Environmental Economics Online Test 12th Economics Lesson 8 Questions in English

Environmental economics (EE) is the study of interactions between human economic activity and the natural environment.

EE is the subset of economics that is concerned with the efficient allocation of environmental resources. The environment provides both a direct value as well as raw material intended for economic activity, thus making the environment and the economy interdependent.

EE takes into consideration issues such as the conservation and valuation of natural resources, pollution control, waste management and recycling.

The key objective of EE is to identify the particular tools or policy alternatives that will move the market towards the most efficient allocation of natural resources. Resources uses whether human, natural, or monetary are finite these public policies are most effective only when they achieve the maximum possible benefit in the most efficient way.

The term environment has been derived from a French word “Environia” means to surround. Environment means “all the conditions, circumstances and influences surrounding and affecting the development of an organism or group of organisms”.

It is a different branch of economics that recognizes the value of both the environment and economic activity and makes choices based on those values. The goal is to balance the economic activity and the environmental impacts by taking into account all the costs and benefits.

In short, Environmental Economics is an area of economics that studies the financial impact of environmental issues and policies.

Environmental Economics involves theoretical and empirical studies of the economic effects of national or local environmental policies around the world.

An ecosystem includes all living things (plants, animals and organisms) in a given area, interacting with each other, and also with their non-living environments (weather, earth, sun, soil, climate, atmosphere). Ecosystems are the foundations of the Biosphere and they determine the health of the entire earth system.

Man’s life is interconnected with various other living and non-living things. The life also depends on social, political, ethical, philosophical and other aspects of economic system.

In fact, the life of human beings is shaped by his living environment. The relationship between the economy and the environment is generally explained in the form of a “Material Balance Model’’ developed by AlenKneese and R.V. Ayres.

The model considers the total economic process as a physically balanced flow between inputs and outputs.

Inputs are bestowed with physical property of energy which is received from the environment. The interdependence of economics and environment.

The first law of thermodynamics, the law of conservation of matter and energy, emphasizes that in any production system “what goes in must come out”. This is known as the Material Balance Approach or Material Balance Principle.

The material flow diagram implies that mass inputs must equal mass outputs for every process. Moreover, all resources extracted from the environment eventually become unwanted wastes and pollutants.

Production of output by firms from inputs resulting in discharge of solid, liquid and gaseous wastes. Similarly, waste results from consumption activities by households. In short, material and energy are drawn from environment, used for production and consumption activities and returned back to the environment as wastes.

In its simple form the Material Balance Approach can be put in form equation.

Environment is the supplier of all forms of resources like renewable and non-renewable, and it is also acting as a sink for cleaning up of wastes. Households and firms are connected to environment, and they are interconnected too. Households and firms depend on nature for resources. Both households and firms send out residuals of consumption and production respectively to nature.

Nature has the power to assimilate all forms of waste. But this power is conditional. There is a limit for everything. The earth has reached the saturation point and it is unable to cleanup several forms of wastes.

Environmental goods are typically non-market goods, including clear air, clean water, landscape, green transport infrastructure (footpaths, cycle ways, greenways, etc.), public parks, urban parks, rivers, mountains, forests, and beaches.

Concerns with environmental goods focus on the effects that the exploitation of ecological systems have on the economy, the well-being of humans and other species, and on the environment.

Environmental quality is a set of properties and characteristics of the environment either generalized or local as they impinge on human beings and other organisms. It is a measure of the condition of an environment relative to the requirements of one or more species and to any human need.

Environmental quality has been continuously declining due to capitalistic mode of functioning. Environment is a pure public good that can be consumed simultaneously by everyone and from which no one can be excluded.

A pure public good is one for which consumption is non-revival and from which it is impossible to exclude a consumer. Pure public goods pose a free rider problem. As a result, resources are depleted.

The contribution of the nature to GDP as well as depletion of natural resources is not accounted in the present system of National Income Enumeration.

In Environmental Economics, one of the most important market failures is caused by negative externalities arising from production and consumption of goods and services.

Externalities are third party effects arising from production and consumption of goods and services for which no appropriate compensation is paid. Externalities occur outside of the market i.e. they affect people not directly involved in the production and consumption of a good or service. They are also known as spill-over effects.

Externalities refer to external effects or spillover effects resulting from the act of production or consumption on the third parties. Externalities arise due to interdependence between economic units.

Externality may be defined as “the cost or benefit imposed by the consumption and production activities of the individuals on the rest of the society not directly involved in these activity and towards which no payment is made”.

The externalities arise from both production and consumption activities and their impact could be beneficial or adverse. Beneficial externalities are called “positive externalities” and adverse ones are called “negative externalities”.

Positive Consumption Externality: When some residents of a locality hire a private security agency to patrol their area, the other residents of the area also benefit from better security without bearing cost.

Negative Consumption Externality: A person smoking cigarette gets may give satisfaction to that person, but this act causes hardship (dissatisfaction) to the non-smokers who are driven to passive smoking.

Positive Production Externality: The ideal location for beehives is orchards (first growing fields). While bees make honey, they also help in the pollination of apple blossoms. The benefits accrue to both producers (honey as well as apple). This is called ‘reciprocal untraded interdependency.

Negative production externalities include pollution generated by a factory that imposes costs on others. The emissions and effluents of factory cause air and water pollution. Water becomes contaminated and unfit for drinking e.g. Tanneries. The innocent community bears the external cost for which it is not compensated.

Pollution is the introduction of contaminants into the natural environment that causes adverse change, in the form of killing of life, toxicity of environment, damage to ecosystem and aesthetics of our surrounding.

Types of Pollution: Air pollution, Water pollution, Noise pollution, Land pollution

“Air pollution is the presence of any solid, liquid, or gaseous substance in the atmosphere in such concentration as may be or tend to be injurious to human beings or other living creatures or plants or property or environment”.-The Air (Prevention and Control of Pollution) Act, 1981

Indoor Air Pollution: It refers to toxic contaminants that we encounter in our daily lives in our homes, schools and workplaces. For example, cooking and heating with solid fuels on open fires or traditional stoves results in high levels of indoor air pollution. Outdoor Air Pollution: It refers to ambient air. The common sources of outdoor air pollution are caused by combustion processes from motor vehicles, solid fuel burning and industry.

Causes of Air Pollution: Vehicle exhaust smoke, Fossil fuel based power plants, Exhaust from Industrial Plants and Factories, Construction and Agricultural activities, Natural Causes, Household activities

Depletion of Ozone layer: Ozone exists in earth’s atmosphere and is responsible for protecting humans from harmful ultraviolet (UV) rays. Earth’s ozone layer is depleting due to presence of chlorofluorocarbons and hydro chlorofluorocarbons in the atmosphere.

Every day about 93% of the world’s children under the age of 15 (1.8 billion children) breath polluted air that puts their health and development at serious risk – WHO

Remedial measures to control Air Pollution
1. Establishment of industries away from the towns and cities
2. Increasing the length of the Chimneys in industries
3. Growing more plants and trees
4. Use of non-conventional fuels like Biogas, CNG and LPG. 5. Use of Mass Transit System (Public Transport)

“The introduction (directly or indirectly) of substances or energy into the marine environment (including estuaries) results in deleterious effects to living resources hazards to human health, hindrance to marine activities.- United Nations, 1971

Types of Water Pollution: i. Surface water pollution ii. Groundwater pollution iii. Microbiological pollution iv. Oxygen depletion pollution

Microbiological pollution: In many communities around the world, people drink untreated water (straight from a pond, river or stream). Sometimes there is natural pollution caused by micro-organism like viruses and bacteria. This natural pollution causes both aquatic and human illness

Causes of Water Pollution:
Discharge of sewage and waste water, Dumping of solid wastes, Discharge of industrial wastes, Oil Spill, Acid rain, Global warming and Eutrophication.

Acid rain: Acid rain is pollution of water caused by air pollution. When the acidic particles caused by air pollution in the atmosphere mix with water vapor, it results in acid rain.

Eutrophication: Eutrophication is an increased level of nutrients in water bodies. This results in bloom of algae in water. It also depletes the oxygen in water which negatively affects fish and other aquatic animal population.

Water pollution adversely affects the health and life of man, animals and plants alike. Polluted water is also harmful for agriculture as it adversely affects the crops and the soil fertility.

Pollution of sea water damages the oceanic life. The effects can be catastrophic, depending on the kind of chemicals, concentrations of the pollutants. The effects of water pollution are varied and depend on what chemicals are dumped and in which locations.

Many water bodies near urban areas are highly polluted. This is the result of both garbage dumped by individuals and dangerous chemicals legally or illegally dumped by manufacturing industries, health centers and markets.

Remedial measures to control Water Pollution:
1. Comprehensive water management plan.
2. Construction of proper storm drains and settling ponds.
3. Maintenance of drain line.
4. Effluent and sewage treatment plant.
5. Regular monitoring of water and waste water.
6. Stringent actions towards illegal dumping of waste into the water bodies.

Noise pollution is unwanted or excessive sound that can have deleterious effects on human health and environmental quality. Noise pollution is commonly generated by many factories. It also comes from highway, railway and airplane traffic and from outdoor construction activities. -Jerry A. Nathanson and Richard E. Berg, 2018

Types of Noise Pollution: Atmospheric Noise, Industrial Noise and Manmade Noise

Industrial Noise: Industrial noise refers to noise that is created in the factories. Sound becomes noise it becomes unwanted. Heavy industries like ship building, iron and steel have long been associated with Noise Induced Hearing Loss (NIHL).

Causes of Noise Pollution: Poor urban planning, Sounds from motor vehicles, Crackers and Factory machinery.

Effects of Noise Pollution: Damage Physiological and Psychological health: Unwanted noise can damage physiological and psychological health. For example annoyance and aggression, hypertension and high stress levels.

Remedial measures to control Noise Pollution
1. Use of noise barriers 2. Newer roadway for surface transport 3. Traffic control 4. Regulating times for heavy vehicles 5. Installations of noise barriers in the work place 6. Regulation of Loudspeakers

The land pollution is defined as, “the degradation of land because of the disposal of waste on the land”. Any substance (solid, liquid or gaseous) that is discharged, emitted or deposited in the environment in such a way that it alters the environment causes land pollution–Protection of the Environment Operations Act 1997

Types of Land Pollution:
i. Solid waste: It includes all kinds of rubbish like paper, plastic containers, bottles, cans, food, used cars, broken electronic goods, municipal waste and hospital waste.
ii. Pesticides and Fertilizers: Many farming activities engage in the application of fertilizers, pesticides and insecticides for higher crop yield which pollute land.
iii. Deforestation: Humans depend on trees for many things including life. Trees absorb carbon dioxide from the air and release Oxygen, which is needed for life.

Causes of Land Pollution: Deforestation and soil erosion, Agricultural activities, Mining activities, Landfills, Industrialization, Construction activities and nuclear waste.

Effects of Land Pollution: Soil pollution, Health Impact, Cause for Air pollution and Effect on wildlife.

Remedial measures to control Land Pollution:
1. Making people aware about the concept of a Reduce, Recycle and Reuse
2. Buying biodegradable products
3. Minimizing the usage of pesticides
4. Shifting cultivation
5. Disposing unwanted garbage properly either by burning or by burying under the soil.
6. Minimizing the usage of plastics

Global warming is the current increase in temperature of the Earth’s surface (both land and water) as well as its atmosphere. Average temperatures around the world have risen by 0.75ºC (1.4ºF) over the last 100 years. About two thirds of this increase has occurred since 1975

Carbon dioxide, methane, Chlorofluoro Carbon, nitrous oxides are the greenhouse gases warming the earth’s surface. So it is also called greenhouse effect.

The CO2 is the most important of the greenhouse gases contributing to 50% of global warming. The burning of fossil fuel, and other biomass, deforestation result in CO2. In the past, when the Earth experienced increases in temperature it was the result of natural causes but today it is being caused by human activities.

Global warming adversely affects agriculture, horticulture and eco system. Reduced rainfall, higher temperature and increased pest/weed growth hamper farming. Threats to health arise due to increase in disease carrying vectors such as mosquitoes resulting in malaria, dengue fever, encephalitis and yellow fever.

The climate change refers to seasonal changes over a long period with respect to the growing accumulation of greenhouse gases in the atmosphere. Recent studies have shown that human activities since the beginning of the industrial revolution have contributed to an increase in the concentration of carbon dioxide in the atmosphere by as much as 40%, from about 280 parts per million in the pre-industrial period, to 402 parts per million in 2016 which in turn has led to global warming.

Several parts of the world have already experienced the warming of coastal waters, high temperatures, a marked change in rainfall patterns, and an increased intensity and frequency of storms. Sea levels and temperatures are expected to be rising.

Acid rain is one of the consequences of air pollution. It occurs when emissions from factories, cars or heating boilers contact with the water in the atmosphere. These emissions contain nitrogen oxides, sulphur dioxide and sulphur trioxide which when mixed with water becomes sulfurous acid, nitric acid and sulfuric acid.

Acid rain also occurs by nature through volcanic eruptions. It can have harmful effects on plants, aquatic animals and infrastructure.

Electronic waste which is commonly referred as “e-waste” is the new byproduct of the Info Tech society. It is a physical waste in the form of old discarded, end of life electronics. It includes a broad and growing range of electronic devices from large household appliances such as refrigerators, air conditioners, cellular phones, computers and other electronic goods.

Solid Waste is basically discharge of useless and unwarranted materials as a result of human activity. Most commonly, they are composed of solids, semisolids or liquids. Solid wastes consist of the discards of households, hospital refuse, dead animals, debris from construction site, ashes, agricultural wastes and industrial wastes etc.

Sustainable development is concerned with the welfare of not only present generation but also future generation. It aims at not only satisfying the luxury wants of the upper class i.e. rich but also the basic necessities of the poor like food, sanitation, health care, education etc.

The present generation should not exhaust the resources left by the past generation, but it should leave the same for the sake of future generation. This is called inter – generational equity.

“Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs” -World Commission on Environment and Development, 1987

“The alternative approach (to sustainable development) is to focus on natural capital assets and suggest that they should not decline through time.” -Pearce, Markandya and Barbier, 1989

It is crucial to harmonize three core elements such as economic growth, social inclusion and environmental protection.

A set of 17 goals for the World’s future can be achieved before 2030 with three unanimous principles fixed by United Nations such as Universality, Integration and Transformation

Today, number of organizations, businesses and people across the globe that are striving for sustainability and more eco-friendly lifestyles is increasing. They are passionate towards protecting the Earth – the only life support system we have. Hence, we should bring about change through political lobbying, citizen action and consumer pressure. And we should take peaceful direct action to protect this fragile planet and promote the solutions for a green and peaceful future. Since the globe warming is a globe problem, the polluters, namely developed countries, should be made to pay for the pollution control efforts

Organic farming is a system of agricultural production which relies on animal manure, organic waste, crop rotation, legumes and biological pest control. It avoids use of synthetic fertilizer, pesticides and livestock additives. Organic inputs have certain benefits, such as enriching soil for microbes.

Organic production is a holistic system designed to optimize the productivity and fitness of diverse communities within the agro-ecosystem, including soil organisms, plants, livestock and people. The principal goal of organic production is to develop enterprises that are sustainable and harmonious with environment.

The general principles of organic farming are:1. Protect the environment, minimize soil degradation and erosion, decrease pollution, optimize biological productivity and promote a sound state of health. 2. Maintain long-term soil fertility by optimizing conditions for biological activity within the soil. 3. Maintain biological diversity within the system 4. Recycle materials and resources to the greatest extent possible within the enterprise.

Nearly 50 percent of the irrigated land in the arid and semi-arid regions has some degree of soil salinization problems. The occurrence of accumulation of excess salt acid in the root zone, results in a partial or complete loss of soil productivity and such soil is defined as ‘Problem (alkali, saline & acid) Soils’ and exist mainly in arid and semi-arid regions.

The alkali soils are predominantly located in the Indo-Gangetic plains encompassing States of Punjab, Haryana, Uttar Pradesh, Bihar and partly in States like, Chhattisgarh, Rajasthan, Andhra Pradesh, Gujarat, Maharashtra, Karnataka, Andhra Pradesh, Madhya Pradesh and Tamil Nadu.

Trees contribute to their environment by providing oxygen, improving air quality, climate amelioration, conserving water, preserving soil and supporting wildlife.

During the process of photosynthesis, trees take in carbon dioxide and produce the oxygen we breathe. So trees are considered to be the lungs of the earth.

Natural forests and tree plantations improve the water cycle in diminishing runoff and improving the replenishment of the water table.

A seed ball (or seed bomb) is a seed that has been wrapped in soil materials, usually a mixture of clay and compost, and then dried. Essentially, the seed is ‘pre-planted’ and can be sown by depositing the seed ball anywhere suitable for the species, keeping the seed safely until the proper germination window arises. Seed balls are an easy and sustainable way to cultivate plants that provide a larger window of time when the sowing can occur.