ECON371/UBCO2024WT1/Reflections/BrynPrice

Reflection #1

This course material has taught me a lot about the difference between how economists look at environmental standards, policies, and issues versus how philosophers, political scientists, and those who study sustainability analyze those issues. I have taken a course in sustainability, several political science courses, and I am in an environmental ethics philosophy class. ECON 371 discusses that economists study the environment through an anthropogenic lens, specifically how the environment can be preserved and used for human use. When we discussed efficiency, safety, and sustainability standards, I noticed that an overall theme between the three standards is that they are upheld until the policy’s costs exceed the benefits.

           For example, safety standards are policies that act to protect personal liberty from unsolicited health damage until the costs of doing so make it impossible to follow through with the policy (Goodstein and Polasky, p.10). However, costs of safety standards can be difficult to determine since costs can be relative. If one is using a Cost-Benefit Analysis (CBA) to determine when the costs outweigh the benefits, it may be difficult to determine whether the right costs and benefits are being accounted for. For example, it is hard to place an accurate monetary value on the benefit of reducing greenhouse gas emissions versus the cost of reducing those same emissions. As discussed in class, CBA can be skewed to one person’s agenda. Therefore, I pose the question of how does one know when the costs have outweighed the safety benefits of creating solutions to environmental solutions? If we cannot accurately monetize the costs should CBA be used for enacting environmental policies?

           Furthermore, it is clear in this course that the relationship between economists and environmental policies is flawed. My impression of the economist lens, according to this course, is that economists endorse policies that better humans’ quality of life based on monetary values instead of ethics. For example, the Statistical Value of Human Life places a dollar value on how much society is willing to pay to save a life which can be interpreted as putting a dollar value on human life. This is a controversial process as one could argue that putting a dollar value on life is never ethical or allowed. However, there may be precedent to the economist way of monetizing costs and benefits to make decisions. Ethics are important when determining policies that will affect people’s lives because it considers what things are good versus bad. However, it is my experience form philosophy classes that ethics can overcomplicate situations and be time costly as conversations start to go in circles or answers to ethical questions become uncertain. The economist’s perspective, therefore, can be valuable when a decision must be made in a timelier manner without the complex idea of what things are environmentally good versus bad.

           Another topic that has to do with economic environmental policy is the topic of unemployment in an economy experiencing a shift from fossil fuels to renewable energy. As a student from Alberta, I have often thought about how a shift to renewable energy would cause mass destruction of the labour force and send Alberta’s economy spiralling. However, a particular section in chapter 6 provides solutions to the unemployment that is bound to occur from a shift to a more sustainable economy. For example, the textbook mentions that plant shutdowns will occur, but they can offset by government job-retraining programs so that those who lost their jobs can find jobs in a new renewable energy corporation (p. 95). This same section in the textbook also talks about how the amount of job loss that will occur may be offset by the number of green jobs that will be created. This concept is mentioned as the jobs-environment trade off principle (p. 95), but I am not so convinced by this. This principle claims that the types of jobs will shift but the number of jobs will not decline however, I would like to argue that not all jobs in the fossil fuel industry may be transferrable to renewable energy sector jobs and not all of them will allow workers to keep the same lifestyle due to changes in hours or wages.:

Prof: Yes, this is the challenge. Can the jobs which replace fossil fuel jobs with the 'just transition' provide the same lifestyle?

            Overall, I have learned about new methods to offset unemployment that could occur during an environmental shift and I have also gained a deeper understanding about the economists’ lens and how it related to other perspectives and how it is helpful. I am not so convinced by some of the solutions provided as I cannot see them being practical, however I see the value in having theories that can contribute to a solution that will hopefully work in real-world situations. 

Source:

Goodstein, E., Polasky, S. (2020). Economics and the Environment (9th ed.). Wiley.   

Reflection #2

The second half of the course covered a broad range of environmental economic concepts. Those of particular interest to me were concepts covered in chapter 15 entitled, "Incentive-Based Regulation: Theory," (p.267). This chapter discusses key concepts such as incentive-based policy and command-and-control policy which I think are highly relevant to environmental politics today. One of the largest issues in regard to finding a global solution to combat climate change is trying to implement policies that parties are willing to agree to and follow. However, as discussed in this course, this is an objective that is easier said than done.

This course showed me that when governments try to find a fast fix an overabundance of waste, marginalized groups tend to be negatively affected. For example, when the government puts a waste disposal site near low-income housing, it becomes an environmental justice issue since certain groups of people should not experience negative externalities of climate change more than other groups. This issue is also present from a global standing. By this I mean wealthy countries tend to produce the most amount of greenhouse gasses and allow the consumerism industry to lose control and produce tons of garbage. While wealthy countries produce the most waste, developing and poor countries tend to be the most negatively affected by actions of larger countries. These countries however cannot do anything to stop larger countries due to having little political power. From what I gather form this course, one of the only ways to hold developed countries accountable for their emissions is if that country’s government enforces policy.

Incentive-based policies, as defined in the textbook on page 267, are those that depend on economic market incentives to reduce emission levels and lower control costs. Primary examples of this type of policy are pollution taxes and cap-and-trade policies. In particular, the Canadian carbon tax has been causing much division in Canada between the oil-producing province of Alberta and it seems, everywhere else. This tax was made to disincentivize consumers from using fossil fuels. As a person coming from Alberta with a family with income from the fossil fuel industry, understand why Albertans are so against the tax because it is ultimately threatening many peoples’ livelihoods. However, Alberta’s fossil fuel industry is a main contributor to Canada’s national emission levels and, as discussed in class, the carbon tax has shown that it is working. Consumers are starting to limit their use of fossil fuels. However, as previously discussed, this tax will negatively affect those with lower income since they will be paying more tax for a resource they need to get around. These are people who cannot afford to buy an electric vehicle. Evidently, this incentive-based policy has practical drawbacks but policy makers and cost-benefit analyses are not necessarily looking at how policies cause these drawbacks but rather how they can maximize revenue but minimize emissions. To do so however may cause real-world problems for those the policy is affecting. Advantage of incentive-based regulation may be that it is cost-effective, provides incentive for firms to innovate, and reducing costs of information gathering. However, disadvantages are also numerous such as it requires monitoring and enforcement, there may be price volatility, requires a sustained political commitment, and more. This leads me to think that we still have not found a perfect solution, but it also makes me wonder if there will ever be one? Will someone or some people always have to suffer for the good of the whole?

Another type of incentive with both drawbacks and advantages is command-and-control policy. This policy requires firms to all meet a uniform emission level and legally mandates the implementation of pollution-control technology. An example of this policy would be permit systems where firms are only allowed to produce a certain amount of emissions but the permits can be bought and sold. Disadvantages of this is thin markets, access to permits and barriers to entry, price volatility, and the idea that permits tend to “legalize” pollution. However, an advantage of this policy, in my opinion, is that it holds all firms to the same emissions standard and if they do not meet it, they can be heavily fined, and it seems that there is nothing firms hate more than losing money. Again, this policy has many drawbacks.

Overall, this course has been educational, but it has also painted a rather bleak picture of what governments are doing to combat climate change today. It seems that there have been many solutions offered to climate change but there are always drawbacks to them that people are opposed to. If people are unwilling to adapt to new policies or change their use of single-use plastics, I think the globe will struggle to make any progress on combating environmental issues. Given that there has been a sharp rise in natural disasters in the last view months, such as the record-breaking hurricanes in Florida, it is clear that the globe’s climate sate is getting worse. For this reason, it is so important that we find a policy that works for as many people as possible but is also seems that no matter what the policy is, certain groups will be more negatively impacted than others which is something people will have to come to terms with, my Albertan self included.

Thank you for this semester!

Prof: I can imagine it is tough being a Canadian from Alberta these days. I can't fault anyone from Alberta being concerned that transitioning away from fossil fuels threatens their standard of living and livelihoods. It seems many of those who are worried about the environment can't understand that there are people who are right at the center of the tradeoff between the environment and their own standard of living. It isn't going to be easy to find a fair way to adjust and deal with our global threats.