Course:ECON372/OK2019WT2/Topic8
Principles of Analysis
Due system time (GMT), 07:59, 5 February 2020
Group #1
Summary
The article discusses the concept of circularity in value chains and how important it is for the fashion and clothing industry to embrace this concept to remain viable businesses in the future. The fashion industry is inherently extractive as large amounts of raw materials are required as inputs for manufacturing. In addition, Profits for these firms relies on the transient nature of fashion as customers are constantly purchasing new clothes to keep up with current trends. This leads to an industry that generates massive amounts of waste while simultaneously depleting stocks of natural resources. The article defines a circular economy as "one that designs out waste and pollution, keeps products and materials in use and regenerates natural systems." Firms that are able to apply this concept into their business models will be able to tap into significant economic benefits if implemented effectively. The article discusses some ways fashion companies can begin to implement circularity into their business such as using recycled fabrics and materials or reducing demand by increasing product life span and promoting sustainable consumption. Three steps are outlined for firms to follow if they seek to implement circularity into their business models. The first is "explore new business models" which entails rethinking the traditional model for the firm and thinking outside the box to achieve a more systems based approach. The second step, "invest in innovation" is critical to achieving a circular economy as there are simple some wastes that currently cannot be eliminated from value chains that will require new technologies in order to recycle, reuse or redesign products. Finally the third step is "push the industry forward" which simply involves pushing competitors and other industries to develop circular economies.
Analysis
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 10 | |
| Article Relevance (10) | 10 | |
| Summary (20) | Sorry, my mistake reading time stamp. Edits were on time. | |
| Course Related Analysis (30-50) | ||
| Extended Analysis (0-20) | ||
| Presentation (10) | 3 | |
| Total | 41 |
Group #2
Link: https://arstechnica.com/tech-policy/2020/01/trump-plans-to-modernize-environmental-impact-reports/
Summary
Recently, US President Donald Trump has proposed a major overhaul to the National Environmental Policy Act (NEPA). This environmental legislation requires the consideration of the environmental impacts of projects that the federal government is involved in. The new rules limit both the time and scope of environmental impact analyses in order to speed up the process of federal projects. Environmental impact statements would now need to be completed within two years and environmental assessments would be limited to one year. Moreover, indirect environmental effects will no longer be considered. Critics of the new rule argued that there would not be sufficient time to perform a thorough evaluation and a scaled-down scope would omit many environmental impacts. Various environmental groups are planning to contest the changes in court.
Analysis
This article relates to the chapter by demonstrating how environmental impact analysis must be carried out before a substantial public project is undertaken. A typical environmental impact analysis usually consists of both direct and indirect impacts analyses. Referring to the article, not considering the indirect environmental impacts such as climate change during environmental assessments could bring up more potential problems and environmental destruction in the future. For example, it is not enough to consider damage to a forest caused by building a road, federal agencies should also have to evaluate the pollution released by the vehicles that would inevitably use that road. As such, a thorough assessment could improve environmental sustainability and reduce environmental costs by identifying more potentials issues and making better decisions in the long run.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 10 | |
| Article Relevance (10) | 10 | |
| Summary (20) | 20 | |
| Course Related Analysis (30-50) | 25 | More depth would be good. We have talked about externalities. In this case, by not considering indirect effects, the full external cost is not being measured, and the result would be too much of the activity - or too little investment in mitigation - relative to efficient solution. We have also talked about transactions costs. The time constraint substantially increases the transaction cost, the amount that must be paid to do the assessment well. This too would be expected to reduce the amount of environmental protection. |
| Extended Analysis (0-20) | ||
| Presentation (10) | 10 | |
| Total | 75 |
Group #3
Summary:
Since 1978 the Kimberly Region in Northwesten Australia has been the target of a campaign to cull the population of wild Donkeys in that region. The Donkeys are descendants of draft animals imported earlier in the countries history that were abandoned as the country industrialized. In recent years the culling programn has reduced the population from more than 500,000 to around 300. The program receives a miz of private and public funding, with 50% from the state government and 50% from the Kimberly Cattle Industry. A cost-benefit anaylsis compiled with the cattle industry in mind suggested that for every wild donkey removed from the region another 0.7 units of cattle. The reduction of the ecological impact of the Wild Donkeys is also considered, but is difficult to quantify. Now though, 4 different strategies are being considered to manage the remaing donkey population. These are 1:maintain the population at around 3k, 2:no change in control methods resulting in a slow increase, 3:total eradication of the feral donkey population and 4: a 10 year cessation of control measures to allow an increase in population. The 2nd option was recomended as most fitting by the report, despite eradication being the initial goal of this long term project.
Analysis:
The Cost-Benefit anaylsis that underscores the culling of the wild Kimberly Donkeys uncerscors several important points about this type of anaylsis. The perspective is primarily economic, with the intended public identifiable via the form of analysis and the listed donors, a regional cattle induestry that stands to rear more cattle on land currenlty inhabited by feral donkeys. The current situation of the project are clearly listed, with monetary value calculated mostly though the relation between how many more cattle could be raised on the currently occupied land. The shift in the goal of the culling project from total extermination to maintenance may represent either a new economic reality in which increased beef production would not bring in revenue sufficient to justify the cost of more intensive control measures, or perhaps ecological factors have changed in such a way that the maintenance of the wild donkey population is an acceptable, or even attractive outcome.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 10 | |
| Article Relevance (10) | 10 | |
| Summary (20) | 20 | |
| Course Related Analysis (30-50) | Sorry, my mistake reading time stamp. | |
| Extended Analysis (0-20) | ||
| Presentation (10) | 8 | |
| Total | 93 |
Group #4
Three ways China can make the New Silk Road sustainable
Summary: China’s Belt and Road Initiative is one of the largest and most heavily scrutinized global development strategies adopted by a country in our history. The initiative involves was announced in 2013 and involves infrastructure development and investments in nearly 70 countries and international organizations in Asia, Europe, and Africa. This article takes upon the challenge to propose possible implementations that can be made by Chinese authorities to ensure that the project is implemented with minimal cost to the environment and society as whole. The article presents, as suggested in the title, three ways China can make the New Silk Road sustainable. The authors, Shouqing Zhu and Sha Song, goes on emphasize the controversial aspects of the idea and backs up their claims by stating that “China is the largest emitter of greenhouse gasses in the world, responsible for 30% of global carbon emissions.” From this, it is clear than any further development programs should and need to consider the environmental as well as the economic impact as a result. Furthermore, the article recognizes that China is not without concern for the potential impact and it is shown that “China has also been a leader in renewable energy investment, accounting for 36%, 40% and 36% of the world’s total investment in hydro, wind and solar respectively.” For the proposed solutions, the article finds that China has in the past implemented voluntary measures to enhance social responsibility in Chinese corporations, and the solution is simply to make them mandatory. The goal of this, is presented with an example where the Ministry of Commerce would be able to “consider including a complete environmental impact assessment as part of its approval requirement for overseas investment projects.” Furthermore, the article suggests that in order to ensure a sustainable and environmentally friendly way to complete the BRI, it requires “joint efforts from investors and recipients.” The authors suggest this is best implemented through host countries creating a conducive and stable environment for green investment. The article concludes with an assumption that if the three suggestions are implemented as is, the authors believe the BRI “will be a win-win solution for development and sustainability”
Analysis: The BRI is still in relatively early stages, although massive progress have already been made thus far, it still remains to ensure that the project is both profitable and sustainable for all parts involved. This said, there have been countless efforts to construct several impact analysis reports, varying to a large degree in results, depending on the parameters, factors included and most importantly, the interest groups. As stated in the textbook page 126“in its concrete application, good analysis can be politically controversial because it can discover results that are contrary to the interests of politicians, agencies, and interest groups.” Although important to keep in mind, this quote does not suggest that any such efforts made have been incorrect; however, serves only here as a reminder that it remains important to analyze the analysis. Furthermore, the first solution proposed in the article enables government branches to require environmental impact assessment, which could greatly aid the project’s potential for minimizing its denaturalizing effect on those areas affected. The article does well to emphasize the need for further assessment reports and a call for more stringent restrictions on actions taken both by the Chinese government and by involved investors and host countries. With the primary goal being to provide a description of the environmental impact of the BRI, together with any adverse environmental effects that cannot be avoided and also the effects of alternatives available to the BRI. Furthermore, the proposed solutions should also make it possible to consider the relationship between short-term uses of the environment and the maintenance and enhancement of long-term productivity, together with any irreversible and irretrievable commitments of resources that would be involved. Due to the size and political influence this project plays in international relations, such reports are often criticized and dismissed as it is extraordinarily difficult to perfectly ascertain exactly which areas and to what degree will be affected as a result of the BRI.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 10 | |
| Article Relevance (10) | 10 | |
| Summary (20) | 20 | |
| Course Related Analysis (30-50) | 45 | |
| Extended Analysis (0-20) | ||
| Presentation (10) | 8 | |
| Total | 93 |
Group #5
https://www.denverpost.com/2020/01/31/colorado-outdoor-recreation-industry-sees-profile-grow/
Summary:
The article discusses the new growth that the economy is seeing in respect to the outdoor recreation industry. It talks about the many different trade shows and panels that have been prevalent in recent years that cover many different topics within the industry, such as marketing campaigns and the issues of climate change. The numbers presented show that the outdoor recreation industry is growing at a rate of 3.9% compared to the overall economy’s 2.4%. Also stating that the industry accounted for 2.2% of the United State’s GDP for the year of 2017, which works out to about $778 billion.
One of the main points stressed within this article is the preservation of land, for both the customers within this industry space, as well as the agriculture industry. One of the main hopes for this boost in industry notoriety is to partner with rural communities, to help keep natural landscapes in their current forms, and help the economies of these rural areas prosper. By growing as an industry, the outdoor recreation industry can help benefit others within their market space.
Analysis:
In relation to the course thus far, this article highlights a few different aspects. It shows how an industry can benefit off open access resources such as natural landscapes to stimulate the economy. With regards to chapter 8 specifically, we can see the articles relation to the topic of economic impact analysis. It shows how encouraging the preservation of more rural communities can impact not only the outdoor recreation industry, but also local business within these communities. You can see the correlation between the expansion of this industry affecting many different aspects. For example, if one was speaking about national parks, the preservation of these parks could lead to many jobs in the future, and possible increased tourism rates to name a few outcomes. While at the same time this preservation could prove negative for many other natural resource industries such as logging, or fisheries. It is important when doing an economic impact analysis to weigh out all the aspects and find the right balance between positive and negative.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 10 | |
| Article Relevance (10) | 10 | |
| Summary (20) | 20 | |
| Course Related Analysis (30-50) | 50 | I like how you noted that the industry relies on an open access resource. |
| Extended Analysis (0-20) | ||
| Presentation (10) | 10 | |
| Total | 100 |
Group #6
Summary :
This article talks about both the personal and social influence that increasing the minimum wage could bring us. At the beginning, the author states that during the long weekend, his family go shopping using self-checkout in three stores, without any assistance of a cashier. He claims that by increasing the federal minimum wage from $7.25 to $10, $12, or $15, more larger corporations with big budgets will weigh the increased labour costs and elect to invest in technology to displace workers, since it is a more efficient and sustainable way to control the cost. Small family and midsize businesses will be disproportionately hurt by the extra cost incurred. A good example would be the Amazon Go stores. It is a new kind of store with no lines, no checkout, and obviously, no cashiers. Smaller grocery shops or corner stores will lose in the competition with larger stores since they can afford neither the increased cost of wage of the workers nor the expense of new technologies. As the minimum wage increase, some workers who are getting minimum wage will have a better life with higher income, while many other workers would lose their jobs since hiring them is not efficient and beneficial any more for the companies. The author also uses the example of a restaurant. He claims that most service-sector businesses have thin margins. Increasing the minimum wage and their cost could make them close the company. If the restaurant raises prices too high, they will lose the competition with other restaurants, which might pay people under the table with lower wage or deploy technology. The author also used the example of Seattle minimum wage’s move to $15 an hour a few years ago, which resulted in workers given fewer hours and experiencing a net loss in pay. The author also worried that such a high minimum wage would let people feel comfortable with working the entry level job and lose the motivation to work harder and seek for a better and more professional job. He uses his nephew Matthew as an example to show how a high minimum wage could let people feel satisfied and losing their potential to get a better life. At the end, the author suggested people to learn more and get a better education, work harder and don’t satisfy with a minimum wage.
Analysis:
This report said about the effect of increasing minimum wage for the society. Usually, increasing minimum wage is used to counteract inflation and local economic growth. However, there are two more significant influence which is a problem between how the policy help families to lift out of poverty and the lower-payment worker would lose their job or make their family income decrease. Policy makers need to consider the social feasibility when making new policies. Government needs to control the unemployment rate in a suitable range. According to the textbook, “when performing benefit-cost analyses, we must proceed according to the with/without principle.” That is, we need to compare the situation of what would happen if the minimum wage is increased to $15 per hour, or if it is kept unchanged. According to the author, some of the workers with minimum wage would be benefited with the higher minimum wage, while a lot of other unlucky workers might lose their jobs. Based on Benefit-Cost Analysis in chapter 8, it shown that if minimum wage was increased with a big gap, which would bring a decrease on average income of labor. In fact, this policy hurt the profit of low-payment workers, but not protect them. In the labor market, if workers' wage increase, firms would try to balance their cost which they lay off some employees. The demand of labor market would shift left which creates a new equilibrium point. Overall, a numerous factors can affect how to establish the impact analysis, which depend on parameters such as environmental factors, local situation. According to a similar situation happened in Seattle, the local government increased minimum wage from $9.47 to $13, which caused income of worker increased 3%, but the supply of career decreased 9%. The total income was reduced $125 per month.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 8 | More of an opinion piece than a news article |
| Article Relevance (10) | 4 | Weak connection to resource economics |
| Summary (20) | 20 | |
| Course Related Analysis (30-50) | 35 | Analysis not much connected to class concepts. Minimum wage and employment is typically a first year topic. Reality is actually more complicated. Something of a public good style problem, in that one employer cannot increase wages on own, as will lose out to competition. However, if all forced to pay more, not much impact on competition. Technology substitution is an issue though. |
| Extended Analysis (0-20) | ||
| Presentation (10) | 10 | |
| Total | 77 |
Group #7
Summary: This article, authored by William Laurance and David Salt is an opinion based take on how environmental impact assessments (EIA's) are falling short to predict the seriousness of certain industrial developments. EIA's are intended to protect the environment and the organisms that occupy it. Governments rely on these reports throughout their approval process for major developments such as dams, mines, highways and other large scale developments. The main problem that the article identifies is that these assessments rarely stop bad projects that endanger species or contribute to deforestation rates from gaining approval. The article depicts four forces that contribute to these projects passing their EIA. Insufficient scope: negative externalities are present within these projects and are often overlooked when considering the consequences of the development. Inadequate investment: detecting endangered species is expensive and time consuming, EIA's try to act cost effectively which involves overlooking how the project might implicate certain species. Vested Interest: development companies are responsible for hiring their EIA's which creates immediate pressure for the assessment to be favourable for the company. Should an EIA prohibit development, they may find it very difficult finding a job in the future. Poor governance: development is often tied to economic growth and political prowess. Once again, a situation where EIA's must provide unethical results is presented. The article concludes with simple suggestions aimed towards mitigating the problem. These recommendations have little context or factual evidence but the closing remarks suggest not to believe EIA's or the government in saying that their projects are not harmful for the environment.
As a disclaimer, this article lacks validity, has a strong bias and even some spelling/grammar errors. However, the concepts discussed are very relatable to the course material and provide the framework for extended analysis.
Analysis: Despite the article failing to recognize important economical aspects associated with major developments, the core principals within this article identify an area for concern. The textbook defines environmental impact analysis as "the identification and elaboration of all repercussions of a designated activity on all or part of an environmental resource base." The article parallels this concept while the authors place an additional focus on specific areas for improvement. Without question, EIA's are instrumental to ensure a sustainable future and the public deserve to have an honest understanding of the externalities associated with particular developments but unless more serious recommendations (other than the ones at the end of the article) are brought to attention, economic incentives will prevail and the pattern of unreliable and unethical EIA's will continue. Throughout developed countries, EIA reports are considerably more accurate and effective but certainly not perfect. However, perfection is not the ultimate goal; EIA reports are aimed to provide serious recommendations that highlight all of the positive and negative impacts associated with specific sites. By presenting the facts and transferring the final decision to government officials or politicians, a more wholesome analysis will be available to the public without EIA's being responsible for derailing or promoting an unsustainable project.
Extended Analysis: Now, if economic factors are taken into consideration, the narrative is restructured and different perspectives may be formed. Major developments play a crucial role in optimizing economic values, not only in monetary terms but also with regards to employment, net exports and global competitiveness. It would be unfair to suggest that protecting the environment at all costs would be the most socially optimal solution when all of these other factors must be considered. In order to determine what the most efficient marginal social benefit and marginal social cost would be, a cost benefit analysis must be completed. Following the impact analysis, actual values must be placed on the alternatives and a measurement of the marginal social cost plus the environmental cost, and the marginal private cost will indicate the most efficient level of environmentalism and development. By determining the most efficient solution, major development projects will be able to provide economic benefits while maintaining ethical environmental action.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 10 | |
| Article Relevance (10) | 10 | |
| Summary (20) | 20 | |
| Course Related Analysis (30-50) | Good analysis. My error on time stamp. | |
| Extended Analysis (0-20) | ||
| Presentation (10) | 10 | |
| Total | 100 |
Group #8
Summary
This article written by Janine Dixon talks about forest fires and the impact they have on the economy. She argues that it is important not to measure the impact of a forest fires by GDP using the conventional way. Measuring by GDP takes into account all the recovery costs and money spent which is a positive but doesn’t take into account the destruction and long-term effects of a fire. This article mentions many economic positives for forest fires but also lists the short and long term negative effects that are not taken into account. Some of these long-term effects include health problems, PTSD, and loss of animal species along with many more. Janine believes that GDP, GNI and Leisure-adjusted GNI are not enough to show the economic impact of forest fires. This model does not work when assessing tragedies and disasters as any other things need to be taking into account when analyzing the impact of a forest fire.
Analysis
This article directly relates to chapter 8 and principles of analysis throughout the article in many different instances. The article is all about analyzing the economic effect of forest fires and how we are currently analyzing it all wrong. One of the ways this article relates to the chapter is that it is talking about the loss of species and contamination of water as they are important for the agriculture and the environment. This leads to loss of future tourism and income for the national park but at the time leads to money spent and work being done to clean up the issues. This relates to chapter 8 as it talks about ignoring the enjoyment of visitors and count money spent to fix the issue. Chapter 8 talks about economic impact analysis and more particularly about employment impacts and effects on income. The article relates to this as it talks about how forest fires cause the loss of workdays, and destruction of assets including businesses are a major negative impact on the economy. GDP might not show this because of the costs to regain assets but it takes a big toll on the community affected. Impacts are often not assessed for a specific place as mentioned in chapter 8 and this happens to be the case with forest fires as we look at the economic impact of the country but not the community affected. Janine conveys that when we analyze forest fires, we need to include all social costs when looking at the impacts. Chapter 8 makes us aware of this and that many times we pretend to do cost-benefit analysis, but we fail to include all social costs which is extremely important.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 10 | |
| Article Relevance (10) | 10 | |
| Summary (20) | 20 | |
| Course Related Analysis (30-50) | 50 | |
| Extended Analysis (0-20) | ||
| Presentation (10) | 10 | |
| Total | 100 |