Prepared for class discussion By

Prof.S.Suryanarayanan

} Conventional economics:◦ Market based economic system; free flow of product and money

between households and business.◦ Households pay to buy products; firms use money to buy factors of

production ( natural, human,financial,and manufactured resources).◦ Unlimited economic growth independent of earth’s life support system;

dependent on human ingenuity.◦ Environment is a subsystem of economic system

} Environmental ( ecological ) economy:◦ Economic system is subsystem of environment

Pollution and waste---recycle and reuse

Economic system( production—consumption)

Natural Capital ( air,water,land,soil,biodiversity,energy resources)

Characteristic Unsustainable economic growth

Environmentally sustainable economic development

Production emphasis Quantity QualityNatural resources Not very important Very importantResources productivity Inefficient ( high waste ) Efficient ( low waste )Resource throughput High LowResource type Non renewable RenewableResource fate Discarded Recycled, reused or

compostedPollution control Clean up ( output

reduction)Prevention ( input reduction)

Guiding principles Risk-benefit analysis Prevention and precaution

} GDP/ GNI – key economic indicator; compares economic

output of different nations.

} GPI– a new concept, Genuine Progress Indicator that includes

human well being and environmental quality.

} Full cost pricing ( environmental pricing )◦ Full cost= internal cost+ external cost◦ Internal cost—all direct and indirect cost to produce goods◦ External cost—costs incurred resulting in harmful effects from

depletion and degradation of natural resources ,pollution of air and water and contribution to climate change.

} Challenges in environmental pricing◦ Prices of goods will go up◦ How to do accounting◦ Government intervention is important

} Economics:◦ Reward earth sustaining behaviour◦ Penalise( more taxes) earth endangering behaviour◦ Tax pollution and waste instead of wages and profits◦ Use full cost pricing◦ Sell more services instead of more things◦ Do not deplete natural capital◦ Reduce poverty

} Ecology and population◦ Mimic nature◦ Preserve biodiversity◦ Repair ecological damage◦ Stabilize population by reducing fertility

} Resource use and pollution◦ Reduce resource use and waste by refusing, reducing,reusing,and

recycling◦ Improve energy efficiency◦ Rely more on renewable solar rand geo thermal energy◦ Shift from carbon based ( fossil fuel) economy to a renewable based

economy

} The shifting can happen only with political will.

} Challenge—politicians interested in short term problems; next election is the limiting factor

} Guidelines in making Environmental Policies:1. Humility principle- let us recognise our understanding of nature is

limited; learn more2. Reversibility principle-unwise to do anything disturbing biodiversity that

is irreversible in human time scale.3. Precautionary principle-safer activities to protect human health and

safety even if conclusive evidence not available.4. Prevention principle -activities that prevent problems5. Integrative principle-take decisions that involve integrated solutions.6. Environmental justice principle- fair treatment and meaningful

involvement of all people

} Become informed on issues◦ Respect all life in the planet◦ Understand how works and sustains itself

} Make your views known to people around you◦ Understand and evaluate changing environmental world view.◦ Learn to evaluate beneficial and harmful consequences of our choices

of lifestyle.} Represent to authorities} Contribute time and money to the cause.

◦ I know → I care → I’ll act} Support NGOs and campaigns working on environmental issues.

} Should we care about future generations? --- Discussion.

} Ethical obligation

} “The earth provides enough to satisfy every person’s need but not every person’s greed.”◦ Mahatma Gandhi

As the planet’s most important species, we are in charge

All species are important and we are not in charge

Resources are unlimited Earth’s resources are limited and should not be wasted.

All economic growth is good and is unlimited

Some forms of economic growth are environmentally beneficial and some are environmentally harmful

Our success depends on managing the world’s life support systems for our benefit.

Our success depends on learning how the earth sustains itself and integrating such scientific lessonsfrom nature ( ENVIRONMENTAL WISDOM ) into the ways we think and act.

} Reference:

} Environmental Science by G Tyler Miller Chapter 2