Chapter 18 Protecting the environment A.Population and resource limitations B.Natural-resource economics C.Environmental economics 2023/7/17 Economics
1 2023/7/17 Economics Chapter 18 Protecting the environment ◼ A.Population and resource limitations ◼ B.Natural-resource economics ◼ C.Environmental economics
A.Population and resource limitation Malthus and the dismal science:As population doubles and redoubles,it is as if the globe were halving and halving again in size-until finally it has shrunk so much that food production has shrunk below the level necessary to support the population. Flawed Prophecies of Malthus:technological change,population growth in most Western nations would begin to decline after 1870. 2 20237/17 Economics
2 2023/7/17 Economics A.Population and resource limitation ◼ Malthus and the dismal science:As population doubles and redoubles,it is as if the globe were halving and halving again in size—until finally it has shrunk so much that food production has shrunk below the level necessary to support the population. ◼ Flawed Prophecies of Malthus: technological change, population growth in most Western nations would begin to decline after 1870
Figure Pollution and Economic Growth Does pollution pollution increase with per capita economic growth? Empirical studies B indicate that pollution tends to follow an inverse U-shaped curve as incomes rise Income per capita 3 2023/7117 Economics
3 2023/7/17 Economics Figure Pollution and Economic Growth O Income per capita pollution per capita A B C Does pollution increase with economic growth? Empirical studies indicate that pollution tends to follow an inverse U-shaped curve as incomes rise
B.Natural-resource economics What are the important natural resource? They include land,water,and the atmosphere. Appropriable vs.inappropriable resources Renewable vs.nonerenewable resources 4 2023/7/17 Economics
4 2023/7/17 Economics B.Natural-resource economics ◼ What are the important natural resource? They include land,water,and the atmosphere. ◼ Appropriable vs. inappropriable resources ◼ Renewable vs. nonerenewable resources
Table 18-1 Resource Classification Renewable Nonrenewable Timber,agricultural Oil,natural Appropriable,land,solar energy gas,copper Fisheries,air,quality Climate,radioactive Inappropriable mountain views wasters 5 2023/7/17 Economics
5 2023/7/17 Economics Table 18-1 Resource Classification Renewable Nonrenewable Appropriable Inappropriable Timber,agricultural ,land,solar energy Oil,natural gas,copper Fisheries,air,quality ,mountain views Climate,radioactive wasters
C.Environmental economics Externalities come when an activity imposes involuntary costs or benefits on others,or an activity whose effects are not completely reflected in prices and market transactions. --Some externalities are positive,while others are negative. --Public vs.private goods(P372) Market inefficiency with externalities 6 2023/7117 Economics
6 2023/7/17 Economics C.Environmental economics ◼ Externalities come when an activity imposes involuntary costs or benefits on others,or an activity whose effects are not completely reflected in prices and market transactions. --Some externalities are positive,while others are negative. --Public vs.private goods(P372) ◼ Market inefficiency with externalities
Figure 18-1 Inefficiency from externalities P MCS MCP E D 7 2023/7/17 Economics
7 2023/7/17 Economics Figure 18-1 Inefficiency from externalities Q P MCS MCP D 0 QS QP E1 E0 F
Policies to correct externalities Government programs: --Direct control --Market solution:Emissions fees. --Market solution:Tradeable emissions permits Private approaches: --Liability rules --Negotiation and the Coase Theorem 8 2023/7/17 Economics
8 2023/7/17 Economics Policies to correct externalities ◼ Government programs: --Direct control --Market solution: Emissions fees. --Market solution: Tradeable emissions permits. ◼ Private approaches: --Liability rules --Negotiation and the Coase Theorem