for michael smith

ECO 435

Environmental Economics

SP 2017

First Exam: Take Home

I. ESSAY: (50 points)

Background

First, accept—as a premise—that cultural change is more rapid than biological change. This claim in some form appears in the writings of E.O. Wilson and Paul Ehrlich and even Julian Simon. In The Bottleneck, Wilson advocates a collective cultural innovation--the adoption of a universal environmental ethic--to help us out of the tight spot we’re in (Ehrlich’s environmental disruption). And the two opposing parties to The Bet—Ehrlich and Simon—seem to agree that humans can change their behavior—their culture-- if confronted with sufficiently compelling information to support that change.

But we take some convincing. “The human brain evidently evolved to commit itself emotionally only to a small piece of geography, a limited band of kinsmen, and two or three generations into the future.” (Wilson, 91). Humans are modelled as selfish and shortsighted, and instances of cooperation can be reduced to ‘enlightened self-interest’: Cooperation is portrayed as almost a contradiction of the genetic coding. Darwinian filters are improperly envisioned as a selection process in which the best man wins as if the game being played is survival of the fittest at the individual level. But what if our individual as well as our species’ survival is a mutual affair? What if humans are social animals whose survival is assured only when we cooperate (to compete)? And what if the bone of contention is primordial-- energy resources: for which Nature is our only source and which all living things covet?

In The Most Invasive Species , Marean submits that we are genetically encoded to develop this trait which he dubs hyperprosociality. That said, it is not always in play but instead had to be switched on, or turned on or triggered by circumstances. According to Marean, those circumstances—apparent in the evolutionary record—appear to have been when human groups came into conflict. This must first strike you as ironic: that we cooperate more when we are in conflict. But more precisely, we seemed to have learned to cooperate to great effect when the overall human population was small but was ‘bottled’ in subgroups, and the competition between those subgroups was intense. The intensity of the struggle was occasioned by scarcity: the discovery of a defensible resource: shellfish. If you saw “The Gods Must Be Crazy,” you can appreciate how the emergence of a new, valuable but rare resource—a coke bottle—can sponsor conflict…and efforts to restrict use.

Defensible means, in effect, excludable; humans can institute and enforce barriers, preventing others from enjoying the same resource or regulating the extent to which others can abuse the resource. Spear points may help, against ‘others,’ but rationing resources WITHIN the tribe requires rules, predicated on language. Human language is instrumental in enabling us to play the game of indirect reciprocity.

You will be writing an essay consisting of a series of paragraphs using the Nowak, Marean and Cassidy articles.

In each paragraph, you have a job to do.

1. define sustainability (per Brundtland Commission)

2. briefly argue that it is urgent to combat climate change because to fail to do so would violate intergenerational equity

3. define a public good and explain the sense in which ‘a stable climate’ can be regarded as a public good.

4. define a commons and explain the sense in which ‘the climate’ can be construed as a commons.

5. define a club good and explain the sense in which “the climate” can be construed as a club good/service.

6. explain how ‘exclusion’ (ranging from Pigouvian “extraordinary restraints” to Coase-clear articulations of property rights) can convert a commons into a club good

7. explain the circumstances under which humans became adept at playing games of indirect reciprocity (noting the role of climate change as well as the emergence of defensible resources in triggering the latent ‘gene’ for cooperation). This will require you to clarify what indirect reciprocity means.

8. carefully detail the necessary requirements for motivating people to be good stewards of the commons in public goods games (speaking to the role of language in providing those necessary ingredients).

9. speak to Adam Smith’s three duties of the sovereign (the three jobs of government)

10. argue that combatting climate change is justified by all three rationales.

II. COAL GRID (50 points)

Employ the handout (reading) from the Union of Concerned Scientists on Coal to construct a grid (similar to the one on the back of this instruction sheet)) in which you speak to just COAL—the material and the residuals and the goods & services it enables (e.g. electricity). Your task is to complete fill the two large textboxes with precise detail—NATURE as SOURCE (in which you clarify types of coal and the methods of extraction) and NATURE as SINK (in which you clarify the pollutants associated with coal) to provide a complete story of coal: You will also need to clarify the specific methods of extraction Finally you must provide detail WITHIN the ECONOMY to reveal the specific goods and services enjoyed by consumers as well as any recycled residuals--producer and consumer--that apply (or may apply in the future).