AFRICA BEZA UNIVERSITY COLLEGE

Department of Economics
Master of Science in economics

Assignment of Environmental Economics

BY Adane Ayele
ID No: 013/2012
The Assignment Submitted to: Debela Geleta/Phd/

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Assignment I
Article I:

[Environmental Economics, the current British political Economy and its relevance to
global applicability]

General Instruction:

 Read the following article thoroughly

 Your answers to this question is based on chapter one of the course

Source: The Guardian (2019)

The climate emergency has risen to the top of the UK’s election agenda in a way that would have
been “unthinkable” even five years ago, leading environmentalists have said, predicting that it
promise a permanent change in British political economy.

Recently, Labour took the unprecedented move of putting green issues as the top section of its
manifesto, the first time one of the UK’s two major parties has done so. Jeremy Corbyn led the
appeal to voters with policies including an £11bn windfall tax on oil and gas companies, a
million new jobs in a “green industrial revolution” and commitments on moving to a net-zero
carbon economy.

Such focus on climate and the environment would have been almost unthinkable five years ago
Tackling climate change runs through this manifesto in a way that is unprecedented from either
of the main parties ahead of a UK general election.

Now that as younger voters in particular were “energized” over the environment. Public anxiety
had been fuelled by people seeing extreme weather around the world, and the rise of climate
activism in movements such as Extinction Rebellion and the school climate strikes reflected that.

Public concern over the climate is “unequivocal”, and people back decarburization by a massive
margin. To have all the major parties supporting a transition to net zero within a few decades,
and competing with each other on policies to deliver this, is unprecedented. Pushing the climate
emergency back to the political periphery would no longer be an option for any government.

The Liberal Democrats, while focusing on Brexit, have also made the climate emergency a key
priority, promising to generate 80% of the UK’s electricity from renewable sources by 2030, to
bring forward to 2045 the deadline for net-zero carbon, and to expand electric vehicles and ban
fracking. The Green party wants to spend £100bn a year for the next decade on the climate crisis,
replacing high-carbon infrastructure and creating jobs.

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Questions:

1. From the excerpts above, justify the detrimental importance of natural resource and
environmental economics
2. Distinguish between pessimistic and optimistic views of an environment
3. Which view (model) is reflected is in the above excerpt: Pessimistic or Optimistic?
4. How do you evaluate, from environmental economics point of view, the Ethiopian
government project of “Green legacy” whereby in one rainy season of last winter over
four billion trees were planted?

Answers for questions

1. From the excerpts above, justify the detrimental importance of natural resource and
environmental economics.

As mentioned in the article, in United Kingdom, the importance of natural resources to economic
development is now well-established. In the election campaign, the competitors took it as an
agenda. This is because; how a country manages its natural capital stock is critical for achieving
sustainable economic development. To use the natural resources properly, countries should have
a clear and strong policies on natural resources utilization as well as green economy. The poor
policies and the inefficient mismanagement of natural resources and green economy
management can be detrimental to growth and development. Moreover, the article magnifies
that, through the use of natural resources, they politicians of UK has planned to generate 80%
from the renewable resources by 2030. If they will be able to achieve these promises, they can
save the billions of pounds spent for oil utilization. On the other hand, the green economy they
planned also able to generate more job opportunities in a sustainable manner for citizens.

In the article it is mentioned that, government plays the essential role in putting into place
policies that ensure that natural resources contribute to the long-term economic development of
nations, and not only to short-term revenue generation for sustainability. High-quality
institutions in the present, that planning for the future can turn the available fewer sources into an
opportunity.

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Natural resources, either renewable or non-renewable, and ecosystem services are a part of the
real wealth of nations. They are the natural capital out of which other forms of capital are made.
Natural resources contribute towards fiscal revenue, income, and poverty reduction. Sectors
related to natural resources use provide jobs and are often the basis of livelihoods in poorer
communities. Owing to this fundamental importance of natural resources, they must be managed
sustainably.

Maximizing the value of natural resources for sustained growth and development, and avoiding
the resource curse, requires policies that formalize and codify revenue management procedures.
The wealth embodied in natural resources makes up a significant proportion of the wealth of
most nations, often more than the wealth embodied in produced capital, therefore making natural
resources management a key aspect of economic development special in view of green economy.

2. Distinguish between pessimistic and optimistic views of an environment

Pessimistic views of an environment

Pessimists believe that natural resource damages have been caused by human’s altered view of
nature. Those who believe that current economic development is not sustainable believe that the
real economic growth that the statistics show is totally illusory. These pessimists see resource
depletion and pollution as preventing unlimited economic growth. They argue that the present
rate of economic growth is based on the exploitation of non-renewable resources at rates that are
not sustainable for many more years.

The pessimists also believes that current exponential growth trends in world population,
industrialization, pollution, food production, and resource depletion continue, serious shortages
of important resources will develop within one hundred years. The more rapid economic growth
becomes, the faster is the depletion of non-renewable resources.

Pessimists also argue that global pollution from economic activity, for example, the greenhouse
effect, acid rain, and ozone depletion, damages natural resources thereby reducing their
productivity and economic value. Rising global temperatures will shift agricultural production

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areas, raise seas levels to flood coastal cities, and disrupt national economies; acid rain makes
lakes incapable of sustaining life and kills forests; the depletion of the ozone layer by industrial
gases can be expected to disrupt the ocean's food chain and to cause a sharp rise in the number of
cancers. Development puts toxic substances into the human food chain and into underground
water tables.

Pessimists note that there is no guarantee that technical progress will continue to proceed at a
sufficiently rapid rate. Since the future rate of technological progress is unknown there is
uncertainty about our ability to overcome resource constraints in the future. 

Optimisticviews of an environment

On the other hand, an optimistic person argues that, pessimistic conclusions about the supply of
natural resources and the impact of development on the environment are wrong. Natural
resources are, in fact, becoming less scarce. The cost trends of almost every natural resource
have been downward over the long run; wood production has been rising; the world will not run
out of water. The threats of pollution are vastly overblown. Air and water quality have actually
improved in recent decades; the recent changes in global temperature may be viewed as normal
oscillation rather than as structural changes caused by economic activity.

Optimists argue that grave species extinction predictions are unsupported by statistical evidence
and that extinction and the development of new species have been a biological fact for millions
of years. Optimists also claim that available supplies of non-renewable resources are extremely
large. It has been estimated that the expected life of our known energy resources given only
current technology is 8,000 years. Optimistic person argues that the ability of technological
progress to overcome resource constraints is held to be virtually unlimited.  

3. Which view (model) is reflected is in the above excerpt: Pessimistic or Optimistic?

In the articles the given excerpt is pessimistic. This is because, in the line fourth paragraph it
says that “Public anxiety had been fuelled by people seeing extreme weather around the world,
and the rise of climate activism in movements such as Extinction Rebellion and the school
climate strikes reflected that”. This paragraph dictates that, due to the human actions, the natural

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disasters are occurring. To solve these problems, the UK peoples and politicians believed that,
the use of natural oil that is the source of CO2.

Similarly, in the fifth paragraph, the articles mentioned that “Public concern over the climate is
unequivocal, and people back decarburization by a massive margin”. This paragraph also
confirms that the issues of natural resource depletion becomes a public concerns. For this the
decarburization to zero level is considered as an agenda of debate for the election.

4. How do you evaluate, from environmental economics point of view, the Ethiopian
government project of “Green legacy” whereby in one rainy season of last winter over four
billion trees were planted?

With the initiation of Ethiopian Prime Minister, Dr. Abiy Ahmed, our country has able to plan 4
billion trees. The plantation has carried throughout the country. During the period, all age and
gender has participated. The government did this with the objective of increasing the forest
coverage, decreasing the deforestation and relying on the renewable natural energy sources.
From the environmental economics view point, the campaign has a many implications. Last year
the green initiative has set a world record by planting the largest number of seedlings in one day.
Citizens across the nation have volunteered to plant a world record 353 million trees in a single
day on July 30, 2019, and a total of over 4 billion tree seedlings between May and October 2019.
It is worth remembering here foreign nationals of the diplomatic community have also
participated in the “green” campaign last year.

Firstly, it will improve the productivity of agricultural production. On the other hand, the trees
planted are multipurpose and can be used for consumptions. The forest that will create can
maintain the ecosystem and create the balanced biodiversity. The employment and job creation
can be achieved through organizing youths in forest management. The income can also be
generated through the carbon trading. Moreover, if we are able to create the dense forest, the
rainfall can be available throughout the year, and our dams are able to get required amount of
water for electrifications.

Experts estimate that the forest coverage of the country is showing improvement, and it stands
now around 15.5%. They attributed the rise in forest coverage partly to the consecutive tree

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planting campaigns done so far across the nation. The indispensability of afforestation to such
agrarian economies of rain-fed agriculture like Ethiopia is unquestionable. More forest would
simply mean more streams and more rain, and this implies our rivers would flow for the year
around brimming to the full.