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ECONOMIC SUSTAINABILITY. Presenters: Irene Riaz John Semper Luis Orozco-Mendez Yamila Hernandez Submitted to Prof. Berin Tansel June 5 th , 2007. Environmental Entrepreneurialship. Outline. Terms & Definitions “Green” Accounting Cost Benefit
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ECONOMIC SUSTAINABILITY Presenters: Irene Riaz John Semper Luis Orozco-Mendez Yamila Hernandez Submitted to Prof. Berin Tansel June 5th, 2007 Environmental Entrepreneurialship
Outline • Terms & Definitions • “Green” Accounting • Cost Benefit • Developed/Undeveloped Nations • Pros & Cons • Q&A
Terms & Definitions • Sustainability – Meeting the needs of the present without compromising the ability for future generations to meet their own. (World Commission on Environmental and Development, 1987) • Environmental • Social • Economic
Terms & Definitions • Renewable source -Is energy derived from resources that are regenerative or for all practical purposes cannot be depleted. (wikipedia, 06/01/2007)
“Green” Accounting • Properly Referred to as: • Natural Resource Accounting • Environmental Accounting • GNP – Gross Domestic Product • Measures income not assets • PNDP – Proper Net Domestic Product • Measure of economic and environmental assets
“Green” Accounting (cont’d) • “Green” GNP Z/A = N/A x Y/N x E/Y x Z/E where: A = Geographical Area E = Resources N = Population Y = Income Z = Pollutants
“Green” Accounting (cont’d) • Factors Considered: • Per capita income • Population density • Demand for Resources • Efficiency of resource use • Environmental strain and impact
“Green” Accounting (cont’d) • Striking a Balance to Achieve a Maximum Level of Wealth • Monitary assets (income) • Debts • Resources available • Resources lost • Cost to maintain or restore resources • Can being “green” be profitable?
Economics and Sustainability: Cost Benefit “It took Britain half the resources of the planet to achieve its prosperity; how many planets will a country like India require....?” Mahatma Gandhi [when asked if, after independence, India would attain British standards of living]
Economics and Sustainability:Benefits • Economic sustainability • generating maximum flow of economic welfare. • Social sustainability • people oriented • Environmental sustainability • refers to the preservation, the resilience and the adaptation of physical and biological systems. (Cedric Pugh, Sustainability, the Environment and Urbanization, 1996)
Economics and Sustainability:Cons – “Externalities” Externalities exist whenever the production or consumption inflicts involuntary costs or benefits on other; i.e., costs or benefits are imposed on others but are not paid for by those who impose them or receive.
Developed/Undeveloped Nations • Over 1 billion people world-wide depend, to varying degrees, on forest-based assets for their livelihoods. • 15 of 24 essential services provided by ecosystems (ranging from food production, water quality and availability to disease management and climate regulation) are currently being eroded. • In developing countries, 20 per cent of the total loss of life expectancy is attributable to environmental causes. In OECD countries, it is around 4 percent. • Unsafe water, due to poor access to water supply, sanitation facilities and hygiene, is responsible for 3.1 % of all deaths worldwide. Over 99 % of this burden occurs in developing countries.
Developed/Undeveloped Nations • In the world’s cities, outdoor air pollution results in approximately 800.000 deaths annually, due to cardiopulmonary disease, lung cancer and acute respiratory infections. This is the equivalent of 6.4 million years of life lost to premature mortality. • Indoor air pollution, caused by smoke from stoves and fires, causes around 1.6 million death s per year in developing countries. • Environment-based wealth accounts for 25% of the total wealth in low-income countries, 13% in middle-income countries, and only 3% in OECD countries.
Developed/Undeveloped Nations Per Capita Eco-footprints of Selected Countries (Data from Wackernagel, et al . 1999)
Developed/Undeveloped Nations United Nations Commission on Sustainable Development (CSD) indicators • Poverty • Natural hazards • Economic development • Governance • Atmosphere • Global economic partnership • Health • Land • Consumption and production patterns • Education • Oceans, seas and coasts • Demographics • Freshwater • Biodiversity
Technological Limits • Scientific American (1989), “manage planet earth” • Limits on harvesting renewable resources • Bottom line; “what may be managed, however, is us: human desires, economies, politics, and communities.”
Throwaway Economy • Society's obsession with economic growth • Reengineer product design • Closing the materials loop: Converting linear flow-through (throwaway) economy into a recycling economy.
Getting the Price Right • Must challenge the market to tell the ecological truth • The current global economy is shaped by distorted market prices that do not incorporate environmental costs • China’s Yangtze River valley • The true cost of gasoline
In conclusion… “It makes far better sense to reshape ourselves to fit a finite planet than to attempt to reshape the planet to fit our infinite wants.” (David W. Orr, 2004)
