ECO CASE STUDY: The Environment

Consequences

• Destroys the countryside
• Consumption of raw materials

Evidence

• Housing starts rose 1% from 14-15 to 15-16
• Completions increased by 12%
• 30% of total CO2 emissions are from housing

Consequences

• Creates congestion and pollution
• Resource depletion

Evidence

• Road transport accounts for 76% of CO2 emissions
• More than 100 million sick days and 400 000 premature deaths are caused per year in the EU
• EU health cost is 766 bn Euros per year
• Noise pollution causes hearing disease, heart disease, learing problems in children and sleep disturbance

Consequences

• Ugly
• Harms animals
• Potential to harm humans

Evidence

• 62% of people in England drop litter yet only 28% admit to it
• 99% of streets in town centres have cigarettes
• 30mn tons collected from the streets each year
• RSPCA recieves 7000 calls per year regarding animals injured by litter
• 46 000 pieces of litter in every square mile of the ocean
• 1/3 of fish caught for humans in the Channel contain plastic 

Consequences

• Uses energy
• Produces harmful gases
• Takes up space
• Infringement of animal rights

Evidence

• Nylon manufacture produces ntirous oxide, 310 times more potent than carbon dioxide
• Annual cost of clothing per UK home is 1000 tubs of water and 6000 miles of CO2 emissions

Consequences

• Threatening animal survival
• Carbon dioxide release

Evidence

• 300 football fields cleared every hour to make way for palm fields
• Orangutan populations decreased by 50% in the last 10 years
• 1500 clubbed to death by palm workers in 2006
• Clearing 1 hectare of forest releases 6000 tons of CO2

What is it?

• An economic problem in which every individual tries to reap the greatest benefit from a shared resource
• As the demand for the resource overwhelms the supply, every individual who consumes an additional unit directly harms others who can no longer enjoy the benefits
• Occurs when individuals neglect the well being of society for their own personal gain

Example - Grand Banks fisheries off the coast of Newfoundland

• Used to be lots of cod. However, advancements in fishing technology in the 1960s meant that fishermen could catch bigger quantities of fish than ever before
• Fishermen sarted to compete with eachother in pursuit of larger quantities of cod until the population was so low that the whole industry collapsed 

How it works

• Limiting carbon emisisons through granting firms permits to emit a certain amount of CO2
• Amount of permits is decided by the government and then permits are given to firms depending on various criteria
• A firm can then buy and sell these permits in an open market

Advantages

• Firms are free to chose the more cost effective way of reaching permit requirements - incentive to develop better technology and reduce emissions
• Governments gradually reduce the number of permits each year, leads to less CO2

Disadvantages

• Difficult to measure how much CO2 is actually being produced
• Transaction costs involved in buying and selling perrmits
• Free Rider Problem - if introduced in one country but not others, could cause production to move

How it works

• Taxes on negative externalities to make consumers/producers pay the full social cost of the good
• Reduces consumption and creates a more socially efficient outcome

Advantages

• Provides incentives to reduce negative externalities
• Taxes raise revenue for the government

Disadvantages

• Difficult to decide who is responsible
• Difficult to measure the level of negative externality
• Cost of administration
• Evasion - with a tax on rubbish disposal has come an increase in fly tipping 

How it works

• Financial aid given to firms to increase output, lower costs or invest in eco-friendly technology

Advantages

• A firm that develops eco-friendly technolgy may help society
• Reduces other costs, such as clean up costs

Disadvantages

• Expensive for the government
• Difficult for the government to know how much to subsidise
• Opportunity cost of taking funds from elsewhere

How it works

• The imposition of rules by the government, backed by the use of penalties that are intended specifically to modify the economic behaviour of individals and firms in the private sector

Advantages

• Encourages firms to invest in eco-friendly capital and processes and become more innovative
• Can be made more strict each other to force firms to improve

Disadvantages

• Can be costly
• Will the cost of regulation outweigh the cost of environmental damage
• Smal firms may suffer due to increased costs, lowering competition

How it works

• A charge made to drive into an area, especially those suffering from heavy traffic

Advantages

• Consumerrs are forced to use public transport
• Income raised could be invested in public transport
• Reduces congestion and therefore time and money wasted
• Reduces pollution and journey time
• When trialled it reduced congestion by 15% and journey time by 30%

Disdadvantages

• Takes up a higher % of low earners' incomes - unfair
• Encourage people to visit out of town shopping centres - decline in city centres
• Expensive to administer