Chapter One: Introduction

1.1. Introduction to the subject matter

What is Natural Resource and Environmental Economics?
It is a social science that deals with the economic aspects of natural resources and the environment. It is the
application of economic theories, principles and methodologies to the proper utilization of and management of
natural resources and our environment.
It undertakes theoretical or empirical studies of the economic effects of national or local environmental policies
around the world. Particular issues include the costs and benefits of alternative environmental policies to deal
with air pollution, water quality, toxic substances, solid waste, global warming, and natural resources depletion.

It is also an application of various economic theories and design of instruments for environmental governance to
solve problems like air and water pollution, loss of bio–diversity and disturbance in to the ecosystems health
etc. Generally, it is a policy science.

The discipline acknowledges the value of both the environment and economic activity and makes choices
based on those values. Its goal is to balance the economic activity and the environmental impacts by taking into
account all the costs and benefits. The theories are designed to take into account pollution and natural resource
depletion, which the current model of market systems fails to do. This “failure” needs to be addressed by
correcting prices so that they take into account “external” costs. It tries to maximize the efficient and effective
allocation of natural resources.
It has two parts that are Natural Resource Economics and Environmental Economics. Natural Resource
Economics is distinct from its sister discipline Environmental Economics in its narrow sense, that is,
Environmental economics is concerned with the analysis of the impact of the economy on the
environment, the significance of the environment to the economy and appropriate way of regulating
economic activity so that balance is achieved among environmental, economic and other social
objectives. It is concerned with welfare economics, the economics of pollution, valuation techniques,
and environmental policies (Brown issue).
Environmental resources- resources provided by nature that are indivisible.
On the other hand, natural resources economics is concerned with optimal utilization of natural
resources (green issue). It deals with the supply, demand and allocation of the earth natural resource.
The main objective of natural resource economics is to better understand the role of natural resources in
the economy in order to develop more sustainable methods of managing those resources to ensure their
availability to future generations.
Natural resources- resources provided by nature that can be divided into increasingly smaller units and
allocated at the margin.
Natural resources serve as inputs to the economic system. Environmental resources are affected by the
system (e.g. pollution).
The discipline has evolved rapidly in recent years in the 1960s the early years of the so-called environmental
movement. It has emerged not only as an academic subject for teaching and research in the universities and
research institutions, but also as a tool in the hands of decision makers and planners to solve the problems of
environmental depletion and degradation. The three pillars of sustainable development were widely agreed at
the 1992 Earth Summit to be economic viability, environmental sustainability, and social equity. But the
economic leg of the tool has been far longer and stronger than the other two legs, making for a rather
uncomfortable perch. The emerging discipline of environmental economics helps to design a better tool, where
the three legs are in a more appropriate balance.
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The assumption in Environmental Economics is that the environment provides resources (renewable and non-
renewable), assimilates wastes, and provides aesthetic pleasure to humans. These are economic functions
because they have positive economic value and could be bought and sold in the market place. However,
traditionally, their value was not recognized because there is no market for these services (to establish a price),
which is why economists talk about “market failure”.

1.2. The Emergence of Natural Resources and Environmental Economics

The emergence of natural resources and environmental economics as a distinct subject discipline has been
relatively recent event. However, natural resource use and environmental issues have been an area of concern
for economists since the simultaneous birth of modern economics and industrial society.
A. Classical Economists
This is the earliest economy which was written by the number of economists in the 18th century for the
development of natural resource and environmental economics. A period during the industrial revolution was
taken place and agricultural productivity was there. The dependence economic activity on the natural
environment was a central concern of classical economics.
The major contributors for the development of classical economies
Now let us see views of some classical and neo-classical economists.
1. Adam Smith (1723-1790): “An Enquiry into the Nature and Causes of the Wealth of Nations ”
- Known for his “invisible hand theory”
- Argues for the importance of markets in allocating resources,
- Viewed natural resources as important determinants of wealth of nations and its growth,
- Land was viewed as limited resource and subject to diminishing returns,
- Argued the inevitability of eventual stationary state.
2. Thomas Malthus (1766-1834): “Principles of Population”
- Limitedness of land, continual positive population growth, diminishing returns in agriculture implied a
tendency for output per capita to fall overtime.
- Long-run tendency for the living standard of the people to go down to a subsistence level.
- At the subsistence level, population could reproduce itself, and the economy would attain a steady state with
a constant population size and a constant, subsistence –level living standards.
3. David Ricardo (1772-1823): ”Principles of Political Economy and Taxation”
- Land was available in parcels of varying quality
- Agricultural output could be increased by intensive margin (exploiting a given parcel of land more
intensively) or by increasing the extensive margin (bringing previously uncultivated land into productive
use).
- But, in either case there is diminishing returns
4. John Stuart Mill (1806-1873):
- Utilizes the idea of diminishing returns but recognizes the countervailing effects of the growth of knowledge
and technical progress in agriculture and in production more general,
- Adopted broader view of the roles played by natural resources than his predecessors
- Sources of amenity values become increasingly important as material conditions improved.
B. Neo-classicalists (After Classical Economists)
- Change in a manner in which value was explained. Classical saw value as arising from the labor power
embodied (direct or indirect) in output but for neoclassical explain value as being determined in
exchange so reflecting preferences and cost of production.
- Also replace absolute scarcity by relative scarcity with relative price which are determined by the forces
of supply and demand.
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 - Marginal analysis also adopted allowing earlier notions of diminishing return to be given a formal basis
in terms of diminishing marginal productivity.
Jevons and Menger
They formalize the theory of consumer preferences in terms of utility and demand theory. They gave emphasis
on the structure of economic activity and allocative efficiency rather than the aggregate economy.
Leon Walrus: He developed general equilibrium theory that helps for foundations of concept of efficiency
and optimality.
Alfred Marshall: He elaborate the partial equilibrium, supply and demand based analysis of price
determination.
John Maynard Keynes
Keynes developed the theory of income and output determination. He was concerned to explain and provide
remedies for the problem of persistent high level of unemployment or recession.
In general, the introduction of NR in to neo-classical models of economic growth occurred in the 1970’s when
some neo-classical economists first systematically investigate the efficient and optimal depletion of resources.
Welfare Economics
The final development in this mainstream it attempts to identify circumstances under which it can be claimed
that one allocation of resources is better than others which need criteria for ranking the most commonly used
ethical criterion adopted by classical and neo-classical economist derived from utilitarian.
Economists have attempted to find a method of ranking different states does not require the use of welfare
function and make little use of ethical principles but till they are useful in making prescription about resource
allocation.
Vilferdo Pareto (1897)
He develops the notion of economic efficiency also known as allocative efficiency or Pareto optimality is what
he comes up with. An allocation is Pareto optimal if it is impossible to make any one better off without making
at least one other person worse off.
An economy organized as a competitive market economy will attain a state of economic efficiency that leads
for the idea of market failure arises from externalities. An important early work in the analysis of externalities
and market failure is to be found in Marshall.
The first systematic analysis of pollution as an externality is to be found by Pigou (1920). The emergence of
techniques of cost-benefit analysis in the 1950’s and 1960’s had importance on applied welfare economics and
policy advice.
Ecological Economics
This is the final generation of natural resources and environmental economics. Ecology is a study of nature
housekeeping while economics is the study of human housekeeping. Ecological economics could then be said
to be the study of how those two sets are related to one another. It starts from the recognition that the economics
and environmental systems are interdependent and studies the joint economy environment system in the light
of principles from natural science particularly thermodynamics and ecology.

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Lenneth Boulding is widely regarded as one of the founding father of ecological economics. He uses clear
picture in order to indicate the changes in ways of thinking that he saw as necessary given the law of nature and
their implication for economic activity.
1.3 The three themes of natural and environmental resource economics
1. Efficiency:
Efficiency shows a level of performance that describes using the least amount of input to achieve the
highest amount of output.
Economic efficiency is when all goods and factors of production in an economy are distributed or
allocated to their most valuable uses and waste is eliminated or minimized

Even where resources are used in technically efficient ways, net benefits are sometimes wasted. For
example, suppose that electricity can be, in technically efficient ways, generated by the burning of
either some heavily polluting fossil fuel, such as coal, or a less polluting alternative fossil fuel, such as
gas. Because of a lower price for the former fuel, it is chosen by profit-maximising electricity producers.
However, the pollution results in damages which necessitate expenditure on health care and clean-up
operations. These expenditures, not borne by the electricity supplier, may exceed the cost saving that
electricity producers obtain from using coal. If this happens there is an inefficiency that results from
resource allocation choices even where there are no technical inefficiencies. Society as a whole would
obtain positive net benefits if the less polluting alternative were used.

One way of thinking about efficiency is in terms of missed opportunities. If resource use is wasteful in
some way then opportunities are being squandered; eliminating that waste (or inefficiency) can bring net
benefits to some group of people. An example is energy inefficiency. It is often argued that much energy is
produced or used inefficiently, and that if different techniques were employed significant resource savings
could be gained with no loss in terms of final output.

A substantial part of environmental economics is concerned with how economies might avoid inefficiencies in
the allocation and use of natural and environmental resources.
2. Optimality: a resource-use choice is socially optimal if it maximizes that objective given any relevant
constraints that may be operating. Efficiency is a necessary condition for optimality. This should be
intuitively obvious: if society squanders opportunities, then it cannot be maximizing its objective
(whatever that might be). However, efficiency is not a sufficient condition for optimality; in other
words, even if a resource allocation is efficient, it may not be socially optimal. This arises because there
will almost always be a multiplicity of different efficient resource allocations, but only one of those will
be ‘best’ from a social point of view. Not surprisingly, the idea of optimality also plays a role in
economic analysis.
3. The third theme is sustainability. For the moment we can say that sustainability involves taking care of
posterity (all of future generations). If an allocation of resources is socially optimal, then surely it must
also be sustainable? If sustainability matters, then probably it would enter into the list of society’s
objectives and would get taken care of in achieving optimality. The pursuit of optimality as usually
considered in economics will not necessarily take adequate care of posterity. If taking care of posterity is
seen as a moral obligation, then the pursuit of optimality as economists usually specify it will need to be
constrained by a sustainability requirement.

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1.3. Inter linkage between the environment and the economy
The interaction of economy and environment could not separate. It is one face of two sided cents. Without the
environment economic activities could not exist and without economic activities the environment could not
persist friendly. An economic activity takes place within or is part of the system which is the earth and its
atmosphere which is called as the natural environment. In economics, the environment is viewed as a
composite asset that provides a variety of services of which four major one are given below.
i. As a source of raw materials in to production. E.g. Oil, natural gas, timber, water, etc. Ultimately
these raw materials and energy return to the environment as waste products.
ii. As a receptacle for the waste produced in consumption and production. Production and
consumption activities give rise to waste products or residuals to be discharged into the natural
environment that is the air, water and land. The waste products are mainly in the form of gases e.g.
CO2, SO2, N2O, dry solids e.g. rubbish and scrap and wet solids e.g. waste water.
The natural environment has assimilative capacity that decomposes wastes into less harmful bi-
products that is it absorbs, neutralizes or recycles these wastes. Thus, the natural environment serves
as a waste disposal and reprocessing agent and as a waste sink that is a dump for our wastes.
iii. As provider of amenities to consumers which no substitute exists.. The natural environment provides
recreational facilities and different sources of pleasure and well-being. E.g. swimming from an ocean
beach, national parks, forest walks which are source of pleasures. the exhilaration of white – water
canoeing, the total serenity of a wilderness trek or the breath taking beauty of a sunset and sunrise,
mountain scenery, beaches etc.
iv. It provides life supporting function for human. In this case more related with very essential
elements for life this is supported by the environment. E.g. breathing air, range temperature,
minimum requirement of water, the nourishment we receive from food and drink, and the protection
we derive from shelter and clothing are all benefits we receive directly or indirectly from the
environment.
In general, the interdependence between environment and economic activity are pervasive (wide) and
complex. The complexity increases by the existence of process in the environment that means four
environment services each interact one with other. Similar with other assets, we want to prevent
unnecessary deprecation of the value of this asset so that it may continue to provide aesthetic and life-
sustaining services.
The following figures show the two way relationship between the interdependence of the economy and the
environment

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Fig 1.1: The economic system and the environment
In general environment provide a wide range of services that we can get either directly (life sustenance and
amenities services) and indirectly (raw material) services. Therefore, there is a strong relationship between the
environment and the economic system. What type of relationship is there? Is it a closed or an open one?
The natural environment is the system of four components
- Atmosphere: air
- Hydrosphere: water resource
- Geosphere: land, mineral, etc.
- Biosphere: plants and animals
A natural environment is our system that includes (planate, atmosphere, geo-sphere and etc). Any system can
be categorized as : open, closed and isolated.
In an open system both energy and matter are exchanged with the surrounding environment. An individual
organism is an open system.
In a closed system energy is exchanged with the surrounding environment but not matter that is only energy
crosses the boundaries. There is no exchange of matter. The earth and its atmosphere are a closed system.
In an isolated system neither energy nor matter is exchanged with the surrounding environment. Apart from
the entire universe an isolated system is an ideal, an abstraction.
The environment (the earth and its atmosphere) is a closed system matter does not flow into the environment
from the solar system but the environment derives energy from the sun. The sun provides a constant source of
electro-magneting or solar energy.
Economy- Environment Interdependence

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Matter is anything that has mass and occupies space. It consists of gas, liquid and solid forms. Transformations
of matter from one form in to another require energy.
Energy is the ability of matter to do work. Work is done when matter is changed in structure, in physical and
chemical nature or in location.
Energy exists in various forms including heat, light, mechanical, chemical, electrical and gravitational. Different
sources of energy vary in terms of their availability to do work and hence in terms of their quality and value to
humans. E.g. Gasoline and crude oil, Gasoline is high quality energy whereas crude oil is unrefined lower
quality energy.
There is a close interdependence between the economy and the environment. The economy produces goods and
services by transforming matter and energy (resources) and creates waste in the process. The matter and energy
are taken from the environment and the wastes are put back in to the environment. The relationship between the
economy and the natural system or the environment is governed by physical laws (laws of nature).
i. The materials balance principle or the law of conservation of matter.
The law states that matter cannot be created or destroyed. It can only be transformed from one form
into another. Economic activity cannot, in a material sense, create anything. Economic activity
essentially involves transforming matter extracted from the environment into valuable products. That
is the quantity of matter cannot be changed by economic transformation process, only its quality
(that is the form in which it is available to us) can be changed.
E.g. Crude oil – gasoline: Iron ore – machinery, automobile,: Trees – timber – furniture etc.
ii. The First law of Thermodynamics or the law of conservation of energy.
The law states that energy can neither be created nor destroyed. It can only be converted from
one form to another. The economic transformation process changes the quality, not the quantity, of
the energy available to us.
E.g. The chemical energy in gasoline is transformed into mechanical energy and waste heat during
combustion in an automobile engine while the forms of the energy are different at the end of the
transformation process, the total quantity of energy (kinetic and potential) remain the same.
iii. The second law of thermodynamics or the entropy law
This law states that entropy increases. Entropy is the amount of energy that is not available for work. The
conservation of energy from one form into another is not completely efficient and that the consumption of
energy is an irreversible process.
Some energy quality (the availability to do work) is always loss during conservation and the rest one used is no
longer available for further work. The quantity of energy remains the same at the beginning and end of the
transformation but the quality is always less. Thus, all energy transformations must operate at less than 100%
efficiency.
E.g. Gasoline is high quality energy because it is available for work. It contains energy that can do work. When
we burn gasoline in your car’s engine the potential energy in the gasoline is changed to motion. Some is
converted to waste heat which dissipates into the air. The waste heat in the air is now hard to recapture. This
form of energy is less available to do work than when it was stored in the gasoline. Because of the first law of
thermodynamics we know the quantity of energy must be the same but because of the second law its quality is
not the same. Indeed, its quality is always less.
Implications of the physical laws for the relationship between the economy and the environment:

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 i. The environment imposes scarcity on the economy. Since matter and energy can neither be created
nor destroyed. The quantity of matter and energy in the economy at any given point in time is fixed
and their quality declines when they are transformed. Therefore, there is a limit to the number of
economic transformations that can be made at any given point in time. Thus, the output of the
economy at any point in time is constrained by matter and energy availability.
ii. Waste is an inevitable bi-product of economic activity. The mass of materials and energy flowing
into the economic system from the environment has either to accumulate in the economic system as
product output or return to the environment as waste. That is, the mass of material inputs must equal
the mass of material output for any transformation process. Similarly energy input must equal energy
output for every process.
E.g. Crude Oil = Gasoline + CO (Carbon emission) product output + Waste
Two different types of economic analysis can be applied to increase our understanding of the relationship
between the economic system and the environment.
Positive economics: – attempts to describe what is, what was, or what will be. Normative economics – by
contrast, deals with what ought to be. Disagreements with in positive economics can usually be resolved by an
appeal to the facts. Normative disagreements, however, involve value judgments.
Example: We want to be precise about how the economic system treats the environmental asset. Positive
economics would be used to describe the service flows and to show how those services flows would be affected
by a change in the system (such as the discovery of a new production process). Positive analysis could not,
however, be used to provide any guidance on the question of whether these service flows were optimal. That
judgment would have to come from normative economics.
The essence of the normative approach in economics is to maximize the value of the asset. As long as humans
exist, they cannot avoid affecting the environment. The issue, therefore, cannot be whether humans should have
any impact on the environment; rather, the issue is to define the optimal level of output.
In general, the interdependence between environment and economic activity are pervasive and complex. The
complexity increases by the existence of process in the environment that means four environment services each
interact one with other.

1.4. The two views for the prospects in the environment

While the emergence of natural resource and environmental economics as distinct sub-discipline has relatively
recent phenomenon, concern with the substance of natural resources and environmental economics has much
earlier antecedents. Before looking at different thoughts of various economists on the issue, let us first see two
antagonistic thoughts/models established for thinking systematically about the future of the world’s economy.
These two models are the following: the basic pessimists and the basic optimists
These thoughts are about visions of the future. They were chosen from the literally hundreds that exist because
they define, in some sense, the end points of a spectrum. Models are simplified characterization of reality.
Models allow us to rigorously study issues which are interrelated and global in scale, but, through their
selectivity, models may yield conclusions that are dead wrong. What is may turn out, in retrospect, to be crucial
in understanding a particular dimension. Models are, therefore, useful abstractions that should always be viewed
with some skepticism. Dear student! Now let us discuss briefly these two models one by one.
I. The Basic Pessimist Model

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The view is based upon the inevitability of exceeding the carrying capacity of the planet as the population and
level of economic activity grow. Their study is known as “the limits to growth”. The “limits to growth model”
preordains its conclusion that human activity is on a collision course with nature. Based on a technique known
as “systems dynamics”, developed by Professor Jay Forrester, a large-scale computer model was constructed to
stimulate likely future outcome of the world economy.
The model is characterized by exponential growth coupled with fixed limits. Resources are held in fixed
supply by the model (land, depletable resources etc); and the most prominent feature of systems dynamics is the
use of feedback loops to explain behavior.
The feedback loop is a closed path that connects an action to its effect on the surrounding conditions which, in
turn, can influence further action. There are positive and negative feedback loops:
Positive feedback loops- are those in which secondary effects tend to reinforce the basic trend. The following
are some examples of positive feedback loop:
 Process of capital accumulation: - new investment generates greater output, which when sold, generates
profits. These profits can be used to fund additional new investments. That means the growth process is
self-reinforcing.
 Global warming: - the relationship between methane and global warming may be described as a positive
feedback loop. Since methane is a greenhouse gas, increases in methane emissions contribute to global
warming. As the planetary temperature rises, however, it could release extremely large quantities of
additional methane, and so on.
 Human responses can intensify environmental problems. When shortages of a commodity are about to
occur, for example, consumers typically begin to hoard the commodity. This intensifies the shortage.

Negative feedback loop - is a self-limiting rather than self–reinforcing situation. Example: The role of death
rates in limiting population growth in the model. As growth occurs, it causes larger increases in industrial
output, which, in turn, cause more pollution. The increase in pollution triggers a rise in death rates, retarding
population growth.
Negative feedback loop can provide a tempering influence on the growth process, though not necessarily a
desirable one.
Conclusions of pessimist model
i. Within a time span of less than 100 years with no major change in the physical, economic or social
relationships that have traditionally governed the world development, society will run out of non-renewable
resources on which the industrial base depends. When the resources have been depleted, a precipitous
collapse of the economic system will result, manifested in massive unemployment, decreased food
production, and a decline in population as the death rate soars. There is no smooth transition; no gradual
slowing down of activity, rather, the economic system consumes successively larger amounts of the
depletable resources until they are gone. The characteristic behavior of the system is overshoot and
collapse.
ii. Piecemeal approaches to solving the individual problems will not be successful. The removal of one limit
merely causes the system to bump subsequently into another one, usually with more dire consequences. If
the depletable resources and pollution problems were somehow, jointly solved, population would grow
unabated, and the availability of food becomes the binding constraint.
iii. The third conclusion is: overshoot and collapse can be avoided only by an immediate limit on population
and pollution, as well as a cessation of economic growth.

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II. The Basic Optimist Model
This is the other model which contrasts with the limits to growth model. Is the portrait of the fate of the world
economy painted by the Limits to Growth model an accurate one? Kahn and his associates did not think so and
they presented an alternative vision. Their vision is an optimistic one based in large part on the continuing
evolution of a form of technological progress that serves to push back the natural limits until they are no
longer limiting.
The optimist scenario acknowledges the fact of Rising rates of depletion of non-renewable resources and
increasing flows of environmental wastes. But the advocates of this view believe that markets can serve as
regulators of resource use to overcome both scarce of resources and environmental problems associated with
economic activity.
Consider the issue of resource depletion, as resource become more and more scarce their price would increase
that is scarcity triggers higher prices. Higher relative prices for scarce resources: Stimulate suppliers to find
more of the resources, encourage the adoption of production methods which use relatively fewer scarce
resources in proportion to other inputs, Promote materials recycling, Stimulate the development of substitutes.
This should allow growth to proceed unconstrained by absolute resource limit.
Consider the issue of rising levels of pollution, as waste flows increase the cost of waste disposal and
management rises. This will encourage producers to minimize their cost by employing more efficient
technology that produces less waste and so the ratio of waste to output flows will tend to fall over time.
Moreover, pollution levels decline with higher income because both the demand for better environmental
quality and the ability to pay it increase with income. It therefore follows that economic growth and rising
incomes result in declining rates waste production or pollution and hence diminishing waste to output ratio.
- Thus, according to the optimists view consequences of the growth process induce rising resource
prices and result in increasing costs of waste disposal and economies would adjust to higher relative
prices by adopting more efficient technology and changing their technological coefficients to
economize on scarce resources. The net effect of such responses would permit growth to continue but
using fewer scarce resources. The essence of this reasoning is based on a belief in the existence of
powerful price induced substitution effects
Conclusion of the optimist model
“………… 200 years ago almost everywhere human beings were comparatively few, poor and at the mercy of
the forces of nature, and 200 years from now, we expect, almost everywhere they will be numerous, rich and in
control of the forces of nature” advocated by Kahn and his associates.
The future path of population growth is expected to approximate an S-shaped logistic curve. The retrospective
glance would reveal a period of exponential population growth, while the glance into the future would reveal
continued growth, but with steadily declining growth rates, until, at the end of the next few year period, growth
would automatically come to a halt. To Kahn and his associates, interference with this natural evolution of
society would not only be unwarranted, it would be unethical.
Their model is more qualitative than the limits to growth model and therefore its structure is less specific. It is
not a computer program that simulates the future.
In contrast to pessimists’ model, food production will rise so rapidly as to create an eventual abundance of food.
This vision in turn, depends on some specific sources of optimism.
1) Physical resources will not effectively limit production during the next few years, and
2) Substantial increases can be expected in conventional foods produced by conventional or
unconventional means and unconventional foods produced by unconventional means.

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All of these sources of optimism are related to technological progress such as: irrigation systems, better farming
techniques, development of new hybrid seeds, hydroponics:a process of raising food using no soil.

When all of these lists are combined, the prevailing message is that currently recognized technologies can
overcome the limitations envisioned by the limits to growth view. The cliché, “Necessity is the mother of
invention” captures the flavor of the belief of Kahn and his associates that these technologies will be developed
as they are needed.

1.5. Factors threatening the environment

The problems facing the environment are vast and diverse. Global warming, the depletion of the ozone layer in
the atmosphere, pollution, and destruction of the world’s rain forests are just some of the problems that many
scientists believe will reach critical proportions in the coming decades. All of these problems will be directly
affected by the size of the human population. The first one is the growth of the world’s population.
1. Population growth
Human population growth is at the root of virtually all of the world’s environmental problems. Although the
growth rate of the world’s population has slowed slightly since the 1990s, the world’s population increases by
about 77 million human beings each year. As the number of people increases, crowding generates pollution,
destroys more habitats, and uses up additional natural resources. The population division of the United Nations
(UN) predicted that the world’s population will increase from 6.23 billion people in 2000 to 9.3 billion people
in 2050.Population growth is a problem of both developed and developing countries. Although rates of
population increase are now much slower in the developed world than in the developing world, it would be a
mistake to assume that population growth is primarily a problem of developing countries. In fact, because larger
amounts of resources per person are used in developed nations, each individual from the developed world has a
much greater environmental impact than does a person from a developing country.
2. Global warming
Dear student, have you heard about global warming, its causes and consequences? Gases primarily carbon
dioxide, methane, nitrous oxide, and water vapor (in general greenhouses), insulate Earth’s surface, helping to
maintain warm temperatures. Without these gases, earth would be a frozen planet with an average temperature
of about -180c (about 00F) instead of a comfortable 15 0c (590F). If the concentration of these gases rises, they trap
more heat with in the atmosphere, causing worldwide temperature to rise. Within the last century, the amount of
carbon dioxide in the atmosphere has increased dramatically largely because people burn vast amounts of fossil
fuels-coal and petroleum and its derivatives. The following are some of the consequences of global warming:
- Reduction in the thickness of ice
- Rise in sea levels that will completely inundate a number of low-lying island nations and flood many coastal
cities.
- Extinction of many plant and animals
- Agriculture will be severely disrupted
- Severe hurricanes and droughts.

3. Depletion of the ozone layer

The ozone layer, a thin band in the stratosphere (layer of the upper atmosphere), serves to shield Earth from the
sun’s harmful ultraviolet rays. At this time, o-zone layer is being destroyed by chlorofluorocarbons (CFC).
Increased ultraviolet radiation would lead to a growing number of skin cancers and cataracts and also reduce the
ability of immune systems to respond to infection. Additionally, growth of the world’s oceanic plankton, the
base of most marine food chains, would decline. If plankton populations decline, it may lead to increased
carbon dioxide levels in the atmosphere and thus to global warming.

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Even if the manufacture of CFC s is immediately banned, the chlorine already released into the atmosphere will
continue to destroy the ozone layer for many decades. Because chlorine is not affected by its interaction with
ozone, each chlorine molecule has the ability to destroy a large amount of ozone for an extended period of time.
4. Habitat destruction and species extinction
Plant and animal species are dying out at an unprecedented rate. Estimates range that from 4,000 to as many as
50,000 species per year become extinct.The leading cause of species extinction is habitat destruction. If the
world’s rain forests continue to be cut down at the current rate, they may completely disappear by the year
2030.
5. Air pollution
A significant portion of industry and transportation burns fossil fuels, such as gasoline. The most common air
pollutants contain carbon, sulfur, and nitrogen. Acid rain forms when sulfur dioxide and nitrous oxide transform
into sulfuric acid and nitric acid in the atmosphere and come back to Earth in precipitation. Acid rain has made
lakes so acidic that they will no longer support fish populations.
6. Water Pollution
Some estimates suggest that huge number of people worldwide lack safe drinking water and that large number
of deaths per year can be attributed to water borne diseases.
7. Groundwater depletion and contamination
Worldwide, groundwater is 40 times more abundant than fresh water in streams and lakes. In the United States,
for example, approximately half the drinking water comes from groundwater. Although groundwater is a
renewable resource, reserves replenish relatively slowly.
In addition to groundwater depletion, scientists worry about ground water contamination, which arises from
leaking underground storage tanks, poorly designed industrial waste ponds, and seepage from the deep-well
injection of hazardous wastes into underground geologic formations.
8. Chemical Risks
A number of toxic substances that humans encounter regularly may pose serious health risks. Pesticide residues
on vegetable crops, mercury in fish, and many industrially produced chemicals may cause cancer, birth defects,
genetic mutations, or death. Preliminary results indicate that these chemicals, in trace amounts, may disrupt
development and lead to a host of serious problems in both males and females.
9. Environmental Racism
Studies have shown that not all individuals in this world are equally exposed to pollution. Example: Worldwide
toxic – waste sites are more prevalent in poorer communities. In the United States, the single most important
factor in predicting the location of hazardous – waste sites is the ethnic composition of a neighborhood. Three
of the five largest commercial hazardous – waste landfills in America are in predominantly black or Hispanic
neighborhoods, and three out of every five black or Hispanic Americans live in the vicinity of an uncontrolled
toxic- waste site. Selection of sites for hazardous-waste disposal involves racism.
Environmental racism takes international forms as well. American corporations often continue to produce
dangerous, U.S banned chemicals and ship them to developing countries. Additionally, the developed world has
shipped large amounts of toxic waste to developing countries for less-than-safe disposal. Example: Experts
estimate that 50 to 80 percent of electronic waste produced in the United States, including computer parts, is
shipped to waste sites in developing countries.
10. Energy Production
The limited supply of fossil fuels, coupled with their contributions to global warming, air pollution, and acid
rain, makes it clear that alternative forms of energy will be needed to fuel industrial production and
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transportation. A number of energy alternatives are available, but many of these options are unlikely to replace
fossil fuels in the foreseeable future because they cost more, produce less energy than fossil fuels, or pose safety
risks.

1.6. Efforts to protect the environment

What types of efforts did you make to protect your surrounding? Most scientists agree that if pollution and
other environmental deterrents continue at their present rates, the result will be irreversible damage to the
ecological cycles and balances in nature upon which all life depends. Scientists warn that fundamental, and
perhaps drastic, changes in human behavior will be required to avert an ecological crisis.
To safeguard the healthful environment that is essential to life, humans must learn that earth does not have
infinite resources. Earth’s limited resources must be conserved and, where possible, reused. Furthermore,
humans must devise new strategies that mesh environmental progress with economic growth. The future growth
of developing nations depends upon the development of sustainable conservation methods that protect the
environment while also meeting the basic needs of citizens.
Global efforts to protect the environment
Now, we will discuss some of the international efforts made to protect our environment from its threats. During
the late 1960s and early 1970s nations began to work together to develop worldwide approaches for monitoring
and restricting global pollution.
UNEP (United Nations Environmental Program) is established and designed to be “the environmental
conscience of the United Nations,” and, in an attempt to allay fears of the developing world, it became the first
UN agency to be headquartered in a developing country, with offices in Nairobi, Kenya. In addition to
attempting to achieve scientific consensus about major environmental issues, major focus for UNEP has been
the study of ways to encourage sustainable development - increasing standards of living without destroying the
environment.

A. International treaties
Dozens of international agreements have been reached in recent decades in an effort to improve the world’s
environmental status.
 The most important international agreement was the 1987 Montreal protocol on substances that deplete the
ozone layer. For the first time, an international pact set specific targets for reducing emissions of chemicals
responsible for the destruction of Earth’s ozone layer.
 The international community again came together in 1989 to form the Basel Convention on the control of
Transboundary movements of Hazardous wastes and their disposal, a treaty that limits the movement of
hazardous wastes between countries.
 In 1992, the UN Conference on Environment and Development was held in Rio de Janeiro, Brazil,
Popularly known as the Earth Summit, the largest gathering of world leaders in history. There were two
major treaties.
 An agreement for nations to voluntarily reduce emission of gases leading to global warming
 A pact on biodiversity requiring countries to develop plans to protect endangered species and habitats
 In 1997, the Kyoto Protocol was adopted in Kyoto, Japan, on 11 December, 19997 was agreed as a legal
instrument to implement the Convention, which commits its parties by setting internationally binding
emission reduction targets. The Protocol includes quantified emissions reduction targets for developed
countries – known as Annex 1 Parties. It also specifies accounting methods and compliance mechanisms for
the targets, as well as creating the basis for global emissions trading. The Kyoto mechanisms are
 International Emissions Trading Clean Development Mechanism(CDM and Joint Implementation(JI)

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 In 2002, delegates from nearly 200 countries convened at the World Summit on sustainable Development in
Johannesburg, South Africa, to establish new sustainable development goals for the 21 st century. They also
negotiated to strengthen commitments from the governments of developed nations to provide aid for
sustainable development.

B. Green Parties
Dear learner, do you know a political party with main objective of environmental protection? A desire for
environmental change led to the creation of various political parties around the world whose emphasis was
largely on environmental protection. The first of these organizations, collectively known as green parties, was
the values party in New Zealand, created in 1972. In 1993, 23 green parties from eastern and western Europe
came together to form the European Federation of Green parties. They hoped that together they would have the
leverage necessary to demand that environmental issues such as pollution control, population growth, and
sustainable development be more fully addressed by various national governments and international bodies.

C. The Millennium Development Goals (MDGs)

The Millennium Development Goals were adopted few years ago by all the world's governments as a blueprint
for building a better world in the 21st century. The Millennium Development Goals (MDGs) are eight goals to
be achieved by 2015 that respond to the world's main development challenges. The MDGs are drawn from the
actions and targets contained in the Millennium Declaration that was adopted by 189 nations-and signed by 147
heads of state and governments during the UN Millennium Summitin September 2000.
In the MDGs, environment is given due attention as one of those MDGs i.e. the 7 th MDG, “Ensuring Environmental
Sustainability”. The following are the targets and indicators of this Goal.
Target 1: Integrate the principles of sustainable development into country policies and programs; reverse loss
of environmental resources
1. Forested land as percentage of land area (FAO)
2. Ratio of Area Protected to Maintain Biological Diversity to Surface Area (UNEP)
3. Energy supply (apparent consumption; Kg oil equivalent) per $1,000 (PPP) GDP (World Bank)
4. Carbon dioxide emissions (per capita) and consumption of Ozone- Depleting CFCs (ODP Tons)
Target 2: Reduce by half the proportion of people without sustainable access to safe drinking water
1. Proportion of the Population with Sustainable Access to and Improved Water source (WHO/UNICEF)
2. Proportion of the Population with Access to improved sanitation (WHO/UNICEF)
Target 3: Achieve significant improvement in lives of at least 100 million slum dwellers, by 2020
1. Slum population as percentage of urban population (secure tenure index) UN Habitat)

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