Environment and Development

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Environment and Development : 

Environment and Development What do we want to accomplish today? Dispelling Myths What is sustainablity? GDP – what is it? Why is it important? NDP – What is it? How is it useful? Income – Hicksian concept of Income Natural Capital - what is it? Why is it important? Green GDP – what, why and how???

Green GDP: The Importance of Valuing the Environment : 

Green GDP: The Importance of Valuing the Environment Land Economics 1997 Environment and Development 2000 Environmental Science&Technology2000 UNEP/World Bank 2000

GDP : 

GDP The market value of all final goods and services produced inside a nation within a given period of time.

NDP : 

NDP NDP = GDP – Dm NDP = Income


INCOME Hicksian Income – The amount that can be consumed during a week and still leave the individual as well off at the end of the week. The main objective is to keep capital intact.


NATURAL CAPITAL Forests, minerals, Marine Ecosystems, fossil fuels 1) Natural Capital 2)Environmental Services

ForestsNatural Capital : 

ForestsNatural Capital Fiber Fuel

ForestsEnvironmental Capital : 

ForestsEnvironmental Capital Water quality Biodiversity Carbon storage Aesthetics


GREEN GDP The goal of Green GDP is to properly treat changes in Natural Capital so that Green GDP is truly a measure of the maximum amount that could be consumed now without reducing consumption in the future (Horan et al, 2000) “The national income accounts of developing countries often include large credits for resource extraction, with no offsetting depletion charge. The result can be a GDP that reflects a false sense of relative income and economic prosperity” (Davis and Moore 2000). GGDP = NDP – Dn


GREEN GDPNDP - Dn Zimbabwe 1980 – 1989 (2% reduction) Brazil 1978 1993 – GDP (.7%) GDP – Dn = .3% Indonesia 1980s GDP (7.1%) GDP – Dn = 4%


WHY NOT MORE? The very nature of ecosystems – their complexity in structure and function – makes understanding the consequences of ecosystem damage a daunting task even for ecologists.” (V.K. Smith 2000) Theoretical Difficulties Methodological Difficulties

Theoretical difficulties : 

Theoretical difficulties What do we count? What is value?

Methodologicaldifficulties : 

Methodologicaldifficulties How do we count it? Contingent valuation Conjoint analysis Technological innovation / uncertainty

CASE STUDY British Columbia, CA : 

CASE STUDY British Columbia, CA Quality of timber (down) Landslides (up) Restoration of watersheds ($1b) Salmon extinction 743 plants and animals threatened or endangered


GGDP 1997 – 30% is income 70% depletion of capital

Policies for maintaining Natural Capital in British Columbia : 

Policies for maintaining Natural Capital in British Columbia Stop fragmentation Protect old growth Maintain soils Maintain species, genetic and habitat diversity

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