Handbook of Environmental Economics

Environmental Degradation and Institutional Responses

Karl-Goran Maler, Jeffrey R. Vincent

• Publisher: North Holland
• Year: 2003
• ISBN:
  9780080495095
• Topic: Business
• Subtopic: Agribusiness
• Index: Business

The Handbook of Environmental Economics focuses on the economics of environmental externalities and environmental public goods. Volume I examines environmental degradation and policy responses from a microeconomic, institutional standpoint. Its perspective is dynamic, including a consideration of the dynamics of natural systems, and global, with attention paid to issues in both rich and poor nations. In addition to chapters on well-established topics such as the theory and practice of pollution regulation, it includes chapters on new areas of environmental economics research related to common property management regimes; population and poverty; mechanism design; political economy of regulation; experimental evaluations of policy instruments; and technological change.

Chapter 1

Geophysical and Geochemical Aspects of Environmental Degradation

Bert Bolin S. Asvagen 51, 18452 Österskär, Sweden

Abstract

The environmental system is characterized by an interplay of geophysical and geochemical processes that provide a setting for life. Now that human interventions are affecting the global system as a whole, it is important to distinguish between changes of natural origin and changes brought about by human activities. Major difficulties arise in doing this because of the nonlinear and chaotic nature of the interactions between the environmental and human systems. Following an initial review of basic earth science principles, this chapter focuses on five fundamental issues that are important in all quarters of the world. Two sections deal with purely atmospheric issues, air pollution near the earth’s surface and depletion of ozone in the stratosphere. These sections are followed by a closer look at water pollution and water management. A specific issue, acidification of freshwaters and soils, is next dealt with in more detail. The final issue addressed in the chapter, global climate change, requires an analysis of the total environmental system. All of these environmental issues have a bearing on how humankind might be able to secure sustainable development for the future, which is touched upon in the concluding section.

Keywords

air pollution

ozone layer

water management

acidification

global climate change

JEL classification

Q15

Q23

Q24

Q25

Q4

1 Introduction

Life on Earth has developed during many hundred millions of years. This has been possible because of the favorable location of the Earth in the solar system. The planets closer to the Sun (Mercury and Venus) are much too hot to permit the existence of the kind of complex molecules that life is built around. The planets further away from the Sun, on the other hand, are cold and uninhabitable.

A so-called black body,¹ at the same distance from the Sun as the Earth and in thermodynamic balance with the radiation from the Sun, would have a temperature merely a few degrees above the freezing point. The Earth is, however, not a black body but reflects about 30% of the incoming radiation back to space – its albedo is 0.30 – while the heat radiation emitted by the Earth towards space still is about that of a black body. Therefore, if there were no atmosphere around the Earth its temperature would be merely about – 18 °C, a very harsh setting for life to thrive in. In reality the global mean surface temperature of the Earth is about + 15 °C. This is the result of the presence of an atmosphere that contains water vapor and some other so-called greenhouse gases, which in addition to creating a friendly climate provide for the possibility for a number of other requirements for life to develop.

Human activities are, however, now gradually changing the composition of the atmosphere. The concentrations of the greenhouse gases are increasing because of human emissions. The radiative balance of the Earth is being disturbed. The global average surface temperature has increased by about 0.6 °C during the 20th century and as expressed by the IPCC (2001a) “… a significant anthropogenic contribution is required to account for surface and tropospheric trends (of temperature) over at least the last 30 years”.

Continued global warming may have far-reaching environmental consequences, which, however, have not yet been conclusively established. Nor are the implications for human life on Earth and the well-being of the human race well understood. Some fundamental questions naturally arise: How sensitive is the environment with its terrestrial and marine ecosystems to human disturbance in general, be it global climate change, destruction of the stratospheric ozone layer, reduced biodiversity, acidification of precipitation fresh waters, etc.? Or is the global environment rather resilient? To what extent is it possible to predict the consequences of even more extensive exploitation of natural resources? How urgent is it to take preventive measures and to what extent is adaptation to change adequate?

A global view of environmental issues is obviously a necessity when trying to answer these kinds of questions. The transfer of energy and the motions of air and water bring about a physical interdependence of what happens in different parts of the global system. (In addition, there are also biotic linkages, e.g., through migratory species and the spreading of deceases.) This very fact will be at the center of our attention. We are actually in the midst of a process of finding out more about these spatial linkages, and it is clear that there will be no easy and clear answers for a long time. Uncertainty is part of the issue. Assessments of these major environmental issues will therefore largely have to be in the form of risk analyses.

The environmental system has a considerable inertia. It may nevertheless occasionally be changing abruptly, if some thresholds are surpassed and these are difficult to foresee. Mostly, however, changes take place slowly, and once a change has occurred it may take decades, sometimes a century or more, to restore the original setting, if this is at all possible. Similarly, society is not able to respond and act quickly, when major issues of environmental change emerge. We are thus concerned with an analysis of the interaction between two complex, non-linear systems, the global environment and the global human society, the future development of which is only partially predictable. Some principle features of such a so-called chaotic system will be outlined in the next section.

The following analysis will not be a comprehensive treatment of global environmental problems, but will rather focus on a set of issues of increasing importance and complexity. Recognition of these specific issues has come gradually, and the presentation will also provide a historical perspective. A detailed analysis of the Earth system as a background for the issues that will be raised in the following can be found in Jacobson et al. (2000).

• Local effects of emissions of gases as well as other substances into the atmosphere and the oceans and direct physical disturbances of life on land with its fresh water systems and vegetation are usually first experienced and recognized (cf. Section 3). Preventive and protective measures in the past have therefore begun with a focus on local damage and local mitigation. High smoke stacks and filters to avoid emissions of smoke have been installed. Similarly, emissions into watercourses, lakes, and coastal waters of the sea have been reduced. Much has been done in developed countries, but new problems still emerge. The methodologies applied and the experiences gained in developed countries need be transferred more effectively to developing countries.

• The regional scope of environmental degradation was not widely recognized until the late 1950s.

(i) At that time local air pollution had increased within and around industrial centers in the United States and in Europe to a degree that required organized counter measures on a regional scale. Sulfur emissions, primarily emanating from the burning of oil and coal that contain sulfur, acidify precipitation, lakes, rivers, and soils and thereby damage vegetation [first detected by Svante Odén in 1968; see Sweden’s Case Study (1971)]. This insight meant a recognition that it was no longer sufficient to build higher chimneys; limitations of emissions would be required (cf. Sections 3 and 4). Nature could no longer be viewed as an infinite sink, an everlasting wastebasket for human activities.

(ii) Fresh water management similarly requires the development of action plans for whole river basins or watershed utilization in order to come to grips with the increasing issues of water pollution and the escalating demands of water for irrigation and industrial as well as domestic use. Drainage pipes farther out into lakes or the sea would not prevent increasing damage (cf. Section 6).

• It was soon thereafter also appreciated that some substances emitted into the atmosphere might stay there for weeks, years, or even centuries, while the characteristic mixing time for the global troposphere is merely about a year or two. Global environmental issues were becoming increasingly important and have also caught public attention in recent decades.

(i) It was recognized in the early 1970s that the chloro-fluoro-carbon gases (CFCs) might decrease the amount of ozone in the stratosphere, which is of fundamental importance in protecting life on earth from destructive UV radiation from the sun [Crutzen (1971), Molina and Rowland (1974); cf. Section 4]. The life times of the CFC molecules were found to be on the order of a hundred years. They therefore spread all around the globe before disappearing very slowly. The ozone hole over the Antarctic continent discovered in the 1980s [Farman et al. (1985)] was the result of emissions primarily in Europe and North America.

(ii) At about the same time the gradual enhancement of carbon dioxide concentrations in the atmosphere and possible associated changes of the climate of the Earth were established scientifically [Manabe and Wetherald (1975)], although Arrhenius (1896) had pointed out this possible long-term effect as the result of burning fossil fuels more than hundred years ago [Ramanathan and Vogelmann (1997); see further Section 7]. It would, however, still take time until a possible human-induced climate change would became a political issue [National Academy of Sciences (1979), Bolin et al. (1986)].

Today the threat to the...

Table of contents

• Cover image
• Title page
• Table of Contents
• Copyright page
• Introduction to the series
• Contents of the handbook
• Dedication
• Preface to the Handbook
• Perspectives on Environmental Economics
• Chapter 1: Geophysical and Geochemical Aspects of Environmental Degradation
• Chapter 2: Ecosystem Dynamics
• Chapter 3: Property Rights, Public Goods and the Environment
• Chapter 4: Economics of Common Property Management Regimes
• Chapter 5: Population, Poverty, and the Natural Environment
• Chapter 6: The Theory of Pollution Policy
• Chapter 7: Mechanism Design for the Environment
• Chapter 8: The Political Economy of Environmental Policy
• Chapter 9: Experience with Market-Based Environmental Policy Instruments
• Chapter 10: Experimental Evaluations of Policy Instruments
• Chapter 11: Technological change and the Environment
• Author index
• Subject index
• Handbooks in Economics
• Forthcoming Titles