Environment – Prevent, Solve, or Manage

Hi Everyone,

In this post, I will continue with my solutions series by investigating our impact on the environment as well as how the environment affects us. For this post, I define the environment as both the physical environment and natural ecosystem; this includes plants, animals, terrain, and climate. I prefer to use the term environment over ecosystem, as I will be focused on human activity that relates to changes to the physical environment even though these activities affect the ecosystem (i.e. interactions between the environment and living organisms).

The environment is something we all share and interact with in some way. We, unlike other animals, significantly shape and alter our environments. Some of the changes we make are intentional and some of them are spill over effects from our actions. The intentional changes are intended to benefit most of us in some way. These changes involve building infrastructure, housing, commercial buildings, industrial buildings, agricultural land and property, and mines. The unintentional changes are generally harmful to most of us as well as nature. These changes include water pollution, land pollution, air pollution, noise pollution, deforestation and habitat destruction. Not all changes to the environment are human related. The environment changes naturally for various reasons. These reasons include natural disasters, ocean currents, earth orbital changes, solar variations, and interactions within the climate system (Teacher Background: Natural Climate Change).

Human action

A good place to begin would be to look at how human activity effects the environment. I have listed several unintentional changes to the environment caused by human activity. These lists also include some of the main causes of these changes based on several different sources.

Major causes of air pollution:

Burning of fossil fuels
Agriculture activities
Waste in landfills
Exhaust from factories and industries
Mining operations
Indoor air pollution

Source: Conserve Energy Future

Major causes of water pollution:

Agriculture activities
Sewage and waste water
Oil pollution
Radiative substances

Source: NRDC

Major causes of land pollution

Deforestation and soil erosion
Agriculture activities
Mining activities
Overcrowded landfills
Industrialisation
Urbanisation
Construction activities
Nuclear waste
Sewage treatment
Littering

Source: Conserve Energy Future

Noise pollution

Traffic noise
Air traffic noise
Construction sites
Catering and nightlife
Animals

Source: Iberdrola

Deforestation

Conservation of forests
Forest fires
Unsustainable logging
Fuelwood harvesting
Climate change

Source: World Wildlife Fund

Habitat destruction

Agriculture activities
Land conservation for development
Water development
Pollution
Climate change

Source: National Wildlife Federation

As can be seen from the lists, most forms of intentional change to the environment leads to some form of unintentional negative change. Agriculture activities, factories and industries, waste disposal, mining, and construction are mentioned as key contributors to many of the negative changes to the environment.

Can the market address environmental change?

Trade takes place based on demand and supply. The interaction of demand and supply determines the price and quantity of an output. Demand is based on willingness and ability to pay for an output. Supply depends on costs and ability to produce an output. In regards to the environment, this can be challenging. Generally, demand and supply do not consider externalities such as damage to the environment. Therefore, the market price will be lower and quantity supplied will be higher than desirable. In theory (e.g. Coase Theory), those made worse off by a particular externality can punish those creating the externality. However, there are many limitations to this approach. Often all parties involved cannot be identified or represented and the extent of the damage caused by the externality cannot be accurately assessed.

Can the public sector address environmental change?

The public sector greatly contributes to environmental change. The public sector often provides much of the infrastructure for cities. This infrastructure includes transportation, water, power, sewage, and telecommunication. The public sector unlike the private sector, do not rely on choices of private actors (buyers and sellers). Instead, decisions, in theory, can be made in the best interest of society as a whole. Cost benefit analysis can be used to aid decisions so that the environment can at least receive some consideration. However, Government decision-making processes are often flawed and they result in poor outcomes for society. Many Governments are pressured to act in the best interests of the people and organisations that put them in power. This is often in conflict with what is in the best interest of the broader society. The outcomes are often worse than if the market had been left to determine the decisions. This may even be true when there are high externality costs such as damage to the environment.

Prevent, Solve, or Manage

The ‘prevent, solve, or manage’ approach could be useful for investigating damage to the environment. ‘Prevent’ and ‘solve’ approaches would be focused on damage to the environment caused by humans and the ‘manage’ approach would be focused on damage to the environment that is beyond human control.

Prevent

‘Prevent’ involves not causing damage or as much damage to the environment through our actions and outputs. Normally there are many ways to reach a particular desired outcome. Some ways will cause more damage to the environment than others. For example, the use of fossil fuels causes air, water, and land pollution (ucsura.org) whereas solar power causes less widespread damage to the environment. However, solar panels are not perfectly environmentally friendly. They can leak hazardous materials and beams of concentrated sunlight can kill birds and insects (EIA). Solar power can still arguably be considered better for the environment than fossil fuels.

One of the biggest problems with outputs that cause less environmental damage is that they cost more to implement or operate than outputs that cause more environmental damage. This is often due to environmental cost not being adequately captured and/or the environmentally friendly output using a newer technology that is not viable to be mass produced. Figure 1 contains a demand and supply graph that compares price and quantity demanded of an output that causes significant environmental damage with an output that causes minimal environmental damage. The graph shows the supply when environmental damage is included and when it is excluded.

Figure 1: Environmentally friendly alternative would be chosen if all environmental costs are included

Where: MPC is marginal private cost, MSC is marginal social cost, SS is supply of outputs, P is price of outputs, and Q is quantity of outputs produced if a single market existed.

In Figure 1, we can see that if all environmental damage is included in the costs (supply), the environmentally friendly output (Output B) will dominate the market. If none of the environmental damage is included in the costs, the less environmentally friendly output (Output B) will dominate the market. The output that dominates the market can be expected to be determined by the extent one output (Output A) is less damaging to the environment than the other (Output B), how much of the environmental damage can or will be costed and the ability for reparations to be made to the effected parties.

Even if environmental impacts are given full consideration, if the costs of achieving an outcome with minimal environmental damage are too high, it is unlikely to happen. See the demand and supply graphs in Figures 2 and 3.

Figure 2: Environmentally friendly alternative costly on a large scale

Figure 3: Environmentally friendly alternative costly to commence

In Figure 2, I have assumed that the environmentally friendly output (SS _F ) cannot be cost effectively produced on a large scale. Therefore, the less environmentally friendly outputs will still be used and will be considered more viable even if the costs to the environment are included; see (SS _E2 ).

In Figure 3, I have assumed the environmentally friendly output (SS _Y ) is very costly to initiate or develop. Therefore, as with the previous example, the less environmentally friendly outputs will still be used (SS _X2 ).

Supply is not always the only problem. Sometimes the demand for the output that causes less damage to the environment is lower. There are several reasons why the demand could be lower, these include:

The output is perceived to be inferior.
People’s tastes and preferences favour the good that does more damage.
People have become familiar to a particular good and consumption is a strong habit.
People do not make the effort to change.
The environmental damage of the preferred good is ignored or not acknowledged.

Figure 4 compares the price and quantity of outputs with different demand as well as different costs to the environment.

Figure 4: Environmentally friendly alternative with lower demand

In Figure 4, Output L represents an output with low private costs and high social costs (i.e. environmental damage) as well as high demand. Output M represents an output with higher private costs but with no or little additional social costs (i.e. environmental damage). If environmental costs cannot or will not be captured, Output L will dominate the market. If these costs are captured, the market could become split between Outputs L and M. If the markets are split, it is possible that the costs of Output L will fall because of economies of scale. It is also possible demand for Output L will increase if the quality increases and/or if people become accustomed to Output L. Good real life examples would be animal meat (i.e. Output M) and plant based alternative to meat (i.e. Output L).

Solve

‘Solve’ involves reducing or eliminating environmental damage from our current types of outputs. Often the waste and unused materials and substances cause the environmental damage. Increasing efficiency of outputs so that there is less waste and emissions is a good method of reducing environmental damage (Air Quality and Stationary Source Emission Control 1975). Figure 5 compares the costs (supply) of more efficient usage of outputs with less efficient usage.

Figure 5: Efficient usage to reduce environmental damage

It is likely that increasing efficiency will involve some initial costs such as research and implementation costs. It is also likely that increased efficiency will reduce variable costs. In the long-run, if demand is sufficiently high, greater efficiency will reduce private costs. Improved efficiency should reduce damage to the environment; therefore, if it is fully captured, the more efficient version of the output will dominate the market.

Manage

‘Manage’ involves dealing with environmental change in a manner that causes the least cost to humans and nature. The ‘manage’ approach can be expected to be applied to environmental changes that occur naturally. The global climate is constantly changing. These changes are expected to be caused by numerous factors; most of these factors are not within our control (Some scientists have claimed human activities may have contributed to climate change but have yet to offer conclusive evidence (Carter 2007)). Figure 6 contains estimated temperatures from the past several thousand years.

Figure 6: Global temperatures over thousands of years

Source: The Euro Probe Note: All statistics quoted for global warming by all authorities never include error bars. The data quoted could be +/- 5% , +/- 10% or even +/- 20%

As can be seen from the graph in Figure 6, global temperatures can fluctuate by several degrees even when the world is not experiencing an ice age. The temperature changes may appear small but can have significant impact on the environment. The world is currently facing warmer temperatures. With warmer temperatures, we are likely to experience longer and more frequent heat waves, changes in precipitation patterns, stronger and larger storms, and higher sea levels (NASA). Some of these changes can result in positive outcomes such as increased agricultural production and some can result in negative outcomes such as more storm damage, flooding, and droughts. People can adapt to these changes by relocating to areas that benefit from the temperature changes and/or relocating away from areas that are becoming negatively affected by the temperature changes. Technology could also be developed to protect against the negative changes and exploit the positive ones.

Applying prevent, solve, or manage approach

In regards to applying the ‘prevent, solve, or manage’ approach, I believe it should be adopted differently depending on the source of the environmental change. If people cause the changes, ‘Prevent’ approach should be considered first. This would involve preventing the negative environmental change by pursuing different outputs to achieve a particular outcome. If alternative outputs are not feasible because of costs, alternative options, or even lack of incentive to change, a ‘solve’ approach could be adopted. A ‘solve’ approach could involve improving the efficiency of existing outputs in such a way that limits damage to the environment. If changes to the environment are occurring naturally, people will not be able to ‘prevent’ or even ‘solve’ the problems caused. However, people can ‘manage’ these changes by adapting to them. This could involve relocating or inventing technology, which minimises the damage of these changes.

Summary

The environment affects us all.
People shape the environment to their benefit.
Shaping of the environment has unintended and often negative impacts on the environment.
These impacts include the following: o water pollution o land pollution o air pollution o noise pollution o deforestation o habitat destruction
The private sector often helps shape the environment but do a poor job of handling unintended affects (externalities).
The public sector does not rely on demand and supply models to produce outputs; therefore, in theory, could account for negative impacts to the environment. However, Governments often lack incentive to do so.
An outcome can be reached in many ways. Some of these ways cause less environmental damage than others.
Sometimes less environmentally damaging outputs are not feasible. It is sometimes more practical to alter existing outputs types to become more efficient to reduce damage to the environment.
When environmental changes are beyond human control, it is better to adapt rather than attempt to change nature.
‘Prevent’ and ‘solve’ approaches are best suited for changes relating to human activity.
The ‘Manage’ approach is best suited for changes not caused by human activity.

Conclusion

The environment is something we should all respect as it affects us all. We need to be respectful to all other species of animals that share our environment. If we can, it would be great if we could alter our own environment in a manner that benefits us with minimal negative disruption to the broader environment. We also need to understand that we will not always be able to successful shape the environment for our own long-term benefit. Sometimes we need to adapt to the environment to survive and thrive. After all, we are all subject to the principles of evolution.

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