Environmental Economics Proposal Draft 3

This topic submitted by Alec Risch, Alicia Loughry, Adam Naylor ( alfdrama22@aol.com ) on 3/21/02 .

Caribou pass by the National Oceanic and Atmospheric Administration's Climate Monitoring and Diagnostic Lab in Barrow, Alaska, Friday, Feb. 8, 2002. Scientists have unveiled a $35 million plan to study Arctic warming and its potential global impact over the next five years, focusing on recent climate changes that have affected the land, sea and air in the far north. According to NOAA, warmer winter temperatures are causing the ice in Barrow _ North America's northernmost city _ to melt two weeks earlier in the spring. (AP Photo/National Oceanic and Atmospheric Administration, Daniel Endres)

What is environmental health worth to you? What is environmental health worth to America? What is environmental health worth to the human population of planet Earth? There are many people who would say a healthy planet is priceless. For each one who answers like that, there will no doubt be another who would say the environment has a finite value. Since the 1980's the United States has been considering the economic impacts of environmental regulation.

This undated handout combination photo shows two images that represent new research based on NASA satellite data and a multi-national field experiment that shows black carbon pollution produced by humans can impact global climate. The image at left, taken from space, shows the absorption of the black carbon aerosols in the atmosphere. Red pixels indicate the highest levels of absorption, blues are low. The image on the right shows that the aerosol particles reduce the amount of sunlight reaching the Earth's surface. Dark pixels show where the particles exert their cooling influence on the surface most. (AP Photo/NASA/GSFC Science Visualization Studio, Tom Bridgman)


The role of economics in the formulation of environmental policy is a critical and controversial issue. Whether we should use economics to interpret the impacts of environmental policy decisions and how we use those interpretations has a profound influence in the decisions that we make and the information that we use. The issue asks how we view the environment on a fundamental level; do we view nature as something sacred and to be protected at any cost, or do we see nature as something that can be given a monetary value.

We will be conducting research into the roles that economics has played in previous discussions of ecological issues and the role that it plays in the current debate over global warming. We will be looking at policy making primarily on the national level, but expect that it will be impossible to exclude international politics altogether. We expect to find that the primary controversy will not be one of whether economics should be used, but in what capacity. Also we expect to find that cost estimates from the business community will be significantly higher than those from environmental groups. We also expect to find that the true costs of preventing radical global climate change will be somewhere between these two estimates.

Dutch Environment Minister Jan Pronk is presented with a lifebuoy by environmental activist urging delegations from over 100 nations to rescue a global climate agreement which was renounced by the United States, during a demonstration in the beach resort of Scheveningen, near The Hague. Wednesday June 27, 2001. (AP Photo/Peter Dejong)

Relevance of the Research Question:

This project ties into our class seamlessly, as the economics of global climate change will play a role in the formation of policy and ultimately will have an impact in the way that human beings view and interact with the environment. When we discuss global warming there are three questions which are impossible to avoid: Is it happening? How fast is it happening? And what should we do about it? The economic impacts both of global warming and of environmental regulation meant to curtail global warming are factors which are of dire consequence.

In our preliminary research we discovered that economics played no role in early environmental policy making. Neither the Clean Air Act, nor the Clean Water Act of the late sixties accounted for the economic impacts of the imposed regulations.(Portney) It was not until the 1980's that policy makers asked for inputs from economists. Influence has grown immensely since.

At this point, corporations involved in lobbying for or against environmental regulations often cite economic reports in order to influence politicians' decisions. Even the federal government asks for input from economic experts when considering policy changes. The National Center for Environmental Economics conducts research and economic analyses of environmental regulations, but E.P.A policy is made independently of the reports. The U.S. E.P.A. has been asked, recently, by the Bush administration to work in conjunction with the Department of Energy.

Materials and Methods:

We plan to do extensive research into two areas: the cost of preventing global warming, and the extent to which economics should be used to determine environmental policy. Our research will be primarily comprised of the previous research of others. We will compare and contrast the estimates and opinions of experts in economics and environmental politics. Particular attention will be paid to the differences in opinion and the reasons behind such differences. We want to know why some estimate that any attempt to prevent global warming would throw our economy into a recession while others think that such efforts would not only stimulate the economy, but bring about a virtual golden age in American science and industry.

Though we think it will be possible to make some general statements about the opinions and estimates from different groups (environmental lobbyists, economists, industrialists), we expect to find that within each of these groups there will be a spectrum of opinions and ideologies. In an effort to provide an accurate portrait of current opinion we will be looking at multiple reviews of American climate policy from each group. Additionally, we will be looking at local opinion, to provide a sort of litmus test for the research we come across regarding public opinion.

To look at local opinion, we will be conducting a survey of Miami University students and faculty, as well as surrounding Oxford residents. Though the survey will be limited in size and scope, we hope that it will provide a fuller understanding of public opinion. Some questions that we will be asking are as follows:

*Do you believe that global warming is happening?
*Should economics be used in the formation of environmental policy?
*If so, should we asses the monetary costs and benefits of policy regarding global warming?
*Do you believe that global warming should be prevented if such action might result in a recession of the American economy?

Annotated Bibliography:


This website is a news site that focuses on global climate change, specifically American climate policy. It was created by the U.S. Global Climate Change Research Program in 1989 by a presidential initiative. It sponsors research and provides a solid basis for understanding the ideology and biases of federally funded climate change research.

The official website of the Global Climate Coalition, a coalition whose membership consists of some 800 businesses. This website is the counterpoint to much of the information provided by environmental lobby groups. In essence, this site represents the interests and interpretations of big business.

This is the website of the Sport Utility Vehicle Owners of America. It is an interesting site because it is per se the opinions of a segment of consumer America. Neither big business, nor environmental lobbyists, this site provides a third view of climate change: the desire of many Americans to continue the relative luxury and extravagance of a gasoline powered economy. However, in many ways, this site presents the de facto opinions of the automotive industry, as it is a useful propaganda tool, allowing the automotive industry to duck responsibility by claiming that they serve public demand.

This is the National center for environmental economics. This is the agency responsible for doing the economic reports for the E.P.A. The reports are thorough, detailed and provide a better understanding of the kind of information on which the E.P.A. makes it's policy recommendations.

This is the E.P.A.'s homepage. It provides a coherent overview of the policy advocated by the Environmental Protection Agency. In tandem with the previous site, this is an incredibly useful page. The E.P.A. is currently involved in a political battle with the Department of Energy and the Bush Administration over which group will have central influence in environmental policy.

This is the website for the Department of Energy, a governmental agency responsible for fostering industry and specifically domestic energy production. Currently the Bush Administration has instructed the E.P.A. to work with the Department of Energy in establishing environmental policy recommendations.


Chemical Week. "CMA Reverses Policy on Early Crediting." March 21, 2001. Franz.
Discusses Clinton's policy of rewarding businesses that voluntarily reduce carbon dioxide emissions. The CMA is a lobby group which opposes the Kyoto Protocol. It provides further information about their reversal in policy in choosing to support Clinton's policy of voluntary environmental action.

Chemical Week. "Bush Reverses Policy on Carbon Dioxide Emissions." March 15, 2000. Franz.
This article discusses the role of a domestic energy crisis in the formation of Bush's climate policy. It talks about the worries of business that a cap on CO2 might lead to other more financially burdening caps on other emissions. It also talks about the dissension of the democrats in Congress to Bush's climate policy.

Demography. "Demography and the Environment(in Presidential Address)." November 1998. Pebley.
This article talks about the importance of demographic studies in the formation and study of environmental issues. It also talks about the implications of global climate change on shifting global demographics. It talks about the third wave of environmental action, which expanded the possibility of environmental problems to have global impacts. This article is primarily concerned with the equity in terms of resource use and the effects on populations and how this equality relates to responsibility for action in preventing global warming.

Environment. "The Role of Science in Policy: The Climate Change Debate". June 1999. Skolnikoff.
This article talks about the diminishing role of science in the formation of environmental policy, in favor of economic and political forces. This is an overview of how domestic climate policy is formed.

Environment. Counting Cost: The Growing Role of Economics in Environmental Decision Making." March 1998. Portney.
This article defends the necessity for economic evaluation of environmental policy. It discusses the pros and cons of using economics, providing a brief history of economics and environmental legislation. Ultimately he concludes that economics not only should be used in evaluating environmental policy, but that we have a moral obligation to do so.

Journal of Economic Literature. Environmental Economics: A Survey." June 1992. Cropper, Oates.
This article discusses the impact and importance in the process of placing monetary values on environmental resources and other typically non-monetarily valued ecological commodities. It also deals with the way that economics was primarily ignored in the first wave of environmental legislation from the 1960's and how economics have been progressively (and correctly in the opinion of the author) more influential in policy making.

Science. "Realistic Mitigation Options for Global Warming(in Policy Forum)." June 10, 1992. Cooper, Lee, Marland, Rosenfeld, Rubin, Stine.
They begin by saying that preliminary cost analysis of mitigation options suggests that there are a variety of energy efficiency measures now available that could reduce emissions of greenhouse gasses by ten to forty percent at low cost. This article also discusses the conflict between the stances of Europe and the U.S. government on issues of global climate change. The U.S. avoids making what they consider rash decisions based on what they feel are preliminary and inconclusive studies on global warming.

The American Economic Review. "Some Economics of Global Warming." March 1992. Thomas Schelling.
This is a single economic interpretation of the impacts of global climate policy. He focuses on underdeveloped countries and the role that they can play in mitigation of the greenhouse effect. Moreover, this article demonstrates the multitude of factors that must be taken into account in order to form an accurate assessment of the costs and benefits of global climate policy.

Environment. "Climate Change and a Global City." April, 2001. Cynthia Rosenzweig.
This article uses New York City as the basis for a case study in the impacts of climate variability and change. The premises is that organisms naturally adapt to changes in climate and environment, and that the world will function as a global city, doing much the same a larger level. The author argues that global climate change is itself forcing a re-evaluation of urban environmental management.


Hurrell, Andrew and Benedict Kingsbury, eds. The International Politics of the Environment: Actors, interests and institutions. New York : Oxford University Press, 1992.
In the introduction to this collection of essays, Andrew Hurrell and Benedict Kingsbury ask: "Can a fragmented and often highly conflicting political system made up of over 170 sovereign states and numerous other factors achieve the high (and historically unprecedented) levels of co-operation and policy co-ordination needed to manage environmental problems on a global scale?" This book addresses that question as the politics the environment from a mainly global perspective.

Vig, Norman J and Regina Axelrod, eds. The Global Environment: institutions, law, and policy. Washington, D.C. : CQ Press, 1999.
This book has case studies of sustainable development in the Netherlands, Czech Republic, China and Indonesia which are cases that involve the intertwining of financial and environmental concerns.

Kamieniecki, Sheldon, ed. Environmental Politics in the International Arena: Movements, parties, organizations, and policy. Albany, N.Y. : State University of New York Press, 1993.
Among other things, this book contains an analysis of a random sampling of people from UK, Germany, and USA and the "Dominant Social Paradigm" and the "New Environmental Paradigm." The "most fundamental differences center upon the role of economic activity" (25).

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