Sustainability Lesson ECONOMIC SYSTEMS SUSTAINABILITY AND GEORGIAS FORESTS

Sustainability Lesson ECONOMIC SYSTEMS, SUSTAINABILITY, AND GEORGIA’S FORESTS

The native range of the endangered longleaf pine and grassland forest ecosystem once covered approximately 90 million acres, from southern Virginia to east Texas. In 1936 around 4 million acres were found in Georgia, reduced to 376, 400 acres by 1997. Image by U. S. Fish and Wildlife Service

Employees of the Red Cypress Lumber Company harvest logs in Dougherty County, circa 1905. The timber and naval stores industries, both important economic activities in Georgia during the nineteenth and twentieth centuries, were reliant on the longleaf pines in the state's Upper Coastal Plain.

Economic Systems & Broad Social Goals SSEF 4 Compare and contrast different economic systems and explain how they answer the three basic economic questions of what to produce, how to produce, and for whom to produce. a. Compare traditional, command, market, and mixed economic systems with regard to private ownership, profit motive, consumer sovereignty, competition, and government regulation. b. Analyze how each type of system answers the three economic questions and meets the broad social and economic goals of freedom, security, equity, growth, efficiency, price stability, full employment, and sustainability.

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The difference between North and South Korea at night North Korea's GDP is ~$13 Billion South Korea's GDP is $1. 4 Trillion 10

11 Broad Social Economic Goals

Social-Economic Goals: the role of government varies… 12

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Logging Simulation • You will have two 10 -second “years” to harvest trees. You log trees by picking them up and keeping them. In “Year 1, ” each tree can be sold for 1 skittles candy. • You will be paid at the mill located [point to the mill]. • During “Year 2, ” each tree can be sold for 2 skittles candy. • There will be multiple rounds. The instructions will change. Pay attention or you will be fined.

CLOSURE 1) Which round resulted in the most deforestation? Why do you think this was? 2) Create a list of pros and cons for each system. Think about what went well and what went poorly in each round. Consider potential drawbacks of each system, if it were implemented in a real world situation. Think of a minimum of two pros and two cons for each system. 3) Rank each round (relative to the others) according to how well you believe it meets the social and economic goals of freedom, equity, efficiency, price stability, and sustainability. (Round 1 - no property rights and weak government; Round 2 - environmentally friendly quota system; Round 3 - strong private property rights and owner discretion) 4) Which round/system do you think would be most preferable for a country, and why do you believe this to be so? In what ways is this system better than the other two? (Round 1 - no property rights and low environmental regard; Round 2 - environmentally friendly quota system; Round 3 - strong private property rights and owner discretion) 5) In what ways does the United States’, and more specifically Georgia’s, economic system resemble each round of the logging activity? Also, how is our system different?

Closure question suggested answers… 1) Which round resulted in the most deforestation? Why do you think this was? -Most likely Round 1. The most probable reason for this is the “tragedy of the commons”: Students will likely harvest as many trees as they can in Round 1 because they suspect (often correctly), that if they don’t harvest the trees, someone else will. 2) Create a list of pros and cons for each system. Think about what went well and what went poorly in each round. Consider potential drawbacks of each system, if it were implemented in a real world situation. Think of a minimum of two pros and two cons for each system. -An incomplete list of pros of Round 1 “no government”: This system maximizes individual freedom. The fastest/strongest students get the most trees (“survival of the fittest”). -An incomplete list of cons of Round 1 “no government”: Trees are harvested at an unsustainable rate-leading to deforestation. The slower moving/more polite/etc. students end up with fewer trees. -An incomplete list of pros of Round 2 “government regulations”: Some trees are still standing after both rounds. There is more rest/down time. Lumber prices are higher because supply is lower. -An incomplete list of cons of Round 2 “government regulations”: This system restricts individual freedom through the enforcement of quotas. This system requires a more invasive/active government -An incomplete list of pros of Round 3 “private property”: Trees are still standing after part 1 of this round, ensuring that students enjoy higher profits than in Round 1. Individual freedom is less restricted in some ways than in Round 2 “government regulations”, as students are free to use their land as they see fit. -An incomplete list of cons of Round 3 “private property”: This system requires a government strong enough to enforce property laws. Inadequate enforcement will likely result in behavior similar to Round 1.

Closure question suggested answers… 3) Rank each round (relative to the others) according to how well you believe it meets the social and economic goals of freedom, equity, efficiency, and sustainability. (Round 1 - no property rights and weak government; Round 2 - environmentally friendly quota system; Round 3 - strong private property rights and owner discretion) Most of these rankings have a subjective element and are hence debatable. In many ways Round 1/No Gov’t. provides the most freedom, while round 2/Regulations has the least. • Round 2 could be viewed as most efficient if equity of outcome is the goal, while Rounds 1 and 3/Property could be viewed as more efficient if equity of opportunity is the goal. Round 1 could be viewed as most efficient from the standpoint of trees harvested, but • Round 3 could be viewed as most efficient in providing all parties the opportunity to manage their own property in the manner that will provide the most long-term benefit to them. A variation in answers is acceptable here, and could result in good classroom discussion during closure.

Closure question suggested answers… 4) Which round/system do you think would be most preferable for a country, and why do you believe this to be so? In what ways is this system better than the other two? (Round 1 - no property rights and low environmental regard; Round 2 - environmentally friendly quota system; Round 3 - strong private property rights and owner discretion) -Again, any answers here will be subjective. Round 1/No Gov’t. provides the most freedom, Round 2/Regulations does the most to prevent deforestation, and Round 3/Property provides some balance between the two; providing incentives to not harvest all trees without stifling freedom. 5) In what ways does the United States’, and more specifically Georgia’s, economic system resemble each round of the logging activity? Also, how is our system different? -Once again, there a myriad of ways to answer this question. Students might correctly indicate that our state has over the last few decades been reducing the regulatory burden on businesses, raising the potential for environmental harm-similar to Round 1/No Gov’t. They might indicate, also correctly, that the state continues to regulate the forestry industry, and that this involvement in the market helps to keep deforestation from occurring-similar to Round 2/Regulations. Finally, they could indicate that Georgia (and the United States more broadly) has strong private property rights that encourage sustainable use of the land.

Economic sustainability- the use of strategies for employing existing resources and assets optimally & efficiently to allow businesses to continue functioning profitability over time. • What factors contribute to sustainable economic conditions? 1) Distribute “Handout 2: Table Analysis Questions” to each student. Project the table on the wall. The columns on the table include the following: Freedom Index: A measure from the heritage foundation that measures the level of government involvement in a wide variety of economic transactions. A higher score means LESS government involvement and MORE freedom. A score of 100 would indicate practically no government interference in the economy.

Sustainable economy • Other goals of sustainability include reducing the use of nonrenewables in consumer and capital good production… The problem is simple. It’s generally cheaper to buy the product that has a worse impact on its environment than the equivalent product that does less harm. Higher cost to planet does not translate to higher price to customer.