8.5 Government Resource Distribution & Environmental Protection

1. 8.5Government Resource Distribution & Environmental Protection How do governments develop policies based on their resources' distribution? How are these decisions reflected upon the environment and the population?

2. Vocabulary • Monopoly: a situation in which one company controls an industry or is the only provider of a product or service • Oligopoly: an economic condition in which there are so few suppliers of a product that one supplier's actions can have a significant impact on prices and on its competitors • Antitrust: intended to oppose trusts and cartels, e.g. by preventing them from using monopolistic business practices to make unfair profits

3. Government Resource Distribution • Markets cannot effectively respond to some key societal questions, such as how to protect our precious environment for future generations, or how much of our resources should be devoted to educating the young, or how to correct the extreme imbalances and the unfair sharing of national wealth that exists between the rich and the poor, or how to reduce unemployment in a deep recession. Government Involvement with Markets

4. Government Involvement with Markets • Due to what is known as market failures, which are the characteristics of the free market system, sometimes the market on its own fails to allocate resources efficiently. • Under these circumstances, intervention by a government into the economy becomes both a desirable and an inevitable outcome. • Consider three situations of market failures: externality, market power and unequal distribution of income. A government in a market economy can promote efficiency and equity eliminating problems unresolved or caused by market failure.

5. Government Involvement with Markets • An externality is an activity that affects others for better or worse, without those others paying or being compensated for the activity. It exists when private costs or benefits do not equal social costs or benefits. • The unregulated market may produce too much air pollution and too little investment in public health or knowledge. Government may use its influence to control harmful externalities. For example, if a chemical factory does not bear the entire cost of smoke it emits, the government can raise economic well-being through environmental regulation. Or it can subsidize activities that are socially beneficial such as education or prenatal care.

6. Government Involvement with Markets • The second example of market failure, a market power, reflects the degree of control that a firm or group of firms has over the price and production decisions in an industry. • When monopolies or oligopolies, for example, collude to reduce rivalry or drive firms out business, government may apply antitrust policies or regulations to enhance economic efficiency.

7. Government Involvement with Markets • The last example refers to the manner in which the total wealth of a nation and income is unfairly and unequally distributed among individuals. • Even when a market works to maintain efficiency, it does not ensure that everyone has sufficient food, decent clothing, and adequate health care. People end up being rich or poor depending on their inherited wealth, or on their talents and efforts, and on their gender or the color of their skin. • The government can achieve a more equitable distribution of economic well-being through public policies, such as the income tax and the welfare system.

8. Government Environmental Protection US EPA • United States Environmental Protection Agency (EPA or USEPA) is an agency created to protect human health and the environment by writing and enforcing regulations based on laws passed by Congress. • The EPA, created by President Richard Nixon, began operation on December 2, 1970. The agency is led by its Administrator, who is appointed by the president and approved by Congress. • The current administrator is Gina McCarthy. The EPA is not a Cabinet department, but the administrator is normally given cabinet rank.

9. US EPA • The agency conducts environmental assessment, research, and education. • It has the responsibility of maintaining and enforcing national standards under a variety of environmental laws, in consultation with state, tribal, and local governments. • It delegates some permitting, monitoring, and enforcement responsibility to U.S. states and Native American tribes. • EPA enforcement powers include fines, sanctions, and other measures. The agency also works with industries and all levels of government in a wide variety of voluntary pollution prevention programs and energy conservation efforts.

10. US EPA • The agency has approximately 17,000 full-time employees, and engages many more people on a contractual basis. • More than half of EPA human resources are engineers, scientists, and environmental protection specialists; other groups include legal, public affairs, financial, and information technologists.

11. US EPA

12. US EPA: ROADS DIP FW (forward)

13. US EPA Environmental Justice

14. Environmental Justice • The EPA has been criticized for its lack of progress towards environmental justice. • Administrator Christine Todd Whitman was criticized for her changes to President Bill Clinton's Executive Order 12898 during 2001, removing the requirements for government agencies to take the poor and minority populations into special consideration when making changes to environmental legislation, and therefore defeating the spirit of the Executive Order. • In a March 2004 report, the inspector general of the agency concluded that the EPA "has not developed a clear vision or a comprehensive strategic plan, and has not established values, goals, expectations, and performance measurements" for environmental justice in its daily operations. • Another report in September 2006 found the agency still had failed to review the success of its programs, policies and activities towards environmental justice. Studies have also found that poor and minority populations were underserved by the EPA's Superfund program, and that this situation was worsening.

15. Homework Reflect on government involvement in the market economy &/or environmental justice, then compose a short *argument on a position of your choice, including supporting evidence. Parameters: 1 paragraph; 1 introduction sentence, 2-4 supporting sentences, and 1 conclusion sentence. *Argument: a reason or set of reasons given with the aim of persuading others that an action or idea is right or wrong.