For centuries, societies have strongly depended on their economies for the societies’ financial well being. These economic systems simply place an importance on satisfying the people and their needs or wants through products and services. These economic systems support themselves through three types of resources: Natural capital, human capital, and manufactured capital. A Natural capital simply refers to the resources received directly from the environment. Not only does this include resources, but natural services too, such as chemical cycling, and water purification. Second, human capital refers to the input humans such as physical labor, and mental capabilities. Lastly, manufactured capital/ resource refers to the technology used by humans to design or construct products. With this countries sudden boost in supply and demand over the past few decades, the need for resources has increased as well. The one resource most impacted by human’s desire to promote economic growth, is natural capital. This chapter demonstrates the opinions of many economists and their perspectives on our natural resources, and the success of the economy.
In most recent years, human’s impact on the environment has become more evident and severe. Our exploitation of natural resources has introduced a variety of environmental issues that can and will easily influence the lives of future generations. It is obvious that some natural resources can be renewed, but with the pace humans use these resources, they will soon diminish or become scarce. As environmental issues such as climate change, and pollution becomes more prevalent, more companies or industries are becoming more aware of their impact on the environment. However, unfortunately, for many of these money driven corporations, the well being of the environment and the future is irrelevant. This type of perspective may be understandable if their approach to selling products and services was more honest. In other words, as the chapter stated, if companies were more honest about the production of their services or products, people will become more aware of its detrimental effects towards the environment. This type of dishonesty refers to the hidden costs of products. Many environmental economist believe that companies should be obligated to include the price of every single resource/ labor used to create products. This, of course, will be more costly for companies, and this will quickly influence the decrease in clients or customers. In class, we discussed an example of this hidden cost production of goods. A hamburger in most fast food locations usually cost less than five dollars. However, this products and its price does not accurately reflect the costs of everything that went into the production of the burger. Considering the water and carbon footprints, and green house gas emission, this product should cost around fifteen to twenty dollars. This is an obvious sign of resource exploitation and it emphasizes our ignorance towards the limited amount of natural resources we have. (no natural resource is unlimited). Also, in recent years, many analyst have advised to encourage economic development, but in a way that will promote environmentally sustainable methods.
One of the most important points made in Chapter 23, that I believe is important to understand, especially if we are encouraging economic development that uses more sustainable methods, is the wealth gap between the poor and the rich. Many people who live in poverty in less developed countries suffer from the negative impacts on their environment. In other words, by focusing on these less privileged countries, we would be able to promote the expansion of sustainable communities. For example, people who live in poverty suffer from the diseases present in their environment. Also, due to these people’s lack of healthy living conditions, most of them are located in very polluted areas. By investing a money in these areas, these people can be provided with an education, resources such as family planning to control the population growth, energy efficient transportation, and most importantly, jobs that encourage people to practice sustainable ways of living, such as recycling.
In relation to this issue of poverty, a case study presented in the reading that I found very interesting and admirable is the involvement of Muhammad Yunus with the impoverished communities of Bangladesh. Yunus introduced microloans to the poor communities. He granted this opportunity to, especially women, in order to provide a minor financial boost in order to help certain people’s circumstance. Besdies allowing people to open small businesses, but by providing these people with this opportunity, many people were able to afford means of transportation that are eco friendly. These modes of transportation would allow people to collect recyclable materials for money. With these small investments in impoverished communities, any sustainable methods of living are quickly implemented and practiced.
For most environmental economists, the government should be required to implement certain policies that can promote sustainable methods of production for most industries. Some of the most commonly proposed ways in which the government should be involved with industries is by encouraging corporations to commit to full cost pricing, incentives with tax breaks and subsidies, and preservation of open access natural resources. Like mentioned in the previous paragraphs, full cost pricing encourages corporations to include all the hidden costs of products in the total value; this includes mentioning the price of the damage they did to the environment to design and construct the service or product. Next, the government should pose taxes or subsidies to limit and control the exploitation of natural resources. Lastly, and most importantly, in my opinion, it is essential for the government to intervene with social matters that involve open access resources. For example, due to the ocean and air being open to everyone, many will take advantage and exploit these resources, therefore, the government should devise policies that sets limits and boundaries on the usage of these open access resources.
In one of the case studies presented in class, an organization called Greenpeace works preserve and protect many environmental resources. Due to the difficulty of implementing policies because of the long processes, this organization works to directly expose the impact humans have on the environment. What interested me was that this organization is aiming to protect at least forty percent of the ocean, and currently only two percent of it is protected now.
The government does not pay close attention to the impact industries have on the environment. As a nation, most of our priorities revolve around increasing our production of goods and wealth. Therefore, industry regulation is considered a last priority. Also, the same wealth is used to gain certain advantages or opportunities wealth is also used to attack environmental laws and regulation. In other words, like I mentioned before, our priorities are not well ordered (wealth- priority), and wealthy people or corporations are able to afford paying their way around environmental regulations.
How effective is it to estimate the monetary value of resources if it does not accurately reflect the price / impact we have on the environment’s resources?
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