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Environmental Economics Issues - Assignment Example

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The assignment "Environmental Economics Issues" focuses on the critical analysis of the major disputable issues concerning environmental economics. In the current world, one faces dynamic issues that tend to improve our economies or otherwise destroy them…
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Environmental Economics Issues
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Introduction In the current world, we are faced with dynamic issues that tend to improve our economies or otherwise destroy them. While doing so, people tend to ignore the fact that our environment needs to be pampered with the very seriousness that we take on matters that bring about positive economic development. There is therefore a greater need to integrate the spirit of environmentalism in every aspect of development to eventually bring about a sustainable world. There is therefore need to value our environmental systems. This has been made possible by the creation of environmental economics which serves to deal with such issues. People have associated natural resources as the basic elements for the production of basic commodities such as mineral products, fishing and forestry. For this reason, there is a greater need to value these resources in a bid to limit their use and bring sustainability in their utilization (Elibrary.worldbank.org, 2015). Environmental economics brings about a myriad of concepts that include green economy and green growth. A green economy is one that aims at bettering the lives of human beings, bringing about social equity while reducing environmental risks significantly. This entails the need to facilitate growth that is driven by private and public investments that serve the purpose of reducing pollution and carbon emissions, enhancing the efficiency of national resource utilization and prevention of ecosystem loss and biodiversity. It is also important to note that a green economy serves to support the concept of sustainability (Kettunen and ten Brink, 2012). Green growth on the other hand entails the overall strategies that serve the purpose to describe a way in which growth in the economy integrates the use of natural resources sustainably (Publishing, 2014). To make the concept of green economy a reality, it is paramount that we inculcate important aspects and conditions. This includes national regulations, policies, incentives and subsidies, international markets, trade and aid protocols. In this paper, we discuss one of the distinctive issues where providing public environmental goods represents a priority. The Main focus is on the need to provide natural capital and resources. This is a delicate matter because when it comes to dealing with natural resources such as forests, there is need to ensure that while utilizing the resource, we should put into consideration its overall implications and thus be at a position of dealing with issues as they arise, either positive or negative (Lanoie, 2011). There is need to understand that a green economy does not only serve the purpose of bringing into light the value of the natural capital but also to serves to improve on this natural capital for an economic progress that is sustainable. For example, when we expel deforestation in our forests and increase the reforestation, we demonstrate a good economic sense since forests serve to support the well beings of human beings in a myriad of ways. It is therefore paramount that we integrate important economic foundations while dealing with the natural capital. This will ensure that we get optimum profits and gains in the management and use of natural resource. It is therefore justified to say that a green economy serves the purpose of recognizing the value of natural capital and the need to invest in it (Lanoie, 2011). Economic instruments put into use the market mechanisms to deal with environmental problems and challenges that would otherwise wreak havoc to the sustainability of the world if it were to be left unattended. The economies instruments can be put into broad categories that include the use of fiscal instruments, market creation, charge systems, property rights, liability instruments, financial instruments and the provision of performance bonds and deposit refund systems. In the process of dealing with our biodiversity, we have undervalued our natural resources mostly in the markets. This is mainly in the form of providing public goods and services that come from these natural resources. This concept is bases on the economic foundation of achieving a green economy. Managing and regulating or natural resources such as forests and fisheries is important since they serve to provide services such as water and air quality regulation. These are public goods that are limited and with no markets which are not valued by the normal economic system. For this reason, their loss is normally ignored and taken for granted. This doe not only bring impact to us human beings but also to the general sustainability of our economic systems. There is therefore a need to analyze the above economic theory and instruments that can be used to address the above issue. When it comes to dealing with forestry and fisheries, there i need to ensure that habitat destruction, soil erosion and depletion of the resources is minimal. This then leads to the application of economies instruments and theory that would bring the concept of a green economy into reality. The fiscal instruments can be used to bring a connection between the private and social benefits. There is need to create a value in the depletion of resources. This will entail charging the offender of the pollution caused to the environment. Environmental taxing entails the taxes that come about with the use of a specific resource. This includes setting standards that provide a basis for the taxes to be equally valued to the environmental damage and level of pollution. Another form of taxation entails a tax in the inputs and a final product this includes taxes in the finished products such a fuels, timber and fish products. Others include tax credit incentives offered by the governments in a bid to control and minimize the polluters of the environment and natural resources (UNEP, 2004). Property rights is based on the fact that there is immense depletion of the resources and environmental degradation arising from the price signals that are misled which eventually results in the absence of markets t in environmental assets and resources. The main idea in this is that when proper property rights are set, the resources then become scarce and thus eventually become valuable. This method serves to control the use of resources, confining the use to only the people that are allowed to access the property. Secure property rights will eventually lead to the actual reflection of the prices of the resources in question to the resource depletion costs. This then leads to the need for an efficient practice in their use (UNEP, 2004). Property rights may lead to resource markets coming into play, which will eventually be competitive. This method then serves to be overly significant as it goes to the core of the problem and relies on the government to use policies and laws to enforce this economic instrument. It is also important to note that property rights are do not serve to completely protect the environment but act as a way to limit the activities done within the area. Another economic instrument is market creation. This is due to the need for creation of market in which the waste sinks is assigned prices and traded. Provision of few environmental use rights would lead to a more controlled and rational use of resources. This is because the more the resource is used, the more costly it becomes. Trading right would ensure that the optimum results come by from the use of the scarce resources. Examples of market creations include tradable emission permits, tradable development quotas and tradable water shares. Charge systems are the payments made for the use of resources and infrastructure and services. This serves to put a value to the environment by the payments made in the access to these resources. Financial instruments are special funds channeled for environmental protection and resource conservation. Such funds include green funds, revolving funds, subsidies interests or soft loans and relocation incentives. Liability systems serve to bring about a responsible behavior among the users of natural resources. Subsidies are also a tool used when it comes to dealing with the control of incentives. This can help people to adapt the use of environmental friendly technology to protect the natural capital to be depleted. The subsidies made in such products enable the population to acquire better alternatives which are energy efficient. It is therefore distinct that the above economic instruments serve a purpose of encouraging the public to use environmentally friendly goods. This is to serve s greater purpose of environmental conservation and protection. They also minimize the pollution as the polluters come to terms with the expenses that may incur when they deplete the natural environment, in this case referred to as the natural capital. Environmental instruments have been widely used to address a myriad of environmental problems which range from protection of biodiversity and sustainable land use practices to pollution control and solid waste management mental problems . In this case of provision or conservation of, natural capital or resource, environmental instruments have brought about varying degrees of success. There is therefore a need to implement policies and regulations that will serve to ensure that the above economic instruments are totally adapted and put into proper use (UNEP, 2004). Some of the above environmental instruments double up as environmental policies that can be used to conserve and maintain the natural capital and resources. These include payments for environmental services and provision of unconditional incentives. The success of these policies is overly dependent on total coordination among all the relevant stakeholders to making this concept of a green economy a success. Legal authorities are totally important and serve a greater role of ensuring the effectiveness s of the economic instruments. Gaps in the local authorities can be quite detrimental to the environmental instruments. Weak government bodies and institutions would lead to failure in the application of market based instruments. This is because people will see that they can carry out their businesses by evading taxes and purchase of permits. This therefore means that strong policies should be put in place which will ensure that the natural capital and resources are sustainably used. These economic policies include performance standards. Others include cap and trade permit systems such as fishing quotas and nutrient water trading. This will ensure the sustainable fishing practices thus bringing about moderation in the fishing industry (UNEP, 2004). Subsidies will also serve a greater purpose of ensuring that people purchase environmental friendly products, which will eventually lead to the conservation and management of forests. In general, these policies revolve around valuation of the natural resources which then ensures that a sustainable environment is seen as a part of the economic development in a nation or state. Setting regulations and standards by the governing bodies will then serve the general purpose of addressing these important issues. Moreover, proper innovation policies, trade and international investment policies will serve the purpose of designing a proper green growth strategy thus bringing about sustainable development. To illustrate some of the above policies and instruments, it is paramount that we venture into real life scenarios. This will include the need to analyze the case study of Philippines. Philippines have adopted the use of economic policy instruments when it comes to the forestry sector. There was a great increase in the depletion of forests in the Philippines. People found their way in the forested zones and eventually made homes for their selves there. This raised a great alarm since the forest, Makiling forest reserve to be specific, served as a watershed for most of the population in Philippines. In the past, the Makiling forest reserve existed in a way in which there was no valuation for any of the resources. This resulted into great implications such as resource depletion and degradation. The uncontrolled exploitation of the forest resource prompted the need to act with urgency using economic policies that would otherwise bring a change to the detrimental effects of the inhabitants. Therefore, there was a need to act with urgency to bring about a full cost resource pricing method that will bring about optimum resource use (UN, 1999). Mount Makiling forest reserve is important resource due to its richness in biodiversity, recreational, educational, existence of a watershed geothermal and other important scientific values for the people of Philippines. The ultimate solution in this case was to grant the existing farmers property rights. This was done so as to create an incentive for them to adapt sustainable behavior that would lead to control. This means that the settlers had to comply with the property rights or otherwise face eviction or get charged for their overutilization of the natural capita and resources. Moreover, they also established levies and fees in a bid to protect the reserves. This involved providing credits to the farmers for sustainable farming practices and a pricing mechanism for the watershed. For this reason, the farmers had to comply by the regulations set to avoid being charged and to gain financially from their sustainable livelihoods and farming practices (UN, 1999). Bangladesh has adopted the integrated of pest management to control harmful pets and weeds. This served the purpose of reducing the health hazards to the environment that would otherwise lead to the overall destruction of the environment. This brought about lower productions since chemicals boost high productions. Moreover, the overall profitability is eventually reduced due to the low levels of production. Nevertheless, the above natural way of pest control is a mode of incentive that the government brings to prevent damage to the environment. Moreover, it doubles up as subsidies to the farmers since acquiring chemicals is quite expensive. These therefore come out as economic policies and instruments that have served the purpose of bringing about sustainable land use and protection of the ecosystem from pollution. From the above case studies, we can distinctly see policies such as granting of property rights and financing have been successfully applied to bring about not only a green economy to Philippines but also allow for sustainable development. This is also seen in Bangladesh where farmers have been given a nature friendly and cheaper way of dealing with pests compared to the use of chemicals. From these findings, we can see that on the need to achieving a total green economy, we have to integrate important aspects of green growth to the sustainable development of a nation. Therefore, there is need to value our natural ecosystems by adopting mechanisms that will allow for them to be valued as important resources that bring about economic development of a country or state. This has been made possible by the creation of economic instruments such as subsidies, taxes on pollution, payments for ecosystem services and performance standards. These with proper environmental economic policies have proven quite successful in the provision of resources and natural capital. This then brings to light the aspects of a green economy due to the significant decrease of environmental hazards and problems. This concept of economic policies and instruments has been proven to be quite useful in the case study of Philippines where some of the elements have been practically applied. We can therefore conclude that the road to sustainability entails that we factor in important elements to our economy. This will eventually provide nations and cities that are totally cleansed off pollution and unsustainable resource use due to the adoption of green growth mechanisms to eventually achieve a green economy. References Anon, (2015). [Online] Available at: http://www.oecd.org/greengrowth/48224539.pdf [Accessed 13 Apr. 2015]. Dasgupta, S., Wheeler. and Meissner. (2007). Is environmentally friendly agriculture less profitable for farmers? Evidence on integrated pest management in Bangladesh. Applied Economic Perspectives and Policy. pp.29(1), pp.103–118. Elibrary.worldbank.org, (2015). [online] Available at: http://elibrary.worldbank.org/doi/pdf/10.1596/1813-9450-5872 [Accessed 13 Apr. 2015]. Lanoie, P. (2011). The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness? Resources for the Future. Washington D.C., USA. Unep.org, (2015). UNEP - Green Economy Initiative - Home. [online] Available at: http://www.unep.org/greeneconomy [Accessed 13 Apr. 2015]. van der Linde, C. (1995). Toward a New Conception of the Environment-Competitiveness Relationship, Journal of Economic Perspective. pp.9(4), 97–118. 47. Kettunen, M. and ten Brink, P. (2012). Nature, green economy and sustainable development: The outcomes of UN Rio+20 Conference on Sustainable Development. NC, 2, pp.1-6. Publishing, O. (2014). OECD Green Growth Studies Green Growth Indicators for Agriculture. Paris: OECD Publishing. UN. (1999). Economic Instruments for the Sustainable Management of Natural Resources A Case Study on the Philippines’ Forestry Sector. New York and Geneva: UNITED NATIONS UNEP, U. (2004). The use of economic instruments in environmental policy: opportunities and challenges. UNITED NATIONS PUBLICATION. Read More
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