Week 19 Flashcards
(15 cards)
Climate change & economic growth
• Economic growth has involved environmental degradation
• Climate change is the most discussed aspect but is part of broader environmental harm, including:
Deforestation:
• Central America: 40% loss (1950–1980)
• Africa: 23% loss (1950–1980)
• Species extinction: 1000x natural rate (Pimm et al., 2014)
• Soil deterioration, fisheries depletion, chemical pollution
Sustainable development
• Introduced by Brundtland Commission (1987)
• Reconciling economic growth with environmental protection
Environmental Kuznets Curve (EKC)
• Suggests environmental damage increases in early development, then decreases as income rises
Problems:
• Pollution outsourcing/displacement
• Pollution haven hypothesis (relaxing laws to attract dirty industries)
• Assumes transparent social preferences, no corruption
• No time frame for turning point—may be too late
IPCC (2007 data)
• Global energy efficiency gains (1970–2004):
• Reduced emissions by 33%
But:
• Increased income = +77% emissions
• Population growth = +69% emissions
→ Efficiency gains were offset by consumption & population growth
IPCC target:
• Limit global temperature rise to no more than 2°C (vs pre-industrial)
• Carbon cap to stay under 550 ppm atmospheric CO2
Ecological Economics
View: Environment contains the economy (not vice versa)
• Pessimistic about reconciling growth and sustainability
• Prioritises finite resource limits and physical laws
Key concepts:
• Environmental sustainability =
• Non-renewables used < natural regeneration
• No irreversible pollution
• Avoid tipping points (Lenton, 2012)
Policy implications:
• Strong regulation, cultural shifts
• Restrict consumption and production
• Ban ads, reduce working time
Environmental Economics
View: Environment is part of the market system
• Optimistic: believes tech innovation can substitute for natural resources
• e.g., Coal substituted for wood (C19th), Pesticides reduce land use
Lower sustainability threshold:
• Economy is sustainable if total capital (natural + man-made) passed to next generation is ≥ current
Criticisms:
• Can all natural resources be substituted?
• Ethical limits (e.g. leopards, Maldives, biodiversity)
Legislation
• Direct bans and regulations
• e.g. UK Clean Air Act, chemical controls, green belts
Taxation
• Internalises negative externalities
• E.g. Polluting factories taxed, money used to clean nearby area
• Doesn’t stop pollution, but charges for it
Market-Based Approaches
• Assign monetary value to environmental goods
• Promote ‘ecosystem services’ valuation (e.g. EU’s ‘Measuring Wealth’)
CAP
• IPCC guidance: global warming must be kept below 2°C
• Max atmospheric CO2 = 550 ppm
• The “cap” creates artificial scarcity, allowing market dynamics
TRADE
• Governments create pollution credits
• Can be bought/sold between companies
• Aim: transfer pollution to where it’s cheapest to produce
EU Emissions Trading System (ETS)
• Created in 2005
• Makes up 80% of global carbon market volume
• Goal: meet CO2 reduction targets
• Business-friendly alternative to tax or regulation
Problems with Carbon Trading
• Emissions still rising
• Focuses on relative (not absolute) reductions
• Industry lobbies for generous allowances
• Not global – limited sectors/countries covered
