The

Environment
and
Development

Presented by Group 1 AE 12: BSA 1

Overview of the
lesson ENVIRONMENT AND
DEVELOPMENT: THE
BASIC ISSUES

GLOBAL WARMING RURAL DEVELOPMENT

AND CLIMATE
AND THE
CHANGE
ENVIRONMENT
ECONOMIC MODELS
OF ENVIRONMENT THE LOCAL COSTS OF RAIN
ISSUES FOREST DESTRUCTION
URBAN DEVELOPMENT
AND THE
POLICY OPTIONS IN
ENVIRONMENT
DEVELOPING AND
DEVELOPED COUNTRIES
 Economics
and the
Environment
 Economics and the
Environment

GLOBAL WARMING
CLIMATE CHANGE
ENVIRONMENTAL QUALITY
AFFECTS, AND IS AFFECTED
BY, ECONOMIC
DEVELOPMENT
Environment and
Development:
The Basic Issues
Sustainable Development and
environmental accounting

SUSTAINABLE NET NATIONAL INCOME (NNI*)

NNI* = GNI - Dm - Dn

NNI* = sustainable national income

Dm = depreciation of manufactured capital
assets
Dn =depreciation of environmental capital
Sustainable Development and
environmental accounting
NNI* includes costs of activities to reverse or avert
environmental decay. An even better measure,
though more difficult to calculate with present data
collection methods, would be:

NNI** = GNI - Dm - Dn - R - A
Dm and Dn are as before,
R = expenditure required to restore environmental
capital (forests, fisheries, etc.)
A = expenditure required to avert destruction of
environmental capital (air pollution, water
and soil quality, etc.).
Environment and Development:
The Basic Issues

POPULATION, RESOURCES, AND THE

ENVIRONMENT
POVERTY AND THE ENVIRONMENT

GROWTH VS THE ENVIRONMENT

RURAL DEVELOPMENT AND THE

ENVIRONMENT

URBAN DEVELOPMENT AND THE

ENVIRONMENT
Environment and Development:
The Basic Issues

THE GLOBAL ENVIRONMENT AND

ECONOMY

NATURE AND PACE OF GREENHOUSE

GAS-INDUCED CLIMATE CHANGE

NATURAL RESOURCES - BASED

LIVELIHOODS AS A PATHWAY OUT OF
POVERTY:PROMISE AND LIMITATIONS
The Scope of environmental
degradation: An overview

ENVIRONMENTAL CHALLENGES
CAUSED BY POVERTY

DEPENDENCE ON BIOMASS
FUELS

AIRBORNE POLLUTANTS IN
URBAN AREAS
 RURAL
DEVELOPMENT AND
THE ENVIRONMENT:
A TALE OF TWO
VILLAGES
Environmental Deterioration in
Villages
SUB-SAHARAN
AMAZON
AFRICA
HOW
HOW THE RAPID
UNSUSTAINABLE
GROWING
FARMING LEADS TO
POPULATION
ENVIRONMENTAL
LEADS TO
DEGRADATION,
ENVIRONMENTAL SOIL DEPLETION,
PROBLEMS, POVERTY, AND
SPECIFICALLY LOW
DESERTIFICATION PRODUCTIVITY
Global Warming
and Climate
Change
Global Warming and Climate
Change

IPCC'S ASSESSMENT REPORT

PROPOSED STRATEGIES FOR

MITIGATION

DEFORESTATION IN DEVELOPING
COUNTRIES

REDUCING EMISSIONS FROM

DEFORESTATION AND FOREST
DEGRADATION (REDD) MECHANISM
Economic Models
of Environment
Issues
Privately owned
resources
 Privately owned
resources

ALLOCATIVE TOTAL COSTS TO PRODUCER

EFFICIENCY PRODUCERS SURPLUS
TOTAL NET MARGINAL COST CONSUMER
BENEFIT SURPLUS
MARGINAL
TOTAL BENEFITS BENEFIT
Privately owned
resources
 Privately owned
resources

OPTIMAL MARGINAL NET

RESOURCE VALUE
ALLOCATION PROPERTY
OVER TIME RIGHTS
SCARCITY RENT
PRESENT VALUE
Perfect property rights markets are
characterized by four conditions:

Universality -all resources are privately owned.

-it must be possible to prevent

Exclusivity or others from benefiting from a
“excludability” privately owned resource.

-the owner of a resource may sell

Transferability the resource when desired.

-the intended market distribution of

Enforceability the benefits from resources must be
enforceable.
Common Property
Resources and
Misallocation
Public Goods and Bads: Regional Environmental
Degradation and the Free-Rider Problem

NEGATIVE EXTERNALITY IN COMMON

PROPERTY CULTIVATION

INTERNALIZATION OF EXTERNALITIES

CHALLENGES OF INTERNALIZING
EXTERNALITIES

PUBLIC GOODS AND PUBLIC BADS

SOCIALLY NONOPTIMAL OUTCOMES

Public Goods and Bads: Regional Environmental
Degradation and the Free-Rider Problem

GLOBAL SCOPE OF PUBLIC GOODS

CASE STUDY: REGIONAL

ENVIRONMENTAL DEGRADATION
 Public Goods and Bads: Regional Environmental
Degradation and the Free-Rider Problem

ENVIRONMENTAL INTERNALIZATION
DEGRADATION
PUBLIC GOOD
FREE RIDER
PROBLEM
PUBLIC BAD
EXTERNALITY
To simplify our analysis, we will translate this public-bad problem into
a public-good framework. Environmental conservation through the
protection of trees provides a benefit to all and is thus a public good.
 Urban
Development and
the Environment
Environmental Problems of
Urban Slums

– Health threatening pollutants

– Unsanitary environmental conditions
– Serious impact on poor

Industrialization and urban air pollution

– Environmental Kuznets curve
– Pollution tax
– Severity of industrial pollution-
impact on health
Environmental Kuznets Curve
Problems of congestion, Clean
water and Sanitation

– High health and economic costs

associated
– Drag on development
– Impact on poor
– Private wells have led to land
subsidence and flooding
– Impact on export earnings
The Local Costs
of Rain Forest
Destruction
The Local Costs of Rain Forest
Destruction
Many scientists are alarmed by recent
evidence regarding greenhouse gases
Economists also are concerned with the
costs of global climate change
Rainforest preservation as a global public
good- a restorative mechanism for the
environment
Sustainable management of rain forests
Reduction of trade barriers to promote
developing country exports
Provide funds, debt relief (not aid) to help
enhance biodiversity
Policy Options in
Developing and
Developed
Countries
Policy Options in Developing and
Developed Countries

What Developing Countries can do

– Proper resource pricing
– Community involvement
– Clearer property rights and resource
ownership
– Improved economic alternatives for the poor
– Improved economic status of women
– Industrial emissions abatement policies
– Proactive stance toward adapting to climate
change
Policy Options in Developing and
Developed Countries
How developed countries can help
Developing Countries?
– Trade policies: barriers, subsidies
– Debt relief and debt for nature swaps
– Development assistance

What developed countries can do for the

environment
– Emissions controls
– Research and Development
– Import restrictions on unsustainable
production
 UNITED NATIONS ENVIRONMENTAL PROGRAMME (UNEP) AND THE
1988 WORLD METEOROLOGICAL ORGANIZATION (WMO) ESTABLISHED THE
INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE (ipcc)

1990 Intergovernmental Panel on Climate Change (IPCC) did indeed

create its First Assessment Report on climate change

1992 The establishment of the United Nations Framework

Convention on Climate Change (UNFCCC)

1997 The Kyoto Protocol, as an international treaty

aimed at reducing greenhouse gas emissions

2014
The 5th Assessment Report (AR5) of the IPCC is a
comprehensive study on climate change
Thank
You
 Quiz 1. The
ENVIRONMENT AND
DEVELOPMENT
Is this an example of public
goods or public bads?

1. The government has built a new public park
with playgrounds, walking trails, and green
spaces accessible to all residents of a city.
This park helps improve air quality and
provides a recreational area for the
community.
Is this an example of public
goods or public bads?


2. A factory in a rural area is releasing

pollutants into the nearby river, affecting
the water quality for the surrounding
communities and harming local wildlife.
Is this an example of public
goods or public bads?


3. The local government has implemented a

new public transportation system, reducing
traffic congestion and lowering carbon
emissions in the city.
Is this an example of producer
or consumer surplus?

4. A local farmer sells organic vegetables at
the farmer's market. Due to a sudden
increase in demand for organic produce, the
market price rises from ₱3 to ₱5 per pound.
What economic benefit does the farmer
experience due to the price increase?
Is this an example of producer
or consumer surplus?

5. A tech company releases a new
smartphone model that becomes extremely
popular, driving down the price of previous
models from ₱700 to ₱500. What economic
benefit do the consumers experience from
the price reduction of the older models?
Is this an example of producer
or consumer surplus?

6. A government subsidy on electric cars
reduces their market price from ₱40,000 to
₱35,000, encouraging more consumers to
purchase them. What economic benefit do
the new car buyers experience due to the
subsidy?
Is this an example of GLOBAL
WARMING OR CLIMATE CHANGE?


7. A city is experiencing hotter summers with

more frequent and intense heat waves. What
term best describes this specific
phenomenon?
Is this an example of GLOBAL
WARMING OR CLIMATE CHANGE?

8. Farmers are noticing that their planting
seasons have become unpredictable, with
some years having too much rain and others
having prolonged droughts. What term best
describes this broader set of changes?
Is this an example of GLOBAL
WARMING OR CLIMATE CHANGE?


9. Polar ice caps are melting at an

accelerated rate, leading to rising sea levels.
What term best describes the cause of this
phenomenon?
Is this an example of GLOBAL
WARMING OR CLIMATE CHANGE?


10. An increase in severe weather events,

such as hurricanes, floods, and droughts, is
being observed over several decades. What
term best describes this overall trend?
Is this an example of GLOBAL
WARMING OR CLIMATE CHANGE?


11. Ocean temperatures are rising, causing

coral bleaching and affecting marine life.
What term best describes this specific
increase in ocean temperatures?
Is this an example of FREE RIDER
PROBLEM OR EXTERNALITY?

12. A community installs a new public park
that everyone can enjoy, regardless of
whether they contributed to its funding or
maintenance. Some residents choose not to
donate money or volunteer time, but still use
the park regularly. What economic term best
describes this situation?
Is this an example of FREE RIDER
PROBLEM OR EXTERNALITY?

13. A factory releases pollutants into a river,
which negatively affects the health and
livelihoods of nearby residents who rely on
the river for drinking water and fishing.
What economic term best describes this
situation?
Is this an example of Optimal resource
allocation over time or Allocative
efficiency

14. A market reaches a point where the

quantity of goods produced matches
consumer demand, ensuring that resources
are allocated to produce the optimal mix of
goods and services. What economic concept
does this situation exemplify?
Is this an example of Optimal resource
allocation over time or Allocative
efficiency


15. A city government invests in upgrading its
public transportation infrastructure to
reduce traffic congestion and improve air
quality in the long term. What economic
concept does this decision exemplify?
Thank
You