17 Action for sustainability John Tribe John Tribe

17 Action for sustainability © John Tribe

Learning outcomes • By studying this section students will be able to: – explain the meaning of sustainable development – understand the limitations of the price mechanism in allocating resources in respect of environmental considerations – utilize different instruments for encouraging sustainability and environmental consideration – evaluate a variety of methods to impute value to unpriced externalities – understand the range of influences on environmental policy © John Tribe

Meaning of sustainable development • The 1987 Brundtland Report defined sustainability as – ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs’ (WCED, 1987: 43) • Common elements in Brundtland are – the rate of use of renewable and non-renewable resources and maintenance of natural capital. – consideration of the effects of development on local and global waste sinks © John Tribe

Key principles of sustainability • consideration of externalities • consideration of depletion of nonrenewable resources • tailoring of economic activity to the carrying capacity of the environment • the precautionary principle • the ‘polluter pays’ principle © John Tribe

• How sustainable are cheap air fares? • How could they be made more sustainable? © John Tribe

Approaches to sustainability • Regulation • market approaches • soft tools. © John Tribe

Regulation • • Planning permission Environmental Impact Assessment Retrospective controls and laws Special Designation © John Tribe

Regulation • Protected Area © John Tribe

Market approaches • Approaches under this category include: – ownership – taxes, subsidies and grants – tradable rights and permits – deposit-refund schemes – product and service charges © John Tribe

Taxes vs. Controls • Legal limit set at Q 1, but actual fines incurred on firm may only shift supply curve to SFN • Tax shifts supply curve to STX • Tax achieves objective of reduced output © John Tribe

Market Approaches • Sustrans, a UK NGO, receives government subsidy to promote cycling © John Tribe

Deposit refund schemes © John Tribe

Soft tools • These include: – tourism ecolabelling – certification / award schemes – codes of conduct – Recycling schemes – guidelines, treaties and agreements – citizenship, education and advertising © John Tribe

Soft Tools • What is this? • An ecolabel: – The EU Blue Flag Scheme for Clean Beaches © John Tribe

Soft Tools • Code of Conduct for countryside visit • What impacts are these designed to lessen? © John Tribe

Soft Tools Hard tools • Advertising • And threat of fine © John Tribe

Soft Tools • Recycling bins at Lisbon Airport © John Tribe

Soft tools: Codes of Conduct © John Tribe

Soft Tools • Beach Rules: Steephill Cove, Io. W, UK • Beach Rules: Sharm,

Pricing the environment • Several methods have been developed by environmental economists to impute value for unpriced goods or services: • Willingness to pay (WTP) method = – discovery of what people would be prepared to pay for a currently unpriced resource. • Hedonic pricing method (HPM) = – imputing a price for an environmental externality by determining its effect on other prices. • Travel cost method (TCM) = – imputing the value of a site by measuring the cost of travel to it. © John Tribe

Pricing the environment • Dose–response method = – measuring effects of pollution in monetary terms. • Replacement cost technique = – measuring costs of pollution by calculating restoration costs. • Mitigation behaviour method = – measuring costs of pollution by counting defensive expenditure © John Tribe

Review of key terms • Sustainable development = – development which can endure over the long run. • Intergenerational equity = – ensuring future generations do not inherit less capital than the current one. • Natural capital = – raw materials and the natural environment. • Regenerative capacity = – limit to harvesting of renewable resource whilst maintaining stock level. • Social cost–benefit analysis = – comparison of full social costs and benefits of a project. • Willingness to pay (WTP) method = – discovery of what people would be prepared to pay for a currently unpriced resource. © John Tribe

Review of key terms • Hedonic pricing method (HPM) = – imputing a price for an environmental externality by determining its effect on other prices. • Travel cost method (TCM) = – imputing the value of a site by measuring the cost of travel to it. • Dose–response method = – measuring effects of pollution in monetary terms. • Replacement cost technique = – measuring costs of pollution by calculating restoration costs. • Mitigation behaviour method = – measuring costs of pollution by counting defensive expenditure. • Command control (CAC) = – direct regulations, e. g. water quality regulations. • Market-based incentives = – adjusting prices to reflect external costs. • Polluter pays principle (PPP) = – polluter pays the full cost of pollution effects. © John Tribe