ECON371/UBCO2024WT1/Reflections/AyaSofiaMariani
Reflection #1
Prior to taking this course, the title “Economics of the Environment” made me wonder what aspect of the environment could be calculated with the economic method and for what purpose. I think environmental conservation is important, so I was curious how the environment gets calculated mechanically.
My impression after actually taking this course, I felt a detachment between the conservation methods and us, humans. To elaborate on this, a lot of social aspects were ignored from the calculation. Yes, the study of economics is the study of human decisions, so we cannot completely detach our preferences out of the formula. Although, calculating the “optimal” or the most “efficient” point of pollution or externality felt more technical than ethical. Using actual numbers for policy (decision) making is effective, but I felt making decisions only based on these numbers were very dry and unethical.
My major is International Relations so most of the courses I take focus on the social reaction of the policies and social structures implemented. As I study in these courses, it makes me think that the most “efficient” and “optimal” decisions are not necessarily the closest path to achieve what the United Nations is aiming for as a sustainable goal. This is because the calculation that leads to these most efficient points tend to ignore several indirect costs. And these costs are mostly paid by the minority of the population. This ignorance makes me feel the detachment.
In addition, measuring the value of the existence of an endangered species with price is another factor that makes it seem detached. This is a difficult measurement to make, because we cannot account for all the variables that determine the value of that species just from our desks. Our ecology is balanced out because of that species being in the chain so even though they don’t have a direct impact on humans, they should be valued in the same way.
During class, we have encountered the idea of nature having their own rights to protect themselves instead of being possessed by humans. This idea is already recognized by the United Nations and several other countries as “rights of nature.” While nature can’t speak human language, this law makes it possible to speak for themselves. I think this is more effective than putting a price and starting acting on it if it surpasses the cost of protection. Because this is not only protecting the environment itself, but also the rights of the indigenous communities, which their voices often get ignored. This will make the process a bit more tangible.
Despite this, concepts such as externalities, and coase theorem made me feel more optimistic in a way that they are more relatable for the minority who get easily ignored. Just to briefly reflect on these concepts, “Externality” exists when ‘third parties’ not involved in an economic decision or exchange are impacted. And “Coase Theorem” states that when property rights are clear and negotiation is costless, then parties affected by an externality will negotiate to the efficient solution. The study of the environment is generally motivated by the purpose of protecting the vulnerable, so these concepts help us to shift back our perspective to where we intend to protect. Although in any case, as it is also stated in the definition of coase theorem, our resources are scarce so the economy always shifts towards the most efficient solution. This made me change my perspective on the idea of “efficiency” and “optimality” because as the example of the textbook described, creating an incentive to reduce pollution instead of adding a cost is more efficient to encourage big corporations to emit less.
As for the incomplete economic framing, it fails to account for the individual’s decision making. For example, from the course content, we understand that the environment, specifically, the air is a public good. So even just one person polluting the air by smoking will give a negative externalities to all the other people in the same atmosphere. Under these circumstances, we are good at calculating the efficient level of pollution, but to what extent an individual's preference is incorporated in the calculation. The cost of mitigating the pollution is also high so in most cases, people rely on free riding so the actual amount people pay and the willingness to pay they present in surveys do not match. This leads to our next question, does the mechanically collected willingness to pay correspond with the actual amount people are willing to pay on top of the current tax rate? We suspect that in most cases, this will be a No. This will make me wonder, is this efficient level really efficient? By incorporating the individual’s decision making into the formula, it will also calculate the cost for the minority people, thus coming out with a more accurate efficiency.
Prof: It seems that the distinction I have made, and the textbook has made, between efficiency and optimality has not been clear to you. One of the things that lead me to choose this text was that the authors are clear that economics can identify efficient solutions, where the assumptions of the analysis hold, but that optimality is a larger concept that involves values beyond those represented by efficiency. A number of the things you mention in the rest of your reflection would fall into those values beyond ...
Reflection #2
In the second half of the semester, several perspectives considering the different consequences with environmental policies or green energy sources influenced my thoughts towards these policies. Specifically, the last two chapters made me raise the question “with these policies, what lives are we protecting?”
As I have mentioned in my first reflection, many of the policies are based on efficiency. And these efficiencies are to serve the policymakers who are usually in the elite class in the society. The concepts such as “willingness to pay” explains why we have environmental inequality. For example, people with lower income get segregated to residential areas where they are less environmentally friendly, people in poverty desire more on spending their money on necessities before improving the quality of their lives and so on. In addition, the social culture I have observed when I visited Nigeria this summer also explains the reason for the inequality. Countries like Nigeria have a big gap between the rich and the poor. These wealthy groups are usually only interested in conserving the quality of their lives, thus their environment instead of the effort to improve the whole society. For example, the facilities that the rich people would use are guarded by fences to limit access and hygiene is maintained. On the other hand, the hygiene of the streets was far less treated. The division of access to a clean environment becomes more severe as the country is less affluent. This shows us that the people with power could decide what lives they will protect. These relate to the concepts such as “Political Economy” and “Inefficient subsidies common” we have discussed in class.
As an International Relations major, the courses I often take focus on how the marginalized groups are affected based on the activities of the bigger power, and how we could incorporate the uncalculated costs of innovation. For example, we have discussed the exploitation of the cobalt miners in the DRC, where cobalt is one of the main materials for all of our rechargeable devices, including the renewable energy source. Therefore, to produce these “renewable energy,” marginalized people have to risk their life, living and working in a heavily polluted environment to get their income. It is ironic that the people that are working to collect these minerals to build the renewable energy source don’t get a chance to access a clean environment because the global north is only interested in the environmental conservation of their own country. Relating this to my previous point, the efforts for a healthier environment is driven by the interest of the population with power.
However, discussion on “Global Agreements” broadened my perspectives on the environmental policies, emphasizing that humans are also part of the environment and that policies should protect human activities as well. Prior to this, I was more focused on how we could mitigate the environmental inequality by recognizing the uncalculated cost that the marginalized population and natural lives are paying. The concept of Anthropocene suggests that the deformation of the earth in recent decades is affected by human activities. Therefore, I observed these policies are to control our activities to mitigate the damage. So I have detached humans from the entities to be protected. This made me realize that studying from the interdisciplinary approach using lenses of anthropology, sociology, or even Indigenous studies is limited to considering the cost of protecting the habitat for biodiversity. This made me realize that calculating the opportunity cost of protecting natural habitats is also important for maintaining economic growth and improvement in our living standards.
Prof: It sounds like visiting Nigeria had an impact on you. I have spent some time in several lower income countries over the years, and it has left me both impressed by how resilient and decent people can be in situations that those of us who grew up in rich nations cannot imagine, and left me awestruck at how so many people in rich nations just don't understand how good they have it. While the issues that concern us in our politics are important, 3/4 people in the world would gladly trade places with even those of us in rich countries who most of us consider struggling. I hope your experience continues to be important to the path you pursue.