
C(3)
C(2)
C(1)
C(5)
CMIN
C(6)
CSURV
Non-declining production
opportunities
• Solow, Page
• Q = Q(L, KH, KN)
• No assumption about what is consumption,
utility
• Production for whom?
• What is production?
• What time scale?
• Substitution is allowed
Non-declining natural capital
stocks
• Taken literally, this stops everything – no
substitution is allowed
• In practice, some substitution and
compensation must be allowed, but how
much?
• Is spatial substitution allowed? Or, at what
spatial scale?
• What stocks are maintained? Habitats,
species, genes?
• What to do with viruses and pests?
Existing or optimal capital stock?
C (forgone development value)
B, C
B (total economic value)
Ke
Kn*
Ke
Kn
Non-declining yields of
resource services
• Back to an anthropocentric viewpoint, or
not? Depends on services to whom? To
Homo Sapiens or to other species as well?
• What are services?
• What time scale?
• What spatial scale?
• Substitution is allowed, as long as the
service is generated
Ecosystem stability and
resilience
• An ecocentric viewpoint, or is it? Is
stability measured as stably serving human
needs?
• What is stability, resilience?
• What spatial and temporal scale?
• Are ecosystems naturally stable?
• Beyond a point, no substitution of manmade stocks and activities for natural
stocks and processes
A social construct
• Sustainability is, of course, defined as
society would like to define it
• Focuses on process rather than outcomes
or constraints
• Propose consensus building through
negotiations
• There is no objective definition possible
• Some argue that if only we get the
procedure of defining sustainability right ...