CHAPTER 17
ENVIRONMENTAL ECONOMICS, POLITICS, AND WORLDVIEWS
Outline
17-1 How are economic systems related to the biosphere?
A. Not all market systems are free-market systems
2. Market-based economic system—buyers and sellers interact in markets to make economic
decisions about how goods and services are produced, distributed, and consumed.
a. In a free-market economic system, all economic decisions are governed solely by the
competitive interactions of supply (the amount of a good or service that is available), demand
3. Three types of capital, or resources, are used to produce goods and services.
a. Natural capital includes resources and services produced by the earth’s natural processes,
which support all economies and all life.
B. Economists disagree over the importance of natural capital and the sustainability of economic growth.
1. Economic growth for a city, state, country, or company is an increase in its capacity to provide
goods and services to people.
3. High-throughput economies attempt to boost economic growth by increasing the flow of natural
matter and energy resources through their economic systems to produce more goods and services.
4. Neoclassical economists, following the ideas of Alfred Marshall (1842–1924) and Milton
5. Ecological economists such as Herman Daly and Robert Costanza believe that:
a. There are no substitutes for many vital natural resources such as air, water, fertile soil,
and biodiversity, or for nature’s free ecological services such as climate control, air and
6. The models of ecological economists are built on three major assumptions.
a. Resources are limited and we should not waste them, and there are no substitutes for
most types of natural capital.
7. Many environmental economists argue that some forms of economic growth are not sustainable
and should be discouraged through fine-tuning existing economic systems and tools.
17-2 How can we use economic tools to deal with environmental problems?
A. Most things cost more than we might think.
1. The market price, or direct price, that we pay for something does not include most of the
2. Hidden costs are the indirect or external costs that can have short- and long-term harmful
effects on other people, on future generations, and on the earth’s life-support systems.
3. Analysts say that full-cost pricing (including harmful environmental costs in the
market prices of goods and services) would:
4. Phase in shift to full-cost pricing so that environmentally harmful businesses would
5. Resistance to full-cost pricing.
a. Opposition from producers of harmful and wasteful products and services who
would have to charge more for them and might go out of business.
b. Difficulty estimating environmental and health costs and how they might change in
the future.
B. Environmental economic indicators could help us reduce our environmental impact
2. The per capita GDP is the GDP divided by the country’s total population at midyear.
3. GDP provides a standardized, useful method for measuring and comparing the economic
4. Environmental and ecological economists and environmental scientists call for new
indicators—called environmental indicators—to help monitor environmental quality and
human well-being.
a. Genuine progress indicator (GPI) is the GDP plus the estimated value of beneficial
transactions that meet basic needs, but in which no money changes hands, minus the
C. We can reward environmentally sustainable businesses.
2. Perverse subsidies and tax breaks enable businesses to operate in such a way that they do
damage to the environment or to human health, such as:
3. Companies spend considerable money lobbying, or trying to influence governments to
continue and even increase their subsidies.
5. Governments could phase in environmentally beneficial subsidies and tax breaks for:
a. Pollution prevention.
b. Ecocity development.
D. Tax pollution and wastes instead of wages and profits.
1. Use green taxes, or ecotaxes, to help include many of the harmful environmental and health
costs of production and consumption in market prices.
2. To many analysts, the tax system in most countries is backward because it discourages what
3. Three requirements for successful implementation of green taxes.
a. Phased in over 10–20 years to allow businesses to plan for the future.
4. Polls indicate that once such tax shifting is explained to voters, 70% of European and U.S.
voters support shifting toward a green tax.
5. In some countries in Europe, green taxes have helped to create jobs, lower taxes on wages,
and increased use of renewable energy resources.
E. Environmental laws and regulations can discourage or encourage innovation.
1. Environmental regulation is a form of government intervention in the marketplace that is
2. Laws that:
3. Currently most environmental laws enforced through a command-and-control approach which
often concentrates on cleanup instead of prevention.
5. Innovation-friendly environmental regulation sets goals and frees industries to meet them in
any way that works, and allows enough time for innovation.
F. Using the marketplace to reduce pollution and resource waste.
1. One incentive-based regulation system allows the government to set acceptable pollution/use
2. The United States has used this cap-and-trade approach to reduce the emissions of sulfur
dioxide and several other air pollutants.
3. Effectiveness depends on how high or low the initial cap is set and on the rate at which the
cap is reduced to encourage further innovation.
G. Reducing pollution and resource waste by selling services instead of things.
1. A proposed new economic model would provide profits while greatly reducing resource use,
pollution, and waste for a number of goods by shifting from the current material-flow
economy to a service-flow economy.
Instructor’s Manual for Environmental Science, 15th edition
H. Reducing poverty can help us deal with environmental problems.
a. 1.4 billion people struggle to survive on an income equivalent to less than $1.25 a day.
b. Poverty has numerous harmful health and environmental effects.
c. Reducing poverty benefits individuals, economies, and the environment and helps to slow
population growth.
d. Suggestions to reduce poverty and its harmful effects:
i. Mount a massive global effort to combat malnutrition and the infectious diseases that kill
millions of people prematurely.
ii. Provide primary school education for all children and for the world’s nearly 800 million
illiterate adults.
their income.
e. INDIVIDUALS MATTER: Muhammad Yunus—A Pioneer in Microlending.
i. Most of the world’s poor people want to work and earn enough to climb out of poverty
but are unable to obtain loans to start farms or businesses.
ii. Microlending, or microfinance, has helped a number of people living in poverty.
Economist Muhammad Yunus started the Grameen (Village) Bank in Bangladesh which
I. The Millennium Development Goals present challenges.
1. Millennium Development Goals included sharply reducing hunger and poverty, improving
2. More-developed countries agreed to devote 0.7% of their annual national income toward
achieving the goals.
3. By 2009, only five countries—Denmark, Luxembourg, Sweden, Norway, and the
Netherlands—had donated what they had promised; the United States—the world’s richest
country—gives only 0.16% of its national income to help poor countries.
J. We can use lessons from nature to shift to more environmentally sustainable economies.
2. The best long-term solution to our environmental and resource problems is to shift from a
high-throughput (high-waste) to a more sustainable low-throughput (low-waste) economy.
3. Make this transition by:
a. reusing and recycling most nonrenewable matter resources
4. Simple golden rule: “Leave the world better than you found it, take no more than you need,
5. Large numbers of new green jobs, which are devoted to improving environmental quality,
6. INDIVIDUALS MATTER; Ray Anderson
a. Ray Anderson is the founder of Interface, a company based in Atlanta, Georgia (USA)
that is the company is the world’s largest commercial manufacturer of carpet tiles.
b. Anderson changed the way he viewed the world—and his business—after reading Paul
Hawken’s book The Ecology of Commerce. In 1994, he announced plans to develop the
nation’s first totally sustainable green corporation. Since then, he has implemented
hundreds of projects with goals of producing zero waste, greatly reducing energy use,
7-3 How can we implement more sustainable and just environmental policies?
A. Dealing with environmental problems in democracies is not easy.
2. Politics is the process by which individuals and groups try to influence or control the policies and
actions of governments at local, state, national, and international levels.
4. In a constitutional democracy, a constitution provides the basis of government authority, and, in
most cases, limits government power by mandating free elections and guaranteeing free speech.
5. Political institutions in most constitutional democracies allow gradual change to ensure economic
and political stability.
6. The major function of government in democratic countries is to develop and implement policies
for dealing with various issues.
7. Pressures from many competing special-interest groups may influence policy.
a. Corporations are profit-making organizations.
B. Certain principles can guide us in making environmental policy.
1. Several principles designed to minimize environmental harm:
a. The humility principle: Our understanding of nature and how our actions affect nature is quite
limited.
b. The reversibility principle: Try not to make a decision that cannot be reversed later if the
decision turns out to be wrong.
Instructor’s Manual for Environmental Science, 15th edition
2. CASE STUDY: Managing Public Lands in the United States—Politics in Action.
a. U.S. has the most land for public use, resource extraction, enjoyment, or wildlife habitat.
b. About three-fourths of this federal public land is in Alaska and another fifth is in the western
states.
c. Some federal public lands are used for many purposes.
iv. The National Park System, managed by the National Park Service (NPS), includes 58
major parks and 331 national recreation areas, monuments, memorials, battlefields,
historic sites, parkways, trails, rivers, seashores, and lakeshores. Only camping, hiking,
d. Most conservation biologists, environmental economists, and many free-market economists
believe that four principles should govern use of public lands:
i. They should be used primarily for protecting biodiversity, wildlife habitats, and
ecosystems.
ii. No one should receive government subsidies or tax breaks for using or extracting
e. Opposition to these ideas comes from developers, resource extractors, many economists, and
many citizens who tend to view public lands in terms of their usefulness in providing mineral,
timber, and other resources and increasing short-term economic growth.
f. Five proposals made to the U.S. Congress by developers and resource extractors:
i. Sell public lands or their resources to corporations or individuals, usually at proposed
prices that are less than market value, or turn over their management to state and local
governments.
Chapter 17: Environmental Economics, Politics, and Worldviews
C. Individuals can influence environmental policy.
1. History shows that significant change usually comes from the bottom up, when individuals join
together to bring about change.
2. Without grassroots political action by millions of individual citizens and organized citizen groups:
3. At a fundamental level, all politics is local; what we do to improve environmental quality in our
own neighborhoods, schools, and work places has national and global implications.
5. Environmental leaders can make a big difference.
a. Lead by example, using our own lifestyle and values to show others that change is possible
and can be beneficial.
3. INDIVIDUALS MATTER: Denis Hayes—A Practical Environmental Visionary
a. Denis Hayes was enrolled in Harvard University at the same time that Senator Gaylord
Nelson of the U.S. state of Wisconsin was organizing environmental teach-ins on college
4. U.S. environmental laws and regulations have been under attack.
a. U.S. Congress enacted a number of important federal environmental and resource protection
laws, most of them in the 1970s.
b. U.S. environmental laws have been highly effective but since 1980 a strong campaign to
weaken or repeal them, such as:
i. Some corporate leaders and other powerful people who see them as threats to their
profits, wealth, and power.
ii. Citizens who see them as threats to their private property rights and jobs.
D. Citizen environmental groups play important roles.
1. The spearheads of the global conservation, environmental, and environmental justice movements
are the tens of thousands of nonprofit NGOs working at the international, national, state, and local
levels.
a. Grassroots groups with just a few members.
b. Mainline organizations like the World Wildlife Fund (WWF), a 5-million-member global
Instructor’s Manual for Environmental Science, 15th edition
E. Students and educational institutions can play important environmental roles.
1. Since the mid-1980s, there has been a boom in environmental awareness on U.S. college
campuses and in public and private schools across the United States.
2. Students, faculty, and administration work together to make environmental improvements.
3. CASE STUDY: Greening American Campuses.
a. Changes on campuses include:
i. Implemented or improved recycling programs.
ii. University food services buying more food from local organic farms.
iii. Shifting from fossil fuels to renewable energy.
iv. Improving energy efficiency.
v. Reducing dependence on cars.
F. Environmental security is as important as military and economic security.
2. Serious new threats to global and national military and economic security are the potential for
3. There is an increase in the number of failing states where governments can no longer provide
4. The United Nations houses a large family of influential organizations including:
a. the U.N. Environment Programme (UNEP).
5. Other organizations that make or influence environmental decisions are:
6. These and other international organizations have played important roles in:
a. Expanding global understanding of environmental issues;
17-4 What are some major environmental worldviews?
A. There are a variety of environmental worldviews.
1. People disagree on how serious various environmental problems are as well as on what we should
do about them.
2. Environmental ethics—what one believes about what is right and what is wrong in our behavior
toward the environment.
3. People with widely differing environmental worldviews can take the same data, be logically
consistent, and arrive at quite different conclusions.
B. Most people have human-centered environmental worldviews.
1. The planetary management worldview sees humans as the planet’s most important and dominant
species, and we can and should manage the earth mostly for our own benefit.
2. The stewardship worldview assumes that we have an ethical responsibility to be caring and
3. Human-centered worldviews assume that we have enough knowledge to be effective managers or
stewards of the earth.
C. Some environmental worldviews are life-centered and others are earth-centered.
2. Life-centered worldview states that we have an ethical responsibility to avoid hastening the
extinction of any species through our activities.
3. The earth-centered environmental worldview is devoted to preserving the earth’s biodiversity and
the functioning of its life-support systems for the benefit of humans and other forms of life, now
4. The environmental wisdom worldview sees us as part of—not apart from—the community of life
and the ecological processes that sustain all life.
a. We should work with the earth to promote environmental sustainability instead of trying to
D. SCIENCE FOCUS: Biosphere 2—A Lesson in Humility.
1. In 1991, eight scientists were sealed inside Biosphere 2, a $200 million glass and steel enclosure
2. Biosphere 2 was designed to mimic the earth’s natural chemical recycling systems. Sunlight and
3. Despite many problems, the facility’s waste and wastewater were recycled. With much hard work,
4. The conclusion from the project was that “No one yet knows how to engineer systems that provide
humans with life-supporting services that natural ecosystems provide for free.”
17-5 How can we live more sustainably?
A. We can become more environmentally literate.
1. Increase literacy by understanding three important ideas:
B. We can learn from the earth.
2. Not simply a lack of environmental literacy but also
us.
4. Humans have more power than ever before to disrupt nature.
6. The healing of the earth and the healing of the human spirit are one and the same.
7. CONNECTIONS: Disconnecting from Technology and Reconnecting with Nature
a. Many of us who venture into the natural world want to carry our GPS units, cell phones, I-
pods, and other technological marvels that keep us in touch with the world we have
C. We can live more simply and lightly on the earth.
2. Ethical guidelines for achieving more sustainable and compassionate societies by converting
environmental concerns, literacy, and wisdom into environmentally responsible actions:
a. Use the three principles of sustainability to mimic the ways in which nature sustains itself.
b. Do not deplete or degrade the earth’s natural capital.
3. People who have a habit of consuming excessively should to learn how to live more simply and
sustainably.
a. Seeking happiness through the pursuit of material things is considered folly by almost every
major religion and philosophy.
4. Research shows that what a growing number of people really want is more community, greater
5. Some affluent people are adopting a lifestyle of voluntary simplicity, in which they seek to learn
how to live with much less than they are accustomed to having.
a. A life based mostly on what one owns is not fulfilling
b. Living with fewer material possessions and using products and services that have a smaller
environmental impact
6. Practicing voluntary simplicity is a way to apply Mahatma Gandhi’s principle of enoughness:
D. We can bring about a sustainability revolution during your lifetime.
1. Time for an environmental or sustainability revolution.
2. Three social science principles of sustainability:
a. Full-cost pricing (from economics): in working toward this goal, we would find ways to
include in market prices the harmful environmental and health costs of producing and using
goods and services.
E. This chapter’s three big ideas:
1. A more sustainable economic system would include the harmful environmental and health costs of
2. Individuals can work together to become part of the political processes that influence how
environmental policies are made and implemented.
3. Living more sustainably means becoming environmentally literate, learning from nature, living
17-1 How are economic systems related to the biosphere?
CONCEPT 17-1 Ecological economists and most sustainability experts regard human economic systems as
subsystems of the biosphere.
1. Define economics, supply, demand and price. Describe the characteristics of a truly free-market
2. Define economic growth and economic development. Distinguish among neoclassical economist,
17-2 How can we use economic tools to deal with environmental problems?
CONCEPT 17-2 We can use resources more sustainably by including the harmful environmental and health
costs of producing goods and services in their market prices (full-cost pricing), by subsidizing environmentally
beneficial goods and services, and by taxing pollution and waste instead of wages and profits.
1. Distinguish among direct, indirect, and full costs for products and services. Discuss why full-cost
pricing is not widely used.
2. Define gross domestic product (GDP), per capita GDP, and genuine progress indicator (GPI). List
17-3 How can we implement more sustainable and just environmental policies?
CONCEPT 17-3 Individuals can work together to take part in political processes that influence how
environmental policies are made and implemented.
1. Define politics. Note the relationship between politics and environmental policies. List 6 principles to
use when evaluating environmental policies. Discuss the role of grassroots-level efforts in promoting
17-4 What are some major environmental worldviews?
CONCEPT 17-4 Major environmental worldviews differ on which is more important—human needs and
wants, or the overall health of ecosystems and the biosphere.
1. List the major classes of environmental viewpoints. Explain the stewardship, planetary management,
17-5 How can we live more sustainably?
CONCEPT 17-5 We can live more sustainably by becoming environmentally literate, learning from nature,
living more simply and lightly on the earth, and becoming active environmental citizens.
1. Summarize three ideas that are the foundation of environmental literacy. List six ethical guidelines for
Key Terms
earth-centered worldview
economic development
economic growth
economics
environmental ethics
environmental justice
genuine progress indicator
GPI
gross domestic product
GDP
high-throughput
economy
low-throughput low-waste
economy
manufactured capital
natural capital
nature-deficit disorder
per capita GDP
Teaching Tips
Introduce this section by asking if any student has ever had strong sentiments or concerns about any part of
the natural environment.
• Ask those who affirm such a sentiment to write it down on a piece of paper.
• Ask each to read them out from their chairs/desks.
Personal values relationship to global sustainability and economics evaluation.
• Discuss the quality of life your students desire and produce a table of goals and anticipated
income. Are your students going to be realistically able to achieve their goals?
Chapter 17: Environmental Economics, Politics, and Worldviews
Paper Topics
1. What is the difference between traditional versus eco-economics? What are economic indicators and
how can we use them to measure sustainability?
2. What are the economic and political aspects of poverty? Why does poverty influence environmental
conditions?
Activities and Projects
1. Will people refrain from polluting excessively if they understand that such behavior is socially and
ecologically irresponsible? Discuss this question with your class and make a list of the various reasons
2. Ask industrial and environmental lobbyists to visit the class and discuss their goals, methods, and
problems.
1. Have your class survey the economic growth that has taken place recently in your state or community.
4. As a class exercise, explore the agencies in your community or state that are responsible for recruiting
new industries. What are their goals and methods? Compare these values and methods with
sustainable-Earth values and methods.
6. Have your students make a list of the employers whose payrolls are very important to the economic
health of your community. How would a transition to a sustainable-Earth economy affect the
employment structure of your community?
7. As a class exercise, conduct a school or community poll to find out if people are willing to pay for
pollution control. Have the entire class participate in the design of a brief opinion poll. The questions
8. As a class exercise, develop the basic elements of a federal budget for next year that includes realistic
9. As a class exercise, use the Congressional Record (or equivalent state documents) to follow the
progress of various pollution, land-use, energy, population, or other environmentally related bills. If
10. Does the United States have a sustainable-Earth president? Have students evaluate the current
administration’s performance from the point of view of sustainability. They should use specific
references and examples. Have students locate resources (such as documents prepared by the League
11. As a class project, identify a local environmental issue early in the semester or term and follow the
actions of environmental groups addressing that issue. What strategies and tactics are used, and with
what effects?
Attitudes and Values Assessment
1. Do you believe that individuals and countries should have the right to consume and waste as many
resources as they can afford?
2. Do you believe that the most important nation is the one that can command and use the largest fraction
of the world’s resources to promote its own economic growth at the expense of other countries?
3. Do you believe that the more we produce and consume, the better off we are?
7. Would you be in favor of improving the air or water quality in your community if this meant a net loss
of local jobs or your own job?
8. Would you favor requiring that the market cost of any product or service include all estimated present
and future environmental costs?
12. Have you met a grassroots environmental activist? How did you feel about the experience?
13. Do you feel global environmental security is necessary in order to achieve national security?
14. Would you support a 10% increase in income taxes if you knew this revenue would be used to improve
environmental quality?
Laboratory Skills
Wells, Edward. Lab Manual for Environmental Science. 2009. Lab #19: Are We Consuming Our
Biosphere.
News Videos
Who pays the price for technology?, The Brooks/Cole Environmental Science Video Library 2009, ©2011,
DVD ISBN-13: 978-0-538-73355-7
Kalahari Desert Could Double in Size, The Brooks/Cole Environmental Science Video Library 2009,
©2011, DVD ISBN-13: 978-0-538-73355-7
New Ideas for Dealing with Climate Change, The Brooks/Cole Environmental Science Video Library
2009, ©2011, DVD ISBN-13: 978-0-538-73355-7
Darwin’s Galapagos under Threat, The Brooks/Cole Environmental Science Video Library 2009, ©2011,
DVD ISBN-13: 978-0-538-73355-7
End for Selling Tradtional Bulbsl, The Brooks/Cole Environmental Science Video Library2009, ©2011,
DVD ISBN-13: 978-0-538-73355-7
Instructor’s Manual for Environmental Science, 15th edition
Additional Videos
Kilowatt Ours: A Plan to Re-Energize America (Documentary, 2008).
Information and curriculum about energy production and mountaintop removal.
http://www.kilowattours.org/
Frontline: World, Mexico: The Business of Saving Trees (Documentary, 2008, Online)
A look at how the carbon credit system has been used to create jobs in Mexico.
http://www.pbs.org/frontlineworld/rough/2008/03/mexico_the_busi.html
The End of Suburbia: Oil Depletion and the Collapse of the American Dream (Documentary, 2004)
Explores the implications of declining oil production on the suburban model of habitation.
http://www.endofsuburbia.com/
Escape From Suburbia – Beyond the American Dream (Documentary, 2008)
Oil on Ice (Documentary, 2004)
Arctic National Wildlife Refuge and drilling for oil.
http://www.oilonice.org/
Environmental Ethics (Video Series, 2005)
http://www.videoproject.com/env-906-p.html
Web Resources
Environmental Economics
Blog for economists to comment on environment and natural resources.
http://www.env-econ.net/