Environmental Engineering Reference
In-Depth Information
Political economy of environmental degradation
Environmentally degrading economic activities generally involve winners who bene
t
from these activities as well as losers who bear their costs. Without winners, the activities
would not occur. Without losers, their environmental impacts would not matter from the
standpoint of human well-being.
In analyzing the dynamics of environmental degradation, we can therefore ask why it
is that the winners are able to impose environmental costs on the losers. When market fail-
ures take the form of environmental externalities, why do the institutions of governance
fail to remedy them? There are three possible reasons:
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1.
The losers may belong to future generations who are not here to defend themselves.
In such cases, the only remedy for governance failure is a social commitment to an
ethic of intergenerational responsibility.
2.
The losers may lack adequate information as to the extent or sources of environ-
mental burdens. It is often di
cult, for example, to link health problems to pollution,
and to track pollution to its source. In such cases, environmental education and right-
to-know legislation are crucial elements of a solution.
3.
The losers may lack su
cient power to alter the behavior of the winners. In such
cases, a change in the balance of power between winners and losers is a necessary con-
dition for greater environmental protection.
Here I focus on the third explanation - power disparities - since this is most directly
a
ected by globalization.
In the past two decades, a growing body of literature has documented the uneven dis-
tribution of environmental burdens within countries, and their correlation with dispari-
ties in political power. In the USA, studies of 'environmental justice' have shown that
communities with lower incomes and higher percentages of racial and ethnic minorities
tend to face disproportionate environmental hazards.
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For example, even when control-
ling for income, Ash and Fetter (2004)
ff
nd that African Americans tend to reside not only
in metropolitan areas with above-average levels of point-source air pollution, but also in
localities that have higher-than-average pollution levels for the metropolitan area.
In their analysis of informal regulation in Indonesia, Pargal and Wheeler (1996) similarly
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nd that communities with lower-than-average incomes and educational attainments tend
to have higher levels of industrial water pollution, even after controlling for other variables
such as the volume of output and the age of nearby factories. They attribute this to
di
ff
erences in the 'implicit price' of pollution, which they de
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ne as 'the expected penalty or
compensation exacted by the a
ected community'. Following this logic, Hettige et al. (2000,
p. 452) write that 'cost-minimizing
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exible abatement choices will control pollu-
tion to the point where their marginal abatement costs equal the “price” exacted for pollu-
tion by the a
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rms with
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cials,
non-governmental organizations, stockholders and consumers - all parties who are 'in a
position to impose some cost on a
ff
ected parties'. The latter may include local communities, government o
rm or plant if its emissions exceed the norms adopted
by that group'. The resulting 'price' of pollution varies across localities.
Pollutees (those who bear costs from environmental degradation) can in
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fl
uence the
decisions of polluters in two broad ways. The
rst is when their well-being enters directly
into the polluters' utility function. This can be termed internalization through sympathy.
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