Sustainability and Human Development
Objectives
•Explain the difference between neoclassical and ecological economics, and how each discipline views ecological processes and natural resources
•Distinguish between different types and categories of resources
•Discuss internal and external costs, market approaches to pollution control and cost-benefit analysis
Objectives
•Define GNP and explain some alternative ways to measure values of natural resources and social progress
•Analyze the role of businesses and some possible strategies for achieving future sustainability
•Recognize the push and pull factors that lead to urban growth
•Appreciate how cities fail to be sustainable and how they might become more sustainable
Objectives
•Understand the causes and consequences of sprawl, and how smart growth could solve some urban problems
•See the connection between sustainable economic development, social justice and the solution of urban problems
Creating another earth
•Biosphere 2 project in Arizona
•Intended to be a self sustaining system
–Grow food, clean air and water
•8 inhabitants for 2 years
Biosphere 2 failure
•Cost $200 million to build and $1 million/year in fossil fuel energy
•Deteriorating air and water quality in first year
–Oxygen fell from 21% to 14%
–Carbon dioxide undergoing large daily and seasonal changes
Sustainability and resources
•Sustainability is a critical theme of environmental science
–Resources should be used in ways that do not diminish them
•Sustainable Development
–Meeting the needs of the present without compromising the ability of future generations to meet their own needs
•Must be available to all to be enduring
Resource types
•Resource - Anything with potential use in creating wealth or giving satisfaction
–Nonrenewable resources - Materials present in fixed amounts in the environment
–Renewable resources - Materials that can be replenished or replaced
Economic worldviews
•Economy is the management of resources to meet needs in the most efficient manner possible
•Central theme of sustainability is to use assets in ways that will make them last
Classical economics
•Originally a branch of moral philosophy concerned with how individual interests and values intersect with larger social goals
•Capitalistic system - Market competition between willing sellers and buyers is believed to bring about the greatest efficiency of resource use
Classical economics
•Demand is the amount of a product or service consumers are willing and able to buy at various prices assuming they are free to express their preferences
•Supply is the quantity of that product being offered for sale at various prices
•Price is determined by supply and demand
–Price is low when supply is high
–Price is high when demand is high
Classical economics
•In a free market, supply and demand should come into market equilibrium
•Price elasticity - Raising price does not necessarily reduce demand
–Cigarettes
Neoclassical economics
•At the end of the 19th Century, the field of economics divided into two camps:
–Political economics was concerned with social structures, value systems, and relationships among classes
–Neoclassical economics adapted principles of modern science to economic analysis
•No interest in social concerns
Capital
•Capital is any form of wealth that contributes to the production of more wealth
–Natural capital
–Human capital
–Manufactured capital
–(Social capital)
Neoclassical economics
•Growth is seen as a desirable necessity
•Natural resources viewed as merely factors of production rather than critical supplies of materials, services, and waste sinks
Consumption
•Important measure of growth and wealth is consumption
•Throughput is the amount of resources a society uses and discards
•In the neoclassical view, greater throughput means greater wealth
•Throughput generally measured as Gross National Product, the sum of all products bought and sold in an economy
Ecological economics
•Recognizes that the world is an open, dynamic system in which the human economy in inextricably embedded
•Acknowledges dependence on essential life-support services provided by nature
•Regards some aspects of nature as irreplaceable and essential
Ecological services
•Ecological functions that we do not pay for directly
–Processing air pollution
–Purifying wastewater
–Providing clean water
–Carrying out photosynthesis
–Creating soil
•Ecological services are included in ecological economics
Ecological economics
•Principle concern is equitable distribution of resources and rights
•Promotes steady state economy
–Steady-State economy is characterized by low human birth and death rates, political and social stability, use of renewable energy sources, material recycling, and emphasis on efficiency and stability
•Human and natural capital can grow without constant expansion of resource us
Are there limits to growth?
Scarcity and limits to growth
•Many economists contend human ingenuity and enterprise often allow us to respond to scarcity in ways that postpone or alleviate dire effects of resources
–Dependent on Limits To Growth
Economic models
•Limits to Growth
–Club of Rome (1972)
•Beyond the Limits
–The Meadows Group (1992)
–Include technological advances in model
Technological development
•Increasing technological efficiency can alter supply/demand relationships
–As technology makes goods and services cheaper, the quantity available at a given price can increase
–As materials become more expensive and difficult to obtain, it becomes more cost-effective to discover new supplies or use existing supplies more efficiently
Increasing environmental carrying capacity
•Technological developments have resulted in price decreases for most raw materials over the last hundred years
•Economists generally believe this pattern will continue, while ecologists generally disagree
Communal property resource
•Tragedy of the Commons
–Argued commonly held resources are inevitably degraded because self-interests of individuals tend to outweigh public interests
•Theorized each individual will attempt to maximize personal gain
–Occurs in an open access system with no rules to manage resource use
Community-owned grazing lands
•20 farmers, each with 5 cows
•Available grass supports 1000 kg milk/day
•Each cow = 10 kg milk/day, each farmer gets 50 kg milk
Community-owned grazing lands
•One farmer adds a cow, increasing herd to 101
•Average milk production = 9.9 kg/day (1000 kg/day distributed among 101 cows)
•But, this farmer now has six cows, so his production has increased!
– 6 cows * 9.9 kg/day = 59.4 kg/ day
Features of a successful “Commons”
•Communal Resource Management Systems
–Community members have lived on resource
–Resource has clearly defined resource
–Group size is known and enforced
–Resource is relatively scarce and variable
–Local, collective management strategies
–Resource and use are actively monitored
–Effective conflict resolution mechanisms
–Incentives encourage rules compliance
Natural resource accounting
•Cost-Benefit Analysis
–Assigns values to resources and social and environmental effects of an undertaking
•Finds optimal efficiency where marginal cost of pollution control equals the marginal benefit
–Criticisms include lack of standards, inadequate attention to alternatives, and monetary values for intangible costs and benefits
Measuring non-market values
•Natural resources characteristics that should be considered in ecological economics:
–Use - Price to consume a resource
–Option - Preserving for future
–Existence - Even if unseen
–Aesthetic - Appreciated for beauty
–Cultural - Important in cultural identity
–Scientific and education – Information or experiential aspects
Natural resource accounting
•Gross National Product (GNP) - Total value of goods and services produced by an economy during a year
–Gross Domestic Product (GDP) - Only includes activity within national boundaries
•Both criticized as measure of well-being because they do not distinguish between beneficial and harmful growth
–Also do not account for resource depletion or ecosystem damage
Measuring real progress
•Genuine Progress Index (GPI)
–Takes into account real per capita income, distributional equity, natural resource depletion, and environmental damage
•Human Development Index (HDI)
–Incorporates life expectancy, educational attainment, and standard of living measures
Internal vs. external costs
•Internal costs - Expenses borne by those using a resource
•External costs - Expenses borne by someone other than those using a resource
•Internalizing costs - Ensuring those that reap the benefit of resource use also bear all external costs
Market-based environmental protection
•Pollution charges - Fees assessed per unit of effluent
–Encourages businesses to perform as much pollution control as possible
•Emissions trading - Allows companies or nations that can reduce pollution below target levels to sell their excess capacity
–1990 Clear Air Act created a market-based system to reduce emissions of sulfur dioxide
Trade and development
•According to economic theory and comparative advantage, each place has goods or services it can supply in better quality, or at better prices, than its neighbors
–Keeps less-developed countries in a perpetual role of resource suppliers to more-developed countries
International Trade
•Comparative Advantage Theory
–Each place has some good or service it can sell cheaper, or better than others can
•International trade allows buyers the advantage of the best or cheapest products from around the world
–One problem is the internalization of costs on a grand scale
–Many claim international banking system set up by and for wealthy countries
Green business
•During first Industrial Revolution, raw materials were seen as inexhaustible
–Recently many businesses have realized this theory is flawed
•Operating in a socially responsible manner consistent with principles of sustainable development can be good for business
–Pollution = Waste = Lower Profits
Jobs and the environment
•For years, business leaders portrayed environmental protection and jobs as mutually exclusive
–Ecological economists found only 0.1 % of all large-scale layoffs in the U.S. in recent years were due to governmental regulations
•Recycling requires more labor than using virgin materials
Urbanization
•Vast majority of humanity has always lived in rural areas where natural resource-based occupations provided support
–Since beginning of Industrial Revolution cites have grown rapidly in size and power
–Urbanization - Increasing concentration of population in cites and transformation of land use and society to metropolitan patterns of organization
What is a city?
•U.S. Census Bureau considers any incorporated community a city, and any city with more than 2,500 residents as urban
–In rural areas, most residents depend on natural resources for their livelihood
–In urban areas, most people are not directly dependent on natural resource-based occupations
What is a city?
•A village is a collection of rural households linked by culture, customs, family ties, and association with the land
•A city has a large enough resource base to allow residents to specialize in arts, crafts, services, or professions other than resource-based occupations
•A megacity is an urban area with more than 10 million inhabitants
World urbanization
•In 1850, only 2% of world population lived in cities
–By 2000, 47% of world population lived in urban areas
•Only Africa and South Asia remain predominantly rural
–Expected that 90% of population growth over the next 25 years will occur in less-developed countries
World urbanization
•Urban growth has been particularly dramatic in the largest cities, especially in the developing world
–A century ago, London was the only city with more than 5 million people
–Thirty cities currently have populations larger than 5 million
World urbanization
•Some predict 93 cities with a population of at least 5 million by 2025
–Three-fourths in developing world
•In developing world megacities, as much as half of urban population are transient workers or residents of shanty towns
•By some estimates, Mexico City has a current population of 25 million, and grows by 750,000 each year
Causes of urban growth
•Two main avenues of urban growth:
–Natural increase
•Fueled by improved food supplies and medical care
–Immigration
•Caused by push factors forcing people out of the country and pull factors drawing them into cities
Immigration push factors
•Overpopulation
•Economics
•Politics
•Racial or religious conflicts
•Changes in agriculture
–Large monoculture farms
Immigration pull factors
•Excitement and vitality
•Jobs
•Housing
•Entertainment
•Social mobility and power
•Specialization of professions
Government policies
•Government policies often favor urban over rural areas in push and pull factors
–Developing countries often spend majority of budgets on improving urban areas
–Major cities gain a monopoly on new jobs, education and general opportunities
Current urban problems
•Developing world
–Uncontrollable growth
•Traffic and congestion
•Air pollution
•Sewer systems and water pollution
–Only 35% of urban residents in developing world have satisfactory sanitation and safe drinking water
Housing problems
•At least 1 billion people live in slums of central cities and in shantytowns in the outskirts of cities
•Around 100 million people have no home at all
Current world problems
•The developed world
–Rapid growth of cities that accompanied industrialization has mostly slowed or reversed
•Many of the environmental problems have been reduced
–Many of major polluters have moved to developing countries
Urban sprawl
•In most American metropolitan areas, the bulk of new housing is in large, tract developments that leapfrog beyond city edges in search of inexpensive land
•Consumes about 200,000 ha of U.S. agricultural land annually
Urban sprawl
•Because many Americans live far from work, they consider a private automobile essential
–Average U.S. driver spends 443 hours per year behind a steering wheel
•In some metropolitan areas, it is estimated one-third of all land is devoted to automobile infrastructure
•Traffic congestion costs U.S. $78 billion annually in wasted fuel and time
Urban sprawl
•With a reduced tax base and fewer civic leaders living or working in downtown areas, the city is unable to maintain its infrastructure
•Low density development of suburbs is racially and economically exclusionary because it provides no affordable housing and makes a viable public transit system impractical
Smart growth
•Smart growth makes efficient and effective use of land resources and existing infrastructure by encouraging in-fill development
–Also attempts to provide a variety of transportation options
•Goal is staged, managed growth that protects environmental quality and diversity
Urban sustainability
•Limit city size, or organize into modules of 30,000 to 50,000 people
•Maintain greenbelts in and around cities
•Determine in advance where development will take place
•Locate everyday services more conveniently
•Encourage walking and low-speed vehicles
•Promote more diverse, flexible housing as an alternative to conventional housing
Urban sustainability
•Make cities more self-sustainable by growing food locally, recycling wastes and water, etc.
•Invite public participation in decision-making
•Plan cluster housing, or open-space zoning, which preserves at least half of a subdivision as natural areas, or other forms of open space
Designing for open space
•Traditional suburban development typically divides land into a checkerboard layout of nearly identical 1-5 ha parcels with no designated open space
–Conservation development - Preserves at least half of a subdivision as natural areas, farmland, or other forms of open space
Designing For Open Space
•Plan cluster housing or open-space zoning, which preserves at least half of a subdivision as natural areas, farmland, or other forms of open space
–By carefully clustering houses on smaller lots, conservation subdivisions can provide the same number of buildable lots as a conventional subdivision and still preserve 50 to 70% of land as open space
Sustainable development in the third world
•Many planners argue social justice and sustainable economic development are answers to urban problems
–Another important measure of progress may be institution of social welfare providing care to the sick and elderly
•Others argue the best hope for developing countries may be to “delink” from established international economic systems and develop self-sustainability