Blogging (class participation) opportunities:
(1) Develop short summary sentences for main points of the class.
We covered many resource issues (pollution, land use, mineral extraction, deforestation, over-fishing), but there were some common themes throughout.
(2) What are common themes regarding the economic perspective on natural resource problems?
(3) What are common themes regarding the economic perspective on solutions to those problems?
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One of the common themes throughout the class was the inefficiency of markets due to negative externalities. This was present in pollution, land-use, extraction, deforestation, and over-fishing. All of these things come with negative impacts to third parties who are not users. These externalities are not included in the price of the product, so therefore these markets are inefficient. The common solution to all these would be a Pigouvian Tax equal to the marginal costs.
Open access markets lack property rights and will ultimately result in the "Tragedy of the Commons". The negative externalities of natural resource extraction, consumption and depletion are shared by society. The individual efforts to maximize private net gains, result in everyone suffering. It is only June and we can barely enjoy the outdoors.
Unfortunately people continue to demonstrate a lack of concern (willingness to accept cost)or an unwillingness to pay for shared benefits. We have a cultural illness ingrained in our thinking. In order for policy changes that support the conservation of natural resources to come into effect, we need to change what we value.
The hope is that we have the solutions. We need to change our thinking and demonstrate a willingness to give up certain freedoms for the benefit of our global society and future generations.
Additional thoughts..
Maybe we need a command control regulation to get outside and grow our own gardens? We want broccoli? Grow it.
Maybe we need to implement gasoline purchasing caps.
In the seventies many people had to change their behavior because of long gas lines. People chose to walk and bike more, car pool and ride public transportation.
Maybe we could have grants for community gardens and electric car tax incentives.
The consequences of our actions do not represent the true cost. We are not held responsible for the true cost of resources and are not able to limit our selves due to undefined property rights and our inabliity to limit our use of public goods
When ownership of resource is not established then we are faced with the problem of open-access resources. The theme we have circled around in this course is that with policies we can sometimes effectively convert open access property into private! By doing this the tragedy of the commons problem could be resolved by internalizing externalities. Private owners would rely on incentives to conserve resources for the future and therefore would be more inclined to preserve and maximize resource use.
Certainly the difference between economically efficient supply curves and socially efficient supply curves was a common thread. There seems to be an endless array of measurements for determining the negative externalities and of methods of incorporating them. The importance of incentive-based versus command-control regulation to maximize efficiency has also been an important point that we have used throughout.
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