lec10 the natural evironment

The natural surroundings of human life.

The livelihood of more than half of the population of the developing economies directly depends on the environment, via agriculture, grazing, and fishing.

City dwellers do not directly depend on the environment.

Why are people destroying their own environment?

Bad institutions - defective property rights, corruption, government failure.

Some economies do seek to be environmentally sustainable.

The federation of Saint Kitts and Nevis is a dual-island nation

situated between the Atlantic Ocean and Caribbean Sea.

Nevis and its sister island St Kitts gained their independence in 1983.

It has cloud-shrouded mountains and beaches.

The population is 55,000.

Tourism is a major industry.

Nevis is of particular historical significance to Americans because

it was the birthplace and early childhood home of Alexander Hamilton.

During the 17th and 18th centuries,

massive deforestation was undertaken by the planters

as the land was cleared for sugar cultivation.

The sugar industry was recently abandoned,

and vegetation regrew reasonably well.

The government of Nevis seeks to become first truly green state.

The country now has a Ministry of Sustainable Development.

The island of Nevis (population 12,000) needs a lot of electricity for its hotels.

plus the ordinary energy demands of schools, hospitals, cars and homes.

More than two-thirds of Nevis’s economy is based on tourism

and the island is getting about 500 barrels of oil every 24 hours.

Nevis’s electrical needs are powered by eight large diesel generators.

At times electricity has become so expensive

that it’s taken up more than half of average household budgets,

pricier than either rent or food.

The island sits directly over the same volcano range as the nearby island of Montserrat,

where in 1995 its previously dormant volcano erupted


On Nevis there are spots where water and sulphur bubble to the surface.

Recently the Nevisian government figured out that it was sitting on a geothermal goldmine. Underneath its feet there was enough energy to power not just Nevis

but also several larger neighbouring islands.

If things go to plan, then Nevis will become the world’s first carbon-neutral island,

100 per cent self-sufficient and entirely powered by its own resources.

If its plans for geothermal power work,

it could halve its household electricity bills,

reduce its dependence on conventional tourism

and leapfrog right over the eco-friendly Scandinavian countries

that now dominate the annual global Environmental Performance Index.

Nevis may soon become one of the greenest destinations on Earth.

The Nevis government is promising that the island will have gone

100 per cent green by December 2017.

At the United Nations Sustainable Development Summit on 25 September 2015, more than 150 world leaders adopted the new 2030 Agenda for Sustainable Development, including the Sustainable Development Goals (SDGs). The United Nations Development Programme (UNDP) will support governments around the world in tackling the new agenda and taking it forward over the next 15 years.

The 17 new Sustainable Development Goals, also known as the Global Goals,

aim to end poverty, hunger and inequality, take action on climate change and the environment, and improve access to health and education.

The key to environmental sustainability is to have everyone

pay the full social cost of their consumption.

We can achieve economic and environmental sustainability with market prices,

which requires that there be no subsidies on any resources and products.

Environmental degredation can be self-perpetuating.

Environmental damage reduces long-term productivity, but

in the short term, generate a higher GNI.

The destruction of the world’s remaining large forest areas

is occurriog in central Africa, Indonesia, and the Amazon in South America.

The destruction of forests accelerates global warming.

To whom do natural resources properly belong?

Either homesteading or equal benefits.

In practice: conquest.

Ethically, natural resources are the common heritage of humanity.

Environmental accounting: including the loss of natural resources in national income.

Assets include capital goods, human capital, and land: environmental capital.

GNI = GDP + net factor incomes.

Net national income NNI is sustainable national income.

Dm: depreciation of capital goods.

Dn: depletion of environmental resources.

R: cost of restoring environmental resources such as fish.

A: spending to prevent environmental destruction.

NNI = GNI - Dm - Dn - R - A