Economics can be defined as the study of how human beings are able to produce products, distribute, and consume them. Economics tries to understand how different parties like industries, businesses, and governments distribute their resources to gratify their needs. It is through economics that we can get to understand better how human beings are utilizing the limited resources to maximize outputs and satisfy their unlimited needs (Halton, n.p). The environment plays a crucial role as far as the economy of a given country is a concern since it acts as a source of significant resources that are used during the production process.
Q#1. “Environmental Economics, Ecological Economics, Green Economics, and Anti-Capitalist”
Environmental economics is a branch of economics with the sole purpose of understanding and influencing the economic cause of human impressions to the non-human world, for instance, pollution (Sustainablepath.Org, n.p). Environmental economics pursues to use the primary perceptions and principles of economic thoughts to various natural resources. Hence ensuring that they are managed and used in the right way to avoid depletion as well as degradation.
Ecological economics is a transdisciplinary field that seeks to improve the economic theory in order to incorporate the natural system of the earth, human health as well as their values (“Sustainablepath.Org,” n.p). It undertakes a broader standpoint and distinguishes things that contribute to the well being of humans than just issues like family, human health, and education as well as friends.
Its vital goal is to develop a deeper understanding of the relationship between humans and the natural environment to formulate effective policies. The policies will ensure that the globe we are living in is economically stable and sustainable. Furthermore, they ensure that there is a fair distribution of resources.
Green economics is a branch of economics that aims at inventing a way that will ensure that there is a harmonious collaboration between human beings and the natural environment (Halton, n.p). This branch is closely related to ecological economics, and the only difference is that it is a holistic approach that includes the use of politics to advocate for sustainable resolutions.
Anti-capitalist economics clash with an economic and communal model whose ultimate principles are based on profits, private proprietorship over means of production, competition, egotism, and fiscal progress. They make up to fundamental ethics that govern the choices made by individual cultures.
Q#2. Environmental Policymaking
When it comes to environmental policymaking, a market-based approach is a very effective method. The main reason being markets will be used to force manufacturers to change their manufacturing processes to curb environmental pollution as well as the exploitation of natural resources (“Market-Based Climate Policy Instruments,” n.p).
Environmental policymaking is a crucial process that requires careful consideration. Policymakers must undertake intensive research in order to come up with policies that are practical and effective (Gomera, n.p). Pricing nature is a vital step. It ensures that the people who are making decisions evaluate the value of nature and grasp its importance to the economy as well as people who depend on the natural ecosystem (Gomera, n.p).
Similarly valuing people is also another move that ensures that the environment is protected because when it is destroyed, it means that people, as well as other organisms, are also affected; hence, by having their value, one is motivated to keep the environment to protect its value and people.
Q#3. Climate Change and “Market Failure,”
Climate change is a form of “market failure.” Market failure refers to a condition which contributes to inefficiencies in the division of goods and services in a free market. It always results in a net loss in social welfare. “Market failures” can also be regarded as situations where persons’ quest of pure egocentricity results to ineffective outcomes; which can be upgraded upon from the societal opinions (Bowen et al. n.p).
The greenhouse gas externalities are a core market failure since the greenhouse gas emissions have a dangerous side effect on the economic market. The impacts of greenhouse emissions are not felt by those producing them, but by the developing countries; hence, the producers do not incur any cost. This, therefore, means greenhouse gases are external to the market (Bowen et al. n.p). The market fails by producing these gases in large amounts due to the fact that there are no incentives for individual consumers and businesses to minimize their gas emissions.
Countries around the globe are working hard to improve their economy without considering the environmental impact. Government agencies, as well as environmentalists, must take drastic actions and make policies that will ensure that natural resources are utilized in the right way. At the same time, scheming legislation that reduces administrative loads on businesses. Thus, it inspires novelty and signals a coherent long-term regulatory framework that will minimize the cost of environmental regulation on the economy. Governments around the world should, therefore, make environmental policy a priority and increase funds for research on the green and clean economy.
“Market-Based Climate Policy Instruments | Climate Policy Info Hub.” Climatepolicyinfohub.Eu, https://climatepolicyinfohub.eu/market-based-climate-policy-instruments. Accessed 7 Dec 2019.
Bowen, Alex et al. “Why Do Economists Describe Climate Change As A Market Failure? – Grantham Research Institute on Climate Change and the Environment”. Grantham Research Institute on Climate Change and the Environment, http://www.lse.ac.uk/GranthamInstitute/faqs/why-do-economists-describe-climate-change-as-a-market-failure/. Accessed 7 Dec 2019.
Gomera, Maxwell. “Putting A Price On Nature (SSIR).” Ssir.Org, 2018, https://ssir.org/articles/entry/putting_a_price_on_nature. Accessed 7 Dec 2019.
Halton, Clay. “Green Economics Definition.” Investopedia, https://www.investopedia.com/terms/g/greeneconomics.asp. Accessed 7 Dec 2019.