MANAGERIAL ECONOMICSENVIRONMENTAL

DEGRADATION IS THE COST JUSTIFIED?

INTRODUCTION Environmental degradation an issue of

increasing concern for all of us.• The deterioration of the environment through

depletion of resources, such as air, water and soil.

• The destruction of ecosystems and the extinction of wildlife.

We only have one Earth to work with, and if the environment is irreparably

compromised, it could mean the end of human existence.

EFFECTS of Environmental Degradation

DISEASE CAUSED BY DEGRADATION

Skin Cancer Cases Projection

WATER POLLUTION

Scarcity Of Fresh Water

Water Pollution

British Petroleum Oil spill, The GULF OF MEXICO

Largest marine oil spill in history of petroleum industry causing immense water pollution, happened on 20th April, 2010.

Deep water Horizon drilling rig explosion killing 11 platform workers and injured 17 others.

Releasing 4.9 million barrels of crude oil. Causing extensive damage to marine and wildlife habitats.

Effecting Gulf’s Fishing and Tourism industries. Heavy clean up cost and damage effecting the economic factor.

BP Spill ( contd.)

Effect on economy due to this water pollution

Total insured losses from accident could reach $ 30 million as of now.

Market value of British Petroleum decreasing from $105 billion to $ 60 billion.

Unemployed oil workers for six months due to moratorium on drilling.

Real Estate prices and transaction in Gulf Of Mexico area has decreased.

Extensive Damage to Marine and Wildlife habitats.

Gulf’s fishing and tourism industry highly effected extensively effecting the economy.

AIR POLLUTION

AIR POLLUTION

GRAY SMOGCHINA’S GRAY SMOG

Thick Gray Smog pollution obscures the view of Beijing and nearby and nearby regions.

City’s pollution index reached the highest level on scale.

Air pollution resulting premature deaths and respiratory problems causing health issues.

Acid rain effects 33% of china’s population as per NYT.com.

75% of China’s city dwellers line below the country’s acceptable air quality standard.

GRAY SMOG (contd.)

Economic consequences due air pollution

Annual average economic losses from air pollution is 7.2 billion Yuan.

Losing 6.75 percent of national GNP fighting against air pollution.

Human health losses to 32 percent due to air pollution in China.

Acid rain resulting in approximately 14 billion Yuan of economic losses on annual basis.

SOIL DEGRADATION

Condition of Soil Globally

Deforestation

ECONOMIC EFFECT OF ENVIRONMENTAL DEGRADATION

• FRESHWATER POLLUTION BY PHOSPHOROUS AND NITROGEN .

• SPENDING $4.3 BILLION ANNUALY ON WATER PURIFICATION BY AMERICANS .

• INCREASING WATER BILLS• MORE MONEY SPEND ON TREATMENT FOR WATER

PURIFYING.• PRODUCTIVITY IS EFFECTED.• SHORTAGE OF EVIRONMENTAL RESOURCES SUCH

AS DECLINE FISHRIES LEADING TO IRREVERSIBLE COMPACTION.

Water Pollution

• VEHICLES AND INDUSTRIAL ACTIVITIES ARE THE MAIN CAUSES OF AIR POLLUTION EFFECTING PRODUCTIVITY DURING CRITICAL PERIOD OF ENVIRONMENTAL DEGRADATION.

• POLLUTION CAUSING ACID RAIN AND REDUCTION OF OXYGEN IN ATMOSPHERE EFFECTING FOREST AND WATER BODIES.

• $2.3 BILLION IS BEEN EXPENDED EVERY YEAR BY GOVERNMENT ON AIR POLLUTION.

Air Pollution

• AGRICULTURAL PRODCTIVITY EFFECTED DEPLETION OF SOIL INCREASING

MALNUTRITION FOR FARMERS.• TILING OF LAND LOSS OF PRODUCTIVITY LOSS OF TOP SOIL

EFFECTING AGRICULTURAL GOODS DUE TO CONSTANT TILING OF THE LAND.

• LOSS OF NUTRIENTS FROM RICH TOP SOIL

Soil Pollution

LOSS OF BIODIVERSITY

• DIRECT ECONOMIC VALUE OF PRODUCTS FROM SPECIES.

• THE INDIRECT ECONOMIC VALUE OF BENEFIT PRODUCED BY SPECIES.

• NUTRIENT RECYCLING IN ECOSYSTEM.

CONCLUSIONCOUNTRY ENVIRONMENTAL

DEGRADATION (% OF GDP)

REMARKS

CHINA 8%Air and water pollution damages were nearly $54 billion a year or 8% of the GDP in 1995. Some scholars have estimated the burden of environmental pollution at 5% of GDP. Loss due to deforestation alone is a staggering 12%.

 

INDIA 4.5 TO 8% Environmental cost assessment by scholars varies

from 4.5% to 5% of GDP due to air pollution,

groundwater mining, and deteriorating quality of

aquifers, land degradation and deforestation.

Annual economic costs of air pollution,

contaminated water, soil degradation, and

deforestation were estimated to be 8% of GDP by

Tata Energy Resource Institute (TERI)

ENVIRONMENTAL DEGRDATION

Environmental Kuznet Curve

•Use better technology and practices to counter environmental degradation•Better Implementation of Environmental Laws•Cost of Defiance should be more than Cost of Complaince•Transparent practices by Corporation and Public Sector•Change tendency for short term quick profits

SAVE EARTH