mazher3 - 1. Scarcity: An Economics Primer This chapter...

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1. Scarcity: An Economics Primer This chapter introduces 10 principles of economics that shed light on environmental problems. They are presented as the answers to commonly asked questions about environmental issues. It should quickly become clear that economics is about choice, not necessarily about money, and that economics can help us understand environ- mental choices, both public and private. 1. In a land as rich as the United States, why do we face so many difficult choices about the environment? Scarcity, even in a nation as wealthy as the United States, is always with us, so choices must be made . We have vast forests in this country but not enough to provide all of the wood, all of the wilderness, and all of the accessible recre- ation that we want. As soon as we log trees, build roads, or improve trails and campsites, we lose some wilderness. Similarly, we have large amounts of fresh water, but if we use water to grow rice in California, the water consumed cannot be used for drinking water in California cities. If we use fire to help a forest renew itself, we will have air pollution downwind while the fire burns. We have many goals, so we have to make choices about how to allocate our limited resources. The cost of those choices is what we give up— the cost of opportunities lost. Trouble is, people have differing goals and disagree about which choice is the best one. Pursuit of differing goals may lead to conflict. Nowhere is this clearer than in environmental matters. California’s San Bernardino County was about to build a new hospital. Less than 24 hours before groundbreaking, the U.S. Fish and Wildlife Service announced that the flower-loving Delhi Sands fly, which had been found on the site, was an endangered species. So the county had to spend $4.5 million to move the hospital 250 feet to give the flies a few acres to live on and a corridor to the 1 74446$$CH1 02-13-03 09:53:04 CATO
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E CO-NOMICS nearby sand dunes. It also had to divert funds from its medical mission to pay for biological studies of the fly. 1 Environmentalists who want biological diversity were relieved that the hospital would move, but county officials were upset at the delay and the high cost that its hospital budget and the taxpayers would have to bear. To use resources one way sacrifices the use of those resources for other things. There is no escaping cost. San Bernardino County faced a choice between timely provision of a health care facility and protection of a unique species. Often the choices, however, are between different environmental goals. Our old-growth forests can be preserved, but that means giving up the enhanced recreation and wildlife appreciation that trails and campsites bring for many people. Strict preservation (which is what a wilderness designation means) also means that trees can’t be thinned to minimize insect infestations and potentially catastrophic fires. In that case, the choice could be between keeping old-growth trees standing—until the next fire—or cutting some of them down
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mazher3 - 1. Scarcity: An Economics Primer This chapter...

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