Course:ECON371/UBCO2024WT1/Reflections/WilliamLloyd

William Lloyd - Reflection #1

Many things from this course have had an impact on my thinking and understanding of the world and the environment. The main 3 topics are the short-term focus of economics and the economy in general, the negative externalities of so many of my daily actions, and the failure of economic factors at addressing cultural and ethical considerations.

What we’ve seen in class is that the reason firms typically resent sustainable policy and regulation is because of the high upfront costs to upgrade their technology or make changes. They are so focused on the short-term effects, and struggle to look at the bigger picture. This is true of the general economy as well, especially when we talk about the stock market. Investors almost always demand growth. If from quarter-to-quarter their profits did not increase, investors won’t be happy and the stock market reflects that. Firms struggle to sacrifice short-term gains for higher long-term gains because it would negatively affect their current share price performance. But we know that this is not sustainable. The economy cannot keep growing at this rate, our planet cannot handle it. As I am currently taking an investment course, this course has affected how I want to make an investment strategy. It has made me research more “green” investments, such as the iShares ESG Equity ETF Portfolio. This ETF focuses highly on sustainable firms, hence the “ESG” which stands for environmental, social and governance. This course has given me the confidence to say that funds like this one are the future: firms with a long-term perspective on the environment are some that should succeed in the future, not just short-term quarter-to-quarter. In brief, this class has affected how I will build my investment strategy in the future.

Secondly, while externalities have been discussed in many of my previous classes, this class specifically has pushed me to reflect on my own actions. Instead of looking at some of my actions as just my benefit versus private costs, I’ve started pushing myself to think about what the social cost of my actions are. For example, driving to school. I live in Glenmore, only a ten minute drive to school. It only costs me a few dollars to drive back and forth, and I have to benefit from driving comfortably in my car. However, the true total cost is not just my cost of fuel, it has to include my greenhouse gas emissions caused by my car. Because of this, I’ve focused on trying to bike more to school. What I’ve found is that it actually takes about the same time: while the bike ride is approximately 5 minutes longer, I don’t have to worry about parking and walking from H-Lot to my classes, I can just bike right to the building. I also benefit from the physical exercise improving my health, and the social cost of greenhouse gas emissions disappear. All in all, the focus of negative externalities on the environment has caused me to reflect on my actions and alter them.

Prof: A win-win-win solution. Cycling saves money on gas and parking, provides exercise in the same time that you would be sitting in your car, and reduces externality costs - emissions and contribution to congestion.

Lastly, the course has caused me to reflect on the limitations that economics has on cultural and ethical considerations. There are some things that just don’t have a price but still need to be protected, like culture and ethics. For instance, let’s have a look at the pipeline being built across BC. Economically, the pipeline makes sense: ship out a bunch of oil internationally and make lots of money, and pay off those who contest it. The problem comes to the pipeline passing through Indigenous land. I don’t believe that there is a price that makes sense to give the right to the pipeline to go through their land. While some might accept a price, I don’t think that price is reflective of the actual cost, they might just accept it because they need money in the short-run. Thus, there are some things that are just priceless, especially given the context of Canada’s history with Indigenous people.

In conclusion, this class has made me reflect a lot on the relationship between economic concepts and real life examples. It has forced me to have a better long-term focus on the world and on my actions. I look forward to the rest of this class. I am excited to discuss local examples of environmental economic issues.

Reflection #2

I think the biggest thing this class has taught me is the amount of inequalities relevant to sustainability, as well as the impact politics have on attaining sustainable measures. It has opened my eyes on the difficulties of achieving sustainability, especially globally.

Before taking this class, I hadn’t quite grasped the amount of inequalities that occur when wanting to achieve sustainability goals globally. I think the first and biggest inequality is regarding developing vs developed nations. After countries such as Canada and the U.S. polluted a ton during their industrial revolutions, they expect developing countries not to do the same. It’s quite unfair that we were able to pollute a ton and become a developed nation, and then tell other nations that they can’t do the same. But, it’s sort’ve like a sunk cost. The damage has been done, we now must work together to save the planet, even if it is very unfair. So you would think that with this unfairness, countries such as Canada and the U.S. would be willing to financially help developing nations to make it more fair. However, as discussed in class, these countries are not willing to pay nearly enough to make an actual impact. And this also ties in the impact of politics on sustainability. Depending on who’s in power, we would see very different responses. With Trump now back in power, I don’t think we will see many policies favouring the environment…And I don’t think economics takes account of this enough.

I also want to mention the inequalities regarding ‘clean’ tech. When looking at what we North Americans consider ‘clean’ technology such as electric vehicles and solar panels, there’s a lot of factors that don’t make them too ‘clean’. The biggest factor I think about is how minerals for these technologies are sourced. The batteries in these vehicles and for energy storage are typically made of Lithium. The process of mining for Lithium actually causes heavy emissions. Many of these mines are also located in Africa, where they have children working in extremely bad working conditions. So are these technologies really ‘clean’? I’m not too sure. While external costs in economics tries to cover these problems, I don’t think you can quite put numbers to these inequalities. How do you justify with prices kids working in horrible conditions? I think that is a big limitation to economics.

Lastly, another thing I found interesting relevant to this course is my experience of talking about oil and gas to Albertans. Growing up in Quebec with parents very involved in environmental protection, I  thought it was obvious for everyone that oil production in Alberta is inherently bad because of its impact on the environment. I also listened to a podcast featuring Yvon Chouinard, the founder of Patagonia, where he says the first thing we need to do to fight climate change is shut down the dirtiest processes of mining fossil fuels, and he calls out Alberta. However,  from conversations I’ve had with Albertans, they don’t share the same opinion and neither is the problem that simple. I was quite shocked however to hear from a friend, one who is very outdoorsy, that they are fully in support of the oil and gas industry in Alberta. They explained that it’s the backbone of our economy, so we should continue to fund it and expand it. I learned two main things from this conversation in relation to economics: one, problems like this are really not that simple. There are so many factors affecting them, it is difficult to take all of them in account. Two, what may be super obvious for some people may not be for others, and I mean that in both directions. To many Albertans, it seems super obvious that it’s the backbone of our economy, and to others, it’s clearly super environmental damaging.

In conclusion, this class really broadened my view on economic environmental problems by showing me how complicated these problems really are, and how many dynamic and external factors play a role.

Thank you very much for the semester, I really learned a lot!

Prof: It is complex. Within environmental circles in Canada, Alberta stands out in many ways. The fossil fuel industry is the backbone of the Alberta economy, and a significant contributor to the Canadian economy. Albertans earn the highest average wage of any province in Canada, and that enables them to afford a lifestyle that many are frightened of loosing. How do we transition away from fossil fuels when there are people who depend on it, and who will have to give up a lot as we transition? This is not easy, and the reality is it has to be solved through the political system. I am short of answers on how to get there.