project

4

Economic Principles

Jose Valdez

New Mexico State University

ECON-337V

Frank Ward

10/26/23

Economic Principles

Introduction

Public policy decisions are heavily influenced by economics, especially when dealing with complicated topics like sustainability and environmental protection. This paper will examine how several economic principles, such as supply and demand, externalities, public goods, common property resources, cost-benefit analysis, and discount rates, might direct the creation and implementation of policies intended to address environmental concerns in this study. We can better grasp how economic ideas connect with environmental challenges and help create effective solutions by looking at these principles.

The Laws of Supply and Demand

Understanding how market forces affect environmental outcomes requires an understanding of the basic concepts of supply and demand. A strong demand for a good or service typically results in higher production and consumption, which could put stress on the environment's resources. On the other hand, less demand may result in less strain on resources. In order to achieve sustainability, supply and demand must typically be balanced in policies intended to solve environmental challenges.

For example, increased exploitation of fossil fuels due to rising demand has exacerbated environmental degradation and contributed to climate change. Governments can solve this issue by enacting laws like cap-and-trade programs or carbon taxes, which raise the price of fossil fuels and, hence, decrease demand. These laws, which minimize environmental externalities through market mechanisms, are based on the economic theory of supply and demand.

Externalities

Externalities are unintentional consequences of economic activity that have an impact on those not directly participating in a transaction. Both good and negative external effects can have a big impact on environmental policy. One example of a negative externality that affects the quality of the air and water and, consequently, the health and well-being of the local communities is industrial pollution. Governments may respond to this by enacting laws or levies that internalize external expenses and encourage businesses to use greener technologies or cut back on emissions.

Public Goods

Public Goods are resources that cannot be taken away from anyone after they are made available. The use of one does not make others less available. Clean water and air are examples of environmental goods that frequently have these qualities. Without government assistance, public goods are vulnerable to misuse or deterioration since there is no private market motive to deliver them.

To ensure the safeguarding of public goods, governments must take ownership of their protection. Public assets that require government funding and supervision to prevent abuse and protect against deterioration include national parks and natural reserves. Economic theory requires that the government play a significant role in providing and maintaining these public goods in order to guarantee their sustainable use for future generations.

Cost-Benefit Analysis

Cost-benefit analysis (CBA) is a technique for assessing a project's or policy's effects on the economy and environment. In order to decide if a project or program is worthwhile, the overall costs and benefits must be compared. CBA offers a methodical approach to weighing trade-offs and determining the best course of action for environmental policy is offered by.

Governments can utilize CBA, for example, to weigh the implementation costs against the long-term economic and environmental advantages of investing in renewable energy projects. Policymakers can make well-informed decisions that enhance societal welfare while reducing negative environmental impacts by quantifying both the costs and benefits.

In summary in regards to forming environmental policies and directing decision-making in the face of challenging environmental issues, economic concepts are crucial. The framework provided by supply and demand, externalities, public goods, common property resources, cost-benefit analysis, and discount rates enables policymakers to tackle environmental concerns and accomplish sustainability objectives. Governments may ensure a more sustainable future for our planet by properly implementing these economic concepts to create a balance between economic expansion and environmental conservation.

6

Natural Resource Economics.

Jose Valdez

Mr. Ward

11/8/23

Natural Resource Economics

1. Steiner, J. L., Devlin, D. L., Perkins, S., Aguilar, J. P., Golden, B., Santos, E. A., & Unruh, M. (2021). Policy, Technology, and Management Options for Water Conservation in the Ogallala Aquifer in Kansas, USA.  Water,  13(23), 3406.

The authors recommend Ogallala Aquifer to establish a policy that can promote more innovation in the Agriculture and Irrigation sector to improve Kansas and the entire U.S. economy. This is the largest aquifer in the United States and I agree with the authors on the proposed changes. Some of the proposals that I found applicable include giving more power to the state government so that it can regulate Ogallala Aquifer management. The authors also proposes the local government to be made more flexibility and work closely with the state government to regulate the management of Ogallala Aquifer. The authors present a very smart idea on how Ogallala Aquifer can use technology to minimize expenses and stimulate the economy. The proposal suggest the aquifer be using tech to manage innovations on soil water monitoring. I believe technology is one of the “tools” used today to reduce cost without compromising quality and delivery of services to the public.

2. Garrone, P., Grilli, L., & Marzano, R. (2020). Incentives to water conservation under scarcity: Comparing price and reward effects through stated preferences. Journal of Cleaner Production, 244, 118632 .

This research paper evaluates public awareness and impact of water incentive on an economy. The authors used their findings to propose three water incentive policies. The first policy focuses on water prices, the second policy focused on monetary rewards, and the last one focused on how water should be perceived as a prize. The area of study was Europe and the authors proposes that these policies can help the continent to save water. The authors established the three incentive policies after noting possible issue of water scarcity in future. I agree with the author and this is a better approach of creating awareness to the public about water conservation. The authors found that people are more sensitive to monetary incentives. I believe this can make many people to use water more sustainably and sparingly, knowing the cost associated with it.

3. Habteyes, B. G., & Ward, F. A. (2020). Economics of irrigation water conservation: Dynamic optimization for consumption and investment. Journal of environmental management, 258, 110040 .

The authors start by acknowledging the two challenges that have affected many people globally. They include water scarcity and increased food demand. I agree with the author because these two are interconnected because harvests are always low when there is no enough water for farmers. The authors suggest that irrigation water supplies must be protected to avoid such issues. I believe this is why the authors evaluated the economic performance of water conservation infrastructure. To achieve this objective, the authors developed a model that allowed them to develop two main variables. They include water used and land saved. I agree with their conclusion that it is important for all stakeholders to use water sustainably. I recommend water managers to capitalize on collecting water and keeping it safe for use during dry seasons.

4 Berbel, J., & Esteban, E. (2019). Droughts as a catalyst for water policy change. Analysis of Spain, Australia (MDB), and California . Global Environmental Change, 58, 101969.

This is a research paper that focus on Spain, California, and the Murray-Darling Basin in Australia as the areas of study. The authors identified these three regions or countries because their rate of water scarcity is almost the same, and experience similar climatic issues. I agree with this because water scarcity in those three regions have escalated, affecting the public and the water sector in each region. The authors compares some of the polices enacted in each region to curb these issues. It was interesting to find out that despite the differences in governance, all the three regions have developed long term measures and found climate change to be a potential threat. I agree with the finding on climate change and I think it might worsen the water scarcity situation.

5 Mishra, A., Bruno, E., & Zilberman, D. (2021). Compound natural and human disasters: Managing drought and COVID-19 to sustain global agriculture and food sectors. Science of the Total Environment, 754, 142210.

The authors start by acknowledging that the last five years have been difficult, especially because of drought and the COVID-19 pandemic. This is true because COVID-19 pandemic has affected many industries, including Food and Agriculture and dilapidated economies of many countries. The authors suggest that developing countries have been affected severely and it will take time before they stabilize their economy again. The paper evaluates some of the applicable policies for the two issues by focusing of Food and Agriculture industry. I believe that Agriculture can be a game changer in many countries and all they need is better policies such as laws that authorize the government to only subsidize production, instead of consumption.

References

Berbel, J., & Esteban, E. (2019). Droughts as a catalyst for water policy change. Analysis of Spain, Australia (MDB), and California . Global Environmental Change, 58, 101969..

Garrone, P., Grilli, L., & Marzano, R. (2020). Incentives to water conservation under scarcity: Comparing price and reward effects through stated preferences. Journal of Cleaner Production, 244, 118632.

Habteyes, B. G., & Ward, F. A. (2020). Economics of irrigation water conservation: Dynamic optimization for consumption and investment. Journal of environmental management, 258, 110040

Mishra, A., Bruno, E., & Zilberman, D. (2021). Compound natural and human disasters: Managing drought and COVID-19 to sustain global agriculture and food sectors. Science of the Total Environment, 754, 142210.

Steiner, J. L., Devlin, D. L., Perkins, S., Aguilar, J. P., Golden, B., Santos, E. A., & Unruh, M. (2021). Policy, Technology, and Management Options for Water Conservation in the Ogallala Aquifer in Kansas, USA.  Water,  13(23), 3406