Environmental Engineering Reference
In-Depth Information
The economy and the environment are interdependent. Not only do humans extract Earth's resources for use in
making goods sold throughout the world, but this extraction and the services that support it provides jobs. The
Earth's resources are the basis for the economy. Additionally, some have argued that without the economic
need for Earth's resources, there would be reduced cause to preserve and protect them.
As human societies become more global, so does the economy and the use of resources. For example, a Japan-
ese multinational company can buy rights to harvest timber in Canada and then export it for sale throughout the
world. However, this globalization of resources can increase environmental damage because countries may not
feel as much incentive to protect the ecosystems that house resources on the other side of the world.
Three ways in which the United States and other countries address the relationship between the environment
and the economy are through the use of subsidies, green taxes, and permit trading:
• A
subsidy
is financial assistance given by the government to a business, a person, or an economic sector
in an effort to support an activity that is thought to be beneficial to the public. Subsidies can be used to
encourage sustainable activities such as energy conservation, research and development of new techno-
logies, farming practices, and the production of fossil fuels. Unfortunately, there are often unintended
negative consequences arising from the use of subsidies.
•
Green taxes
are placed on activities that are considered to be harmful to the environment. For example,
the federal government has placed a tax on eight chemicals considered damaging to the ozone. Ultim-
ately, this tax is frequently passed on to consumers, as companies increase the cost of their product to
cover the cost of the tax.
• In
permit trading,
a maximum or "cap" is placed on the amount of pollution that an industry can emit,
and individual companies are given permits for the amount they are allowed to pollute. If a company
emits less pollution and, thus, does not need all its permits, it can sell the excess permits to another com-
pany that goes over its allotted amount of pollution. For example, a cap-and-trade system for carbon may
help control the amount of carbon dioxide being released into the atmosphere.
World Bank
The World Bank was created in 1944 to help developing nations in need of financial and technical assistance in
an effort to eliminate poverty. It provides loans, grants, and credits for activities deemed important to help a
country reduce poverty and develop sustainable actions for working toward a more secure future. These activit-
ies frequently include agricultural, environmental, and natural resource management, education, health, infra-
structure, finance, and public administration. The World Bank is made up of two separate institutions: the In-
ternational Bank for Reconstruction and Development and the International Development Association.
Examples of projects include the improvement and maintenance of roads in Argentina, the restoration of irriga-
tion systems in Afghanistan, efforts to address India's energy shortage by laying power lines, and programs to
treat and prevent malaria in Zambia.
In keeping with the mission to eradicate poverty and move toward more sustainable practices, the United Na-
tions created the Millennium Declaration in 2000. One hundred and eighty-nine U.N. member states adopted it,
making a pledge to eliminate poverty, increase development projects, and protect the environment.
Tragedy of the Commons
"The Tragedy of the Commons"
is an essay written by Garrett Hardin in 1968. The essay's central point is
that unregulated resources will eventually be overused and depleted, because although it is in the communal
good to protect shared areas, it is in no individual's best interest to do so. To use economic terms, this "maxim-
