The Economy and Environment - How Bad is Pollution?

To pollute or not to pollute... This is the question. Since the industrial periods, we have been altogether stuck with the same problem- climate change and respiratory health problems among others.
Is pollution really bad? The answer is yes and no. In order to produce, we all need to pollute. Factories that process the food that we eat, clothes that we wear, cars that we drive, needs to pollute. Everything that we consume, from the shampoos and soaps, to the socks and shoes, all of these could not be made without polluting. Hence, if we will say that pollution is bad and we do not want ANY pollution it's synonymous to signing our death warrant or better or worse, going back to how the neanderthals lived before.

So, since we need to produce in order to survive, then we need to pollute.

The environment has the ability to assimilate or absorb all of our wastes or the pollution. Hence, we could say that pollution is not always bad. But the assimilation capacity of the environment has its limit. It has a specific rate or speed at which it could only absorb specific amounts of pollution for a certain period of time. In other words, if pollution rate is so fast or higher than what the environment could only absorb, then that's the time that pollution is bad.

This is the reason why the government uses policy regulations such as tax emissions, flat rate carbon tax, ban on production of energy extensive vehicles, incentives for alternative energy research and a lot more. If pollution rate became so high, then health of people is at risk. In effect, the productivity level of the sick people is low and the economy suffers.

The economy suffers not just because of the lost productivity of the people, but also because the government must pay for the damages it has done to its people. Public hospitals would abound with patients with respiratory diseases.

Among a long list of policy instruments the lawmakers could use, taxation has always been their favorite. So what does taxation do? How efficient or effective is it in the goal for abatement of our pollution rate?
Imposing a tax on firms that pollutes can be considered a good strategy, as long as the tax would cover all the external cost or the cost of the damage the firm created during production. Taxation, if enforced really well, could make firms create a technology that may lessen pollution, if they will find out that it will be cheaper than continuously paying the tax. In this way, pollution is reduced without compensating the quantity of the firm's production. The downside of this policy however, lies on the possibility that some big firms would find the tax cheap (because it did not cover the true costs of damage), hence, they will just produce more and pollute more. They will produce more, if the case will be, other small firms may find the tax expensive, thus closing down, so that they're production quantity will be eaten up by those firms who could afford the tax. If this happens, another set of problems arises. The worst scenario would be oligopoly or monopoly could happen, thus raising prices, to the demise of the consumers. On the other hand, if the tax is so high, small firms could close down, or firms could just pass the tax to its consumers, hence raising prices.
Hence, it is crucial that lawmakers in each country, when decides to impose tax on pollution emissions, must first review and analyze very carefully the true cost of the damage. It must not be too high so as to protect the consumers from price hikes, or not too low so as not to have any effect on pollution rate of firms.
If taxation strategy is not perfect, what then is the most efficient or effective way to ebb the rate we are polluting today?

Cherry Lyn Beldia, born in August 15, 1986 in Roxas City, Capiz, Philippines. She is a graduate of Public Administration with a minor in economics in the university of the Philippines Diliman.

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Capitalism and Environment

The economic process involves and affects a large number of aspects. While classical economics is concerned mostly with the entrepreneur, other economists have emphasized other economic players (Karl Marx the worker, Thorstein Veblein the technocrat, John Stuart Mill and John Maynard Keynes the government). But there has not been nearly enough discussion of a very important, although passive, element in the economic process; and this oversight in economic theory has cost dearly to economic vibrancy and to the health of the world.

That element is nature.

In libertarian capitalism, property is described as nature converted into productive use. But no value is seen for nature. With a major input into the economic process, that is greatly affected by the economic process, and whose health has great effects on people's health, quality of life, and economic vibrancy, not being valued or quantified, the pricing system of capitalism fails to quantify a vast range of its effects. And this has resulted in the worst aspects of capitalism: The failure to disincentivize blind and destructive practices such as the burning of Amazon rainforest to make ranches that last for two years at the conclusion of which the land is desertified; and the failure to incentivize intelligent, ingenious, innovative practices that maximize utility to the consumer while minimizing destruction, pollution and waste.

While many people concerned for the well-being of the environment see capitalism itself as poison, I am not of the same opinion.Capitalism works correctly when both the inputs and outputs are rightfully priced. when economic activity fails to quantify what it destroys, pollutes and poisons - when for that reason it finds it profitable to destroy priceless treasures that man has not created and cannot conceivably recreate in order to realize minimal utility - the economic activity becomes destructive to a far greater extent than it becomes productive. And it is by quantifying these treasures for all that they have to offer people, as well as for what they intrinsically are, that can be disincentivized the myopia and destructiveness of an incompletely constituted capitalism while can be incentivized the ingenious and intelligent practices that actually create wealth.

When the Chinese government sought to quantify the health effects of economic activity throughout the nation, it had to suppress the survey, as it showed the health effects effectively bringing the economic growth in many regions to zero. The severity of health and environmental effects in places such as Linfen negates much of the growth achieved. Meanwhile there are plenty of effective and affordable smokestack and effluent filters on the market, and all it takes is quantifying the health and environmental effects and including them in the pricing to make it vastly profitable for the Chinese manufacturers to implement these filters and vastly reduce the damage of their economic activity to the health of the population.

The same is the case with economic system itself. Rainforest deforestation, ocean acidification, and global warming have only got as big as they did because nature has not been computed in economic process. And it is only by computing nature in economic process that capitalism stands to function as advertised, with incentivization for its benefits and disincentivization of its worst aspects.

Ilya Shambat
http://sites.google.com/site/ilyashambatwritings

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You and the Environment

It is amazing how different we human beings can be, and yet how similar we really are. Across time and location, we establish different customs, cultures, standards, lifestyles. We formulate various theories, philosophies and religions. We agree and disagree about forms of government and nature of businesses. Yet some things remain the same. We are all people trying to "get by in our environment".

Our environment in this context may be human or natural, and to a large extent a combination of both. To "get by" we continuously learn, study and adjust to human behavior as well as to natural phenomena. While standards for success and failure in these endeavors may vary, one fact becomes obvious: we all depend on our environment for sustenance and subsistence; thus we must protect and preserve it.

In general terms, we can summarize our environment as a network of the relationship with fellow men on the one hand, and the relationship with nature on the other hand. Man-to-man, we have principles, rules, guidelines, laws, bye-laws, legislation, constitutions etc stemming from the realization that there are consequences for our actions, hence the need to regulate it. However man-to-nature... the story is not quite the same.

In our world today, success to a large extent means wealth. Along these lines, wealth means resources; resources means goods or services; these in one way or the other translate to harnessing the earth's potentials. We have been about this for quite a while with ever increasing penchant for "acquiring MORE". We talk of mass production, increased productivity and profitability, expanding markets, globalization, cutting edge technology...but what are the consequences of some of these activities on the natural environment?
They are obvious (whether or not we all agree on the extent)! Where we refuse to see, the environmentalists can inundate us with information. Some say "oh please it's all exaggerated", others call for global summits, some have dedicated their lives to the "green" cause, others say "what's it to me". The reality is that just as with human relationships, even with nature, there are consequences for our actions. So, what are the rules, what are the guidelines, what are the laws?

The sciences and general observation help us to understand the flow of nature, such as the perpetual formation, growth, maturity, decay and decomposition leading back to fresh formation. The plants and animals, the air and the water bodies, even the rocks and land mass have their own patterns operating independently yet simultaneously. They result in an exotic array of beauty, wonder, and life sustaining resources from which man takes his pick.

From this standpoint, all living things are (at least should be) symbiotic neighbors. Just as nature provides for man, so should human activity enhance and promote nature's patterns. Apparently, we have not fully incorporated and integrated these into every facet of our developmental activities, therefore our activities result in the toxic pollution of the air, land, and water bodies. Furthermore, there is exploitation, depletion and outright destruction of the earth's valuable resources etc

Contrary to what skeptics think, this is in no way a call to halt human development, since development is an intrinsic necessity for all human beings on the physical, mental, emotional, and even spiritual levels. Rather, it is a call to re-examine and develop better ways of achieving our objectives such that we further ourselves while preserving the natural environment in accordance with its own rules. We cannot continue to impose blindly even to our own detriment.

Already, many individuals and groups are working in this direction with admirable and sometimes astonishing results. Depending on the economic implication and political will, Environmental Treaties and Agreements are upheld, circumvented or out rightly violated. In this sense, this call appears to be a moral challenge in which every human being is involved and responsible both collectively and individually. The question therefore goes out to everyone "how concerned are you?" "How objective can you be?" "What efforts and changes are you willing to make at your own level?" "Do you require coercion, or do you choose freely to adjust your activity simply for the sake of preserving the natural balance?"

The drama of human development is enacted on the stage of our environment which is simultaneously impacted: positively or negatively. We cannot ignore all the current negative signals. We can all take little steps that make the bigger ones easier. We must protect and preserve our environment.

Ivie E. George

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