Course:ECON371/UBCO2024WT1/NewsWiki/Group 3
Wiki #1
Source: CBC News
URL:
Problem:
The environmental economic problem is the impact on the planet by the production of anhydrous ammonia for the use of nitrogen fertilizer in agriculture. The traditional way of producing anhydrous ammonia is by removing Hydrogen from fossil fuels, which produces roughly 1.8% of global CO2 emissions.
Summary:
Ammonia is a resource commonly used in agriculture to fertilize crops. “Roughly 80 percent of the world's ammonia is used in agriculture.” The traditional process required to make ammonia involves removing hydrogen gathered from fossil fuels, which subsequently is harmful to the environment. This article introduces an advancement that brings about a new ammonia production system with a carbon-free end result. The CEO of FuelPositive Ian Clifford refers to it as “green ammonia.” This process uses electricity to remove hydrogen from water. The ammonia that is made is stored on the farm, making it easy to use for farmers, while minimizing CO2 emissions from transportation of the product. The ammonia is then containerized and controlled from off-site, with FuelPositive controlling the system. This does not increase the farmer's workload as they only need to apply the ammonia to their crops. This process isn’t new, but it is new within the agricultural sector. The article also says this might reduce the cost of ammonia, possibly leading to greater agricultural yields. Clifford’s company originated in Manitoba. He expects to start expanding this technology to farms within the region. Big food producers say “Green ammonia is very enticing.” Even though ammonia has been used the same way for generations, the process Clifford has introduced paves the way for more sustainable agricultural practices.
Economic concepts:
This article refers to several economic concepts, with two of them being: negative externality and sustainability standards.
An externality is an outcome, either positive or negative, that affects individuals who were not part of that activity that will cause that outcome. These individuals are referred to as third parties in economics. To be more specific, here is an example: if my family and I use bicycles as a transportation mode, as it is more sustainable than using a car, but everyone else in the city used cars, which are not sustainable, we will still face the negative consequences of car users. Even though we are not contributing to the following problems, we will still have to face them: carbon emission, unhealthy oxygen, climate change, and more. This is an example of a negative externality.
Sustainability standards, on the other hand, could be defined as the guidelines that the world should follow in order to minimize negative impacts and preserve the planet for all future generations. It consists of preserving natural resources and ecosystems, as well as minimizing the environmental impact that we have on the planet. The goal is to make sure that future generations have access to the same resources and opportunities that people have right now.
Prof: As was emphasized weeks after you did this, a sustainability standard is a set of 'rules' that ensures the choices we make today do not force any future generation to experience lower utility than we experience now.
Analysis:
This article can be analyzed using the concepts of externalities and the sustainability standard.
The carbon dioxide emissions produced by the traditional ammonia production process are a negative externality. There is a cost (greenhouse gas emissions) that is borne by parties (people and ecosystems across the globe) who are uninvolved in the economic transaction (the production of ammonia.) The news article highlights ammonia-producing technology which does not directly emit any carbon dioxide, and this may be a way to potentially reduce this externality. This is interesting because the solutions typically proposed by economists to reduce externalities involve policies to internalize the external costs of production, such as taxes or fees. However, the solution in this article does not come from the government but rather from the innovation of a private company, FuelPositive. This may provide support for the conservative view that government intervention is not always the best way to deal with climate change and environmental problems, and that the market will provide solutions to these problems on its own.
Prof: The externality is the damage done by the carbon dioxide emissions, not the emissions themselves. Whether this technology proves to have a positive impact depends on how widely it is adopted. That will depend, among other things, on the overall impact on the farmer's profit.
The sustainability standard is the concept that the standard for determining how much environmental degradation is acceptable should be, at minimum, the preservation of major natural ecosystems and the safeguarding of a habitable planet for future generations. In the CBC news article, there is an interview with professor Mario Tenuta of the University of Manitoba. He mentions that the green ammonia technology is one of several "technologies and approaches that get us towards a point in time where we're not changing the atmosphere or our environment to the negative." This is clearly an embodiment of the sustainability standard, because he is concerned with changing the overall environment negatively, regardless of whether or not it is economically beneficial to do so. Green ammonia technology may also appeal to consumers or businesses who believe in another environmental protection standard called the efficiency standard, which advocates only protecting the environment when the net monetary benefits of doing so are positive. This is because green ammonia production may be cheaper than traditional ammonia production, and is also more reliable. Green ammonia can be produced on-site and is not prone to the volatile pricing of traditional ammonia, which relies on fossil fuels as inputs. This illustrates how the introduction of a new technology may appeal to people for environmental reasons, economic reasons, or both.
Prof: In future classes, we refine the idea of the sustainability standard, based on whether we believe there are substitutes for the services provided by major natural ecosystems and the other 'gifts of nature'.
Conclusion:
Green ammonia poses a viable solution to eliminating the negative externality of producing anhydrous ammonia and to setting a new sustainability standard for all farmers. Through technological innovation, we can reduce CO2 emissions and make great strides towards protecting our planet.
Wiki #2
Source:
URL:
https://news.gov.bc.ca/releases/2024ENV0043-001511
Problem:
Coastal GasLink Pipeline Ltd. has failed to appropriately control erosion and sediment deposition along its pipeline construction route. This could negatively impact water quality or fish habitat in nearby waterways.
Summary:
This article presents the administration of fines to the Coastal GasLink Pipeline Ltd. (CGL) by the Environmental Assessment Office (EAO). CGL is building a natural gas pipeline between Dawson Creek and Kitimat, a distance of approximately 670 km. In 2014, prior to the beginning of the building process, the project received an environmental assessment certificate, which “requires CGL to develop and follow an environmental management plan, including measures to protect sensitive wetlands and waterways from sediment caused by erosion that can negatively impact water quality and fish habitat.” However, as the EAO was conducting compliance oversight, they found that CGL was failing to adequately control sediment and erosion. The latest fines of $590,000 on September 11th, 2024 follow four previous penalties. The first penalty dates back to May 2022, when they were also fined for failure of adequately controlling sediment and erosion. As they continue to fail to meet the requirements of the environmental assessment certificate, penalty sums escalate.
Economic concepts:
This article mainly touches on economic concepts related to policy, but looking deeper, it also connects with non-market benefits.
A policy is a group of statements of principles that show the values and intent of a certain organization. These policies are used for consistent decision making regarding different issues that may occur. To explain it simply, they are rules that all people and companies must follow. If organizations choose to disobey these policies, they can be fined or worse, as seen in this article here. An example of a common policy that all Canadian citizens take part in is taxation. Here, this policy declares how much money people have to pay the government based on their income. Note that policies are not always set in stone and can often change over the years as new information and events occur. For example, the COVID-19 guidelines. This policy was instituted at the start of the pandemic when the virus first emerged in Canada. Overtime, the rules that embodied this policy shifted as vaccines and other methods of overcoming the virus emerged.
Prof: In the context of our course, I would see a policy as a rule or set of rules that are enforceable, which seeks to move the economy towards efficiency. Policy is therefore directed to increase the efficiency with which resources are used, and in the case of externalities, adjusting the market outcome to account for the externality.
The other topic that this article reflects is nonmarket benefits. A nonmarket benefit is a resource that does not require market transactions and therefore it does not have a set price. In this case the resource is the environment and its natural beauty. It is next to impossible to impose a price on this resource, as everyone values it differently. This non-fixed value makes it exceedingly difficult for government and authoritative bodies to issue fines for those who destroy it.
Prof: The critical thing about a nonmarket benefit is that the benefit - a good or service - is not traded in a market. Therefore, there is no market price we can observe to figure out what the value is.
Analysis:
This article explains how the Coastal GasLink Pipeline Ltd. (CGL) failed to comply with the Environmental Assessment Certificate, a policy imposed by the government. This certificate mentions all the requirements needed to protect the environment, particularly in wetlands and waterways from harm during projects. Unfortunately, the Environmental Assessment Office (EAO) has issued 10 administrative fines in the last five years, totaling $590,000. The EAO is one way to make sure businesses comply with environmental regulations and policies by imposing fines and orders, or even shutting down a project when necessary.
Prof: You are correct that the purpose of the fines is to prompt businesses to act consistent with policy. Given your choice of policy as a concept, it would have been better to include a comment about how the damages done by CGL are inefficient, in the sense we talk about that in class, and that the purpose of the policy, and the resultant enforcement actions, is to try and make CGL behave in a way that isn't imposing excessive costs on society at large.
This article also highlights the concept of nonmarket benefits. Here, non-market benefits refer to wetlands, water ecosystems, and First Nation land. Even though these resources do not have economic value, they are still important to the First Nation community. This is why regulations and policies were put in place to protect those resources from harm and ensure their preservation for current and future generations.
Prof: Nonmarket benefits do have economic value. Recall the discussion of Total Economic Value in class. What they don't have is a price that can be observed in a market.
Conclusion:
In conclusion, this article shows the important role of government policy in protecting sources of non-market benefits. There is no economic or profit motive to protect these resources, so the government imposes a policy to internalize the non-market costs that occur when the environment is damaged.
Wiki #3
LINK: https://www.cnn.com/2024/09/20/climate/doomsday-glacier-thwaites-melt-sea-level-rise/index.html
Problem
The melting of the Thwaites Glacier in Antarctica might be at an irreversible stage as it has been melting at an accelerated rate for the past 10 years. This would lead to sea level rising impacting different countries and ecosystems.
Summary:
The article discusses the Thwaites Glacier in Antarctica, often dubbed the "Doomsday Glacier" due to its potential impact on global sea levels. Recent studies show that the glacier's melting rate has increased in the last 30 years, with warmer ocean waters speeding up the process. This glacier alone holds enough ice to raise global sea levels by 2 feet, and if it collapses entirely sea levels could rise by up to 10 feet due to the melting of exposed cliffs behind the glacier. Scientists have been monitoring Thwaites closely using advanced technologies, including autonomous submarines, to understand its behavior and predict future sea level impacts. The accelerated melting is attributed to the intrusion of warmer waters from cracks in the bottom of the glacier, causing it to thin and retreat rapidly. This phenomenon could have catastrophic consequences for coastal cities worldwide, affecting millions of people and ecosystems. Researchers emphasize the urgency of mitigating climate change to slow down ice loss from Thwaites and other vulnerable Antarctic glaciers, highlighting the critical need for global action to address the accelerating climate crisis.
Concepts:
This article touches multiple economic concepts, most notably those of cost-benefit analysis and feedback loops.
Cost-benefit analysis is a decision-making tool used to evaluate if the project or policy should go through or not. It looks at both the costs of the project, typically focused on short-term costs, and also the benefits. The main idea is to see which category is greater if the action went through: the benefits or the costs? If the benefits exceed the costs, the decision should be to go with the project/policy. However, if the costs exceed the benefits, then it should not be done. This concept can be applied to the simple example of buying a car. The cost of buying a car involves the buying price, maintenance, fuel costs, and insurance. However, the benefits of buying a car include time you save when commuting, comfort, and convenience. Thus, you would evaluate whether the costs outweigh the benefits or vice-versa, and make your decision from that.
The second concept is the idea of feedback loops. Feedback loops evaluate the cause and effect relationships between different actions/processes which cycle in a loop, meaning it feeds back to the initial action. There are two types of feedback loops: positive and negative. Negative feedback loops mean that the overall cycle is in equilibrium: the effects of the initial cause counteract it and bring the system in stability. For example, you are thirsty. Because you are thirsty, you drink some water. Now, you aren’t thirsty anymore. A positive feedback loop occurs when the effects of the initial cause exacerbates it. For example, population growth is a positive feedback loop. As the population grows, they are more people that repopulate, which makes the population grow even more. It is a vicious cycle that continues to amplify the initial action.
Analysis:
The melting of the glaciers in Antarctica are a perfect example of where a cost-benefit analysis should be used. The decline in size of the glaciers leads to many problems for civilization, the biggest being sea level rise. The article highlights how the collapse of the Thwaites glacier could ultimately lead to a rise of 10 feet in sea levels. This increase would wreak havoc on coastal cities such as London and Miami. In this case, a cost-benefit analysis could be used to assess the price on which society needs to pay in order to prevent disaster. There is an issue with this method in this context however, it is next to impossible to put a monetary value on sustaining the glacier's size. This is due to the fact that global warming (increasing world temperatures) is the primary accomplice in the issue. Global warming is caused by numerous things and is a global problem. This means that it is not just a simple fix of pay this and stop that. The problem is much deeper and requires both money and political agreement to solve. Despite this issue, a cost-benefit analysis still layouts all the advantages and disadvantages that come with the melting of the ice caps. It is important to assess all the possible outcomes and losses that will occur in the near future if society does not get a handle on its emissions.
A constant theme that comes about when referring to the melting of the glacier ice caps is feedback loops. In terms of the Thwaites icecap, it is an example of a positive feedback loop. A positive feedback loop is when a product of a reaction leads to an increase in that reaction. In this case, the glaciers continue to melt faster as temperature increases. The article also states that the water surrounding the glacier is relatively warm ocean water, meaning as it continues to melt more of the glacier is exposed to water, leading to greater melting.
Prof: The evidence that the Thwaites glacier risks collapse would be evidence that the probability of catastrophic impacts of climate change is higher than previously thought. This would be useful information in adjusting any cost-benefit analysis of actions that could be taken to mitigate climate change. As you say, there is a big political challenge in actually doing anything.
Conclusion:
In conclusion this article expresses the urgency to tackle climate change and particularly the melting of glaciers in Antarctica. This could be done through a decrease in gas emissions and more research on glacier dynamics.
Wiki #4
Source:
CBC News
URL:
https://www.cbc.ca/news/climate/environmental-racism-c-226-1.7235319
Prof: I had to fix the link. This is an external link, which needs to be indicated when creating the link.
Problem:
Research has shown that Indigenous, Black, and other racialized groups have been disproportionately affected by pollution. This has affected these communities' health and livelihoods.
Summary:
For years, Canada has faced issues of environmental racism affecting mainly Indigenous, and black communities. In fact, these communities have been suffering with no change, impacting their health, urban planning, and worker’s rights.
However, a new law, Bill C-266, sponsored by Green Leader Elizabeth May, has passed and requires changes by 2026. This law addresses environmental racism by examining the link between “race, socioeconomic status, and environmental risk” as well as developing national strategies to tackle it. Communities now feel relieved, as the law brings accountability and hope for meaningful changes.
Prof: I do not think that the communities have cause to be relieved yet. The law seems to focus on gathering information to examine how different groups are impacted. It isn't clear from the article that the law will actually require anything to change.
Concepts:
Two environmental economic concepts in this article are environmental racism and the safety standard.
One concept in this article is environmental racism, which refers to the disproportionate exposure of marginalized communities, particularly racial and ethnic minorities, to environmental hazards or harmful pollutants. These communities often reside in areas with higher levels of industrial activity, waste disposal sites, or poor air and water quality due to historical and systemic inequalities in zoning, land use, and policy enforcement. Environmental racism can manifest in various forms, such as the lack of adequate legal protections, underrepresentation in environmental policy decision-making, and the uneven distribution of environmental benefits like clean parks or green spaces. This issue highlights the intersection of social justice and environmental policy, emphasizing the need for equitable solutions that protect all communities from environmental degradation. In Canada, communities that are often considered victims of environmental racism are Indigenous reserves or communities.
The safety standard is an environmental regulation principle that aims to set limits on pollutants or other environmental risks based on maintaining a certain level of safety for human health and the environment. This standard is based on moral concerns around fairness and the right to be protected from harm caused by environmental problems. This standard prioritizes minimizing risks and potential harm rather than minimizing costs, often leading to stricter regulations. The safety standard contrasts with the efficiency standard, which seeks the most cost-effective way to reduce harm. While it ensures a higher level of protection, the safety standard can sometimes be criticized for not taking into account the economic costs of compliance, potentially leading to significant trade-offs between environmental protection and economic efficiency. The standard can also be criticized for not considering the distributive effects of the costs of pollution reduction, that is who must be responsible for bearing the high costs of protecting people from harm?
Analysis:
Environmental racism is the exact topic of this article. The new law aims to expose past instances of environmental racism and prevent them from happening again. A real-life situation of environmental racism was discussed in the article, one regarding the Grassy Narrows First Nation. Residents of this community have been victims of unsafe health conditions for decades due to a former pulp and paper mill causing mercury contamination. Mercury poisoning is very serious; it causes significant health problems and has killed many. The First Nation recently filed a lawsuit against the government, arguing that they have not done enough to protect or compensate the community. This case is compared to the Walkerton tragedy, where several people died from an E.Coli outbreak contaminating drinking water. What makes this case different? An inquiry was ordered the same month, and victims were compensated the year after. The government addressed the situation affecting a primarily white community almost immediately, but has failed to address the situation affecting the Indigenous community after several decades. This is what environmental racism is about; the discrimination of environmental justice towards marginalized communities.
The second environmental economic concept seen in this article is the principle of the safety standard. In relation to environmental racism, the new law aims to enforce the same safety standard for all communities across Canada, no matter the race or ethnicity of the communities. Environmental racism in essence is the lack of consistent safety standard enforcement across communities of different ethnicities. In regards to the situation of the Grassy Narrows First Nation, industrial activity near this community should be held to the same safety standard as any other community in the country. While there may be high upfront costs for businesses to comply with these safety standards, it is worthwhile economically in the long-run when all social costs such as healthcare costs are included. As seen in the Grassy Narrows situation, it would of made a lot more sense to improve safety standards immediately, as the burden of the mercury contamination has caused so many negative effects and costs to everyone involved.
Prof: It isn't clear that a safety standard will, in the long run, be worthwhile economically. It is likely to achieve justice goals though, if it is seen as an injustice for some people to face higher risks from the environment they are exposed to for things that are not related to their own choices.
Overall a good application of the concepts to the article.
Conclusion:
In conclusion, this article showcases Bill C-226, a piece of legislation designed to address environmental racism. The bill brings hope to many of the affected communities and progress to environmental justice as a whole. With more policies such as this, we can hope to promote other countries to implement similar strategies to overcome environmental racism.
Wiki #5
Source
https://globalnews.ca/news/10815655/ontario-youth-led-climate-change-case/
Problem
A group of youth in Ontario is challenging the provincial government's lowered emissions targets, claiming they violate their Charter rights by contributing to climate change risks. The Ontario Court of Appeal has ordered a new hearing to further explore these constitutional issues.
Summary
Ontario’s top court has revived a Charter challenge against the provincial government’s weakened emissions target, marking a major win for young activists led by 17-year-old Sophia Mathur. The Ontario Court of Appeal has sent the case to a lower court for reconsideration, criticizing the original dismissal of the challenge. The activists argue that the new emissions target, set after Ontario repealed its cap-and-trade system, allows for significantly higher emissions and threatens their future.
The court stopped short of ruling on the target's constitutionality but emphasized that Ontario’s statutory commitment to climate action could potentially violate the youth’s Charter rights. This case is part of a growing movement in Canada and abroad, pushing courts to hold governments accountable for climate policies. Legal experts view the ruling as a strong foundation for a future victory, with other climate cases across Canada closely watching the outcome.
Concepts
There are two concepts that this article talks about, cap and trade and safety standards.
A safety standard is an environmental regulation set to limit pollution and manage resources sustainably, ensuring that economic activities do not negatively impact human health or the environment. Usually, governments set specific thresholds for acceptable levels of pollutants or other environmental hazards. Therefore, companies have to comply with those standards as failure to do so will result in penalties.
Cap and trade systems: this system consists of governments setting a cap on the total amount of carbon emissions and/or other dangerous atmospheric pollutants that companies can release. Emissions permits for set amounts of emissions are then auctioned off by the government and sold to different companies. However, companies that need to exceed their maximum allowance of emissions can buy permits from other organizations that have not used their full emissions capacity. This system is an incentive-based regulatory system that increases the cost of emissions, but allows those emissions to continue if the economic benefit of emitting is higher than the cost of the permit. Typically, the emissions cap will be reduced over time, increasing the price paid by companies who emit the pollutants.
Analysis
Cap and trade systems are central to the court case discussed in this article. In 2017, the Ontario government introduced a cap-and-trade system with an emissions reduction target of 37% below 1990 levels by 2030. In 2018, the newly elected Progressive Conservative provincial government repealed this law and set a new emissions target of 30% below 2005 levels by 2030. They also prohibited all trading of emissions permits. By banning the cap-and-trade system and raising the provincial emissions target, the government removed an incentive-based regulation system that would have encouraged businesses to innovate and reduce their greenhouse gas emissions by retrofitting, changing to alternate energy sources, or making less emission-intensive products. Repealing the cap-and-trade system has made it less costly for producers to cause emissions and put the brakes on efforts to reduce greenhouse gases.
Safety standards are relevant to this article because the constitutional challenge the youth launched claims that the Ontario government’s reduced emissions target violates section 7 and section 15 of the Canadian Charter of Rights and Freedoms. Section 7 guarantees the right to life, liberty, and security of the person. Section 15 guarantees the right to equal protection from the law, without discrimination on several enumerated grounds, including age. The youth are arguing that the reduction of the emissions target violates their right to life and that it is discriminatory in terms of age since the negative effects of high greenhouse gas emissions will disproportionately affect younger people. Younger people will still be around in the future when climate-change-related disasters and health problems become more prevalent. Older people will likely not be alive to face the consequences. A justice of the Superior Court of Ontario found that Ontario was increasing the risk of death faced by young people by not taking steps to further reduce its emissions. This idea of an environmental policy being wrong because it is not safe enough is the core premise of the safety standard. The youth are not arguing that the emissions target is inefficient or unsustainable, but that it is unsafe. This court case illustrates that within a legal system with constitutionally protected rights, arguments for the right to be protected from harm may have more legal weight than arguments for sustainability or efficiency. In Canada, the safety standard may be the easiest standard to enforce legally.
Conclusion
In conclusion, the case brings to light the effects of abolishing a cap-and-trade system and the relevancy of a safety standard to protect our human rights, whether those rights are now or in the future. This youth-led case brings bright promise to climate action in the future.
Additional Source
https://climatecasechart.com/non-us-case/mathur-et-al-v-her-majesty-the-queen-in-right-of-ontario/
Wiki #6
Source:
CBC News
Link:
https://www.cbc.ca/news/climate/climate-report-2024-1.7344969
Problem:
The environmental economic challenge in this article is that the global climate risk is increasing due to increasing levels of fossil fuel consumption. This is increasing the effects of flooding, wildfires, and hurricanes and making damage more costly.
Summary:
A major new report was recently published revealing the “grim picture of where the planet is headed”. The study evaluated 35 of the measurements used to track the planet’s climate risk, and found that 25 of them are currently at record high levels. While the majority of the report is negative, they presented some environmental progress. In recent years, the Brazilian Amazon rainforest has seen fewer cuts under a new government, and while fossil fuel consumption continues to grow, renewable energy consumption has shown significant increases. Now comes the bad news. Emissions continue to grow, both on a global and individual scale. The frequency of climate-related disasters also continues to grow, highlighted by the Jasper wildfires and the many floods and hurricanes south of the border. Global population growth is not slowing down, resulting in increasing food production, one of the leading greenhouse gas emitting industries. Finally, the fossil fuel industry continues to be subsidized, with Canada handing out $2 billion in fossil fuel subsidies.
Concepts:
The two concepts that this article closely reflects are renewable energy and externalities.
Renewable Energy refers to energy sources that are naturally replenished over short time scales, such as solar, wind, hydro, and geothermal energy. These sources are considered sustainable because they are less likely to deplete and generally have a lower environmental impact compared to fossil fuels. Fossil fuels are a form of non-renewable energy as they will not replenish over my lifetime or a few generations of the people who follow.
Externalities in economics are costs or benefits incurred by third parties who are not directly involved in a transaction. Positive externalities occur when the actions of individuals or businesses have beneficial effects on others, while negative externalities arise when their actions impose costs on others. For instance, renewable energy can generate positive externalities by reducing pollution and mitigating climate change, while traditional fossil fuel energy often results in negative externalities, such as environmental degradation and health problems. Understanding these concepts helps policymakers and economists assess the broader impacts of energy choices on society.
Analysis:
This article shows that whether the world uses renewable or non-renewable energy, the outcome on climate change will be different. Between 1965 and 2023, we can see an increase in the use and production of renewable energy such as solar panels. However, it is important to note that the amount of fossil fuels such as oil and coal continues to rise. This is due to the high amount of subsidies provided by the government to the fossil fuel industries to make it cheaper. In fact, “global subsidies surpassed $7 trillion US for the first time last year, with Canada doling out $2 billion in fossil fuel subsidies.”(Shingler et al., 2024) However, as in 2022 the fossil fuel subsidies were the highest, many global organizations are voting to end these subsidies so that people use more renewable energy. This will contribute to limiting the consequences of climate change and help save the environment for present and future generations.
The article also talks about the hidden costs of externalities associated with the production of livestock and the production/use of nonrenewable energy, more explicitly fossil fuels. The cost of producing these impacts societies as a whole and increases climate-related disasters such as wildfires, extreme heat waves, floods, and more. However, the costs of emissions of fossil fuels, livestock, and any other harmful sources are usually not included in economic transactions. This means that societies must bear the costs even though they are not responsible for producing those harmful emissions. This is why governments should work towards other alternatives, allowing renewable energy to be more used. This will help protect people’s health, boost the economy, and save the environment before it is too late.
Conclusion
In conclusion, the details of the report in the article show that the high usage of non-renewable energy sources is causing negative externalities of greenhouse gas emissions. This is causing increased harm and costs to society.
Prof: There are two ways that fossil fuels are subsidized, and it wasn't clear whether both ways were part of the data. One way is the direct subsidies, in the form of financial transfers to those involved in the fossil fuel industries, while the other are more indirect subsidies such as tax breaks and deductions that lower their costs and thereby increase their profits. The second way is those externalities. Where those in the fossil fuel industries are not required to pay for the damages done by the emissions generated by the use of their products. There is a question of where the charge for these damages should be borne. Our international agreements hold that it is the final user who burns the fossil fuel product who is responsible for paying for the damages. Politically within nations, it has proven very difficult to have the final users - in many case individuals - to agree to paying for those damages, which would be in the form of a carbon tax.
Wiki #7
Source:
Investing News Network
Link:
https://investingnews.com/inside-northern-canadas-lithium-rush/
Problem:
The problem outlined in this article is that, even though Northern Canada has large amount of lithium, mining and produce it is challenging due to extreme weather conditions. In fact, cold winters makes extractions difficult and also create safety risks for the workers. Additionally, social and envionrmental challenges are anticipated when extracting lithium.
Summary:
Northern Canada's lithium rush is intensifying, with mining companies targeting the rich deposits in areas such as northern Ontario and Quebec, driven by surging demand for lithium in batteries and electric vehicles. These remote northern regions of Canada are drawing interest due to their potential to supply significant lithium resources. They contain deposits of a mineral called spodumene, which is a solid rock that contains lithium. These solid rock deposits have a higher concentration of lithium than brine or clay, which are other sources of lithium. However, the challenging Arctic conditions and lack of infrastructure pose logistical hurdles. The permafrost and changing road accessibility throughout the year make it difficult to start mining. Despite these barriers, companies see opportunity in these untapped deposits, aiming to establish a reliable supply chain for lithium, which is crucial for North America's energy transition and battery production. The article does not discuss any potential impacts of these mining projects on Indigenous people in Canada’s North.
Prof: Good of you to notice and comment on one missing issue.
Concepts:
There are two main concepts seen in this article, nonrenewable resources and externalities.
Nonrenewable resources are natural resources that do not replenish like renewable resources. To be more specific, they do not replenish within a human timescale once depleted, as they take millions of years to form. Thus, everytime we consume nonrenewable resources, the total stock decreases, making it a finite resource. They include fossil fuels such as oil and gas, as well as minerals such as gold and lithium. They are typically found underground, and the mining process is often problematic in terms of environmental impact.
Externalities occur when a transaction between two parties causes an impact on a 3rd party, one who was not involved in the transaction. There are two types of externalities: positive and negative. As the names suggest, positive externalities benefit the 3rd party, while negative externalities make the 3rd party worse off, and are typically seen as costs. One of the challenges of economics is evaluating what these externalities are and translating them into dollar values. These external costs borne from a certain transaction are called social costs; and once added with the initial costs, we find the total costs. With the total cost, economists can find the actual efficient level of production.
Analysis:
The text explores Northern Canada’s potential as a critical source of lithium, a nonrenewable resource essential for the global green energy transition. Lithium’s use in batteries for electric vehicles and energy storage highlights its role in reducing fossil fuel dependence, yet it presents environmental and economic externalities.
- Nonrenewable Resource: Lithium, while crucial for renewable energy infrastructure, is itself a finite resource. This limited supply is leading to concerns over shortages, with demand for lithium rising faster than production. Analysts predict that without an increase in mining projects, a global lithium deficit could arise by 2025, potentially affecting the energy transition's pace. Prof: An important issue with minerals like lithium is the potential for recycling. While not the focus of the article, the extent to which lithium can be recycled practically would extend the effective supply and reduce the need for expanding mining as quickly.
- Externalities: Lithium mining in Northern Canada offers economic benefits, such as job creation and supply chain opportunities for the battery and automotive sectors. However, it also brings environmental and social costs. The environmental impact involving the mining in Canada’s remote northern regions risks disturbing fragile ecosystems, particularly with winter operations that, while beneficial for logistical continuity, face extreme cold and require significant energy to sustain. Another externalities is the social and community impact caused by Increased mining activity. It can disrupt local communities and traditional lands. However, Canada's mining-friendly regulatory environment and stable political context make it easier for companies to proceed with projects, often in consultation with local Indigenous groups. Prof: The role played by Indigenous groups in northern development is much larger than in the southern part of Canada. While you note that the article makes little reference to this, in the northern provinces and territories of Canada (Yukon, NWT, Nunavut), Indigenous voices are formally involved in the approval of projects, and forms of revenue sharing are therefore also expected.
- Economic Influence and Market Dynamics: As global automotive manufacturers seek direct partnerships with mining companies, the competitive landscape for lithium has intensified. The automaker’s increased involvement aims to stabilize supply chains but may drive up competition for existing lithium assets and spark further exploration in unclaimed regions of Northern Canada.
In sum, Northern Canada’s lithium represents a nonrenewable resource opportunity with both beneficial and adverse externalities. For investors, understanding these factors is key to navigating the risks and returns of the lithium sector in a region with both significant promise and considerable challenges.
Conclusion:
In conclusion, the growing demand for renewable energy, particularly lithium for electrical vehicles and batteries, present significant investment opportunities in Norther Cananda. However, investors and mining companies must also face several difficulties such as harsh Arctic weather, limited infrastrutres, and potential social and environmental negative externatiites.
Prof: How could these externalities be managed? One approach we have not had the opportunity to talk about in class is what is sometimes called a performance bond. The mining company has to post up front an amount of cash sufficient to pay for the cost of cleaning up after the operation is completed, and any costs of major accidents that happen. This cash is invested as a bond that will be returned to the company after it has cleaned things up. If it does not do so, such as if it goes bankrupt, then the money is available to clean up. The public is thereby not left with a legacy mess to deal with.
Wiki #8
Source:
Euro News
URL:
Problem:
The challenge is scaling up carbon capture technologies, specifically Direct Air Capture (DAC), to combat climate change. The text discusses the recent launch of Climeworks' Mammoth plant in Iceland, which uses DAC to remove carbon dioxide (CO2) from the atmosphere. While this technology has potential, there are several key issues.
Summary:
This article discusses the Mammoth direct air capture and storage (DAC+S) plant run by Climeworks company in Iceland. This facility is the largest in the world where 36 000 tonnes of CO2 are removed annually, and stored underground by mixing it with water and injecting it into rocks. In fact, this new sustainable technology uses geothermal energy to turn CO2 into stones.
However, challenges remain such as the high cost of CO2 removal, at approximately $1000 per tonne, and environmental concerns such as the required saltwater usage, the extraction of which could negatively impact ocean habitat.
By 2030, Climeworks aims to reduce the costs of using this sustainable energy to $400-$600 per tonne. Climeworks is also developing projects in Norway, Kenya, and Canada. They have also been selected to build one of three US DAC hubs which were granted public funding by the US Department of Energy.
Concepts:
Clean technologies are technologies that fulfill the following conditions: they provide services that are of similar or better quality than existing technologies, they are cost-competitive or better without subsidies, and they are substantially environmentally better than existing technologies. An example of a clean technology would be offshore wind farms. Clean technologies are an important piece of the fight against climate change and environmental degradation that can allow people to maintain their quality of life without causing as much damage to the environment.
Incentive-based regulation uses financial or market-based tools to encourage businesses and individuals to reduce environmental harm. Unlike traditional command-and-control regulations, which set specific limits, incentive-based approaches offer rewards or penalties to motivate desired behaviors. Examples include carbon pricing (e.g., carbon taxes or cap-and-trade systems), subsidies for clean energy, or tradable pollution permits. The idea is to provide economic incentives for companies to innovate and adopt environmentally friendly practices, aligning private interests with environmental goals.
Analysis:
The first concept of clean/ sustainable technologies is the primary topic of this article. Climeworks, a Swiss-based company, opened their new direct air capture and storage (DAC+S) plant named Mammoth. It is the largest plant of its type in the world, beating their previous plant, Orca. Both of these plants are situated in Iceland to utilize its geothermal energy to power the plants. The Mammoth plant, once fully operational, will suck out 36,000 tons of CO2 from the surrounding air, per year. How does it work? The plant uses giant fans to suck in air, passing through a filter into a collector. Once the collector is full, the chamber closes and the temperature is raised to extract the CO2. After that, the highly concentrated gas is gathered and sent to Climeworks’ partner, Carbfix. This company mixes the CO2 with water and injects it 1,000 metres deep where it naturally reacts with basalt rock, turning into stone. The mineralisation process takes around 2 years. While this whole process can be seen as great, critics are worried this might not be the right solution to fighting climate change. Some critics believe that we should be more worried about reducing our consumption, the source of emissions. Other critics are worried about the large amount of water needed in the process of mineralisation.
Another topic seen in this article is the concept of incentive-based regulation. The article mentions that Climeworks has plans to expand to other countries, such as the U.S., Canada, and Kenya. It mentions that Climeworks has been selected by the U.S. Direct Air Capture (DAC) Hub to build new plants in the U.S., part of a three megatonne proposal. They will receive public funding from the government to build these plants. The concept of the government partially funding the project demonstrates incentive-based regulation, as Climeworks has incentive to build plants in the U.S. through monetary gain. This regulation should attract other companies and sustainable technologies as they can save costs through public funding. Already an extremely expensive industry, as seen in the article about how Climeworks’ Orca plant costs $1000 per tonne, public funding is very significant in encouraging companies to innovate new technologies to fight climate change.
Conclusion:
In summary, this article addresses that while carbon capture technologies like DAC offer a promising tool for removing CO2 from the atmosphere, their large-scale deployment faces significant practical, environmental, and economic challenges, and they cannot be the sole solution to the climate crisis.