1.2 Economic growth, the environment and sustainability Flashcards
(13 cards)
IPAT identity
I = PxAxT
I Impact (mass/volume)=
P population size X
A per capita affluence (GDP/capita) X
T technology (amount wasted/generated per unit of production )
- three multiplicative components: population, affluence and technology
- acccounting identitiy
the demographic transition
stage 1: Low income economy
high birth rates, high death rates
stage 2: rising economy
falling death rate, large population increase
nutrition and public health measures improve
stage 3:
birth rate falls
increased costs, lower benefits in family size, improved status of women, …
stage 4: high income economy
equal low birth and death rates; constant population size
The Environmental Kuznets Curve (EKC)
e = B0y - B1y^2
B1 sufficiently small; inverted U form
two stages
- early stage of development
- increased use of resources leads to more pollution and waste
- agricultural to industrial economy
- later stages of development
- elasticity, techique effect, market mechanisms, regulations, …
- industrial to service economy
Economic development will eventually lead to a decrease in overall levels of environmental degradation (IN THE END)
elasticity of environmental quality demand
(later stages of EKC curve)
If people are better of they are more able and willing to pay for environmental quality improvements
technique effect
(later stages of EKC curve)
wealthier nation spend more on R&D
- dirty/ resource intensive replaced by newer and cleaner technologies
market mechanisms
(later stages of EKC curve)
increased scarcity, drives up the prices, lowers consumtion in favor of preservation
sustainable development
- needs for CURRENT and FUTURE generations
- species and ecosystems should be used in ways that allow them to regenerate themselves for practical purposes indefinitely
- reducing absolute poverty of the world’s poor
- minimize resource depletion, environmental degradation, cultural disruption and social instability
- increases in consumption levels of the worlds
- reducing humanities ecological footprint
Weak sustainability (WS)
- constant capital rule (CCR)
- substitution of all types of capital is possible (trade offs are possible)
- if a capital declines an adequate investment should me made in other forms of capital
dk/dt >= 0
strong sustainability (SS)
= substitution of natural capital by another type of capital is impossible
dk/dt >=0 AND dKn/dt >=0
weak sustainability + natural capital should not decline
- some forms of capital have no substitute
critique
- do we have to have to replace all the natural capital
- is this always possible
Green Net National Product (Green GNP)
= adjustment to the GDP; potential for future consumption
- max level of consumption that was sustainable in any year
- rising GGNP, indicator of sustainability
- GDP could lead to degradation, this cost is taken into account; correction for loss of natural capital
Green GNP = C + Sg (Genuine savings)
GNP
= gross national product; the value of all output of the economy
- sum of the value created in all industries
- no accounting for environment
Y = C + S (consumption + savings)
- estimate of S is to high
Genuine Savings
Sg = [S-dKm - r(R-G) - p(E-A)]
- decline in capital stock (wearing out) [dKm]
- level of extracting of resources [r(R-G)]
- pollution or damage costs [p(E-A)]
A lot of information is required, not easy to share, a lot of science needed
GPI
Genuine progress index
- correction for more components as Green GDP (24 components)
- also positive components included
