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slides_april_14_2010_new - Review of Last Class A EKC is...

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Review of Last Class A EKC is more likely to occur if government steps in to mitigate pollution externalities Will self interested politicians pursue the “green agenda? Relevant for national and local politicians Do “Green Cities” attract and retain the skilled? Why would a “brown” mayor care about this? The Future of Cities as “Consumer Cities” places where you want to live and work
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Topic 4: Are We Running Out of Natural Resources?
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Introduction to Natural Resource Economics Big Questions: Will the world run out of oil? Will capitalism cause all the trees to be chopped down? And all the fish to be caught? Can capitalism’s “ecological footprint” be shrunk?
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What Signals “Scarcity” in a Market Economy 1. Time series data on prices 2. What evidence would be convincing of growing scarcity? 3. prices = signals The Paul Ehrlich/Julian Simon bet http://en.wikipedia.org/wiki/Simon-Ehrlich_w http://en.wikipedia.org/wiki/The_Simmons- Tierney_Bet
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Optimistic Claim Rising Prices Trigger consumer substitution, producer substitution and innovation Toyota Prius – what triggers such products being researched and brought to market?
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Yale’s Bill Nordhaus “For most of the nineteenth and twentieth centuries, concerns about resource exhaustion have receded as technological change has outpaced the modest degree of resource exhaustion. New seeds and chemical fertilizers have more than offset the need to move cultivation to marginal lands; advances in finding and drilling for oil have countered the need to drill deeper and in harsher climates; and modest pollution- abatement investments have allowed economic growth to continue while lowering concentration of many toxic substances. In short, for the past two centuries, technology has been the clear victor in the race with depletion and diminishing returns.”
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Recent Commodity Prices
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Renewable Resources versus Non- Renewable resources
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Diamond versus Kahn! Jared Diamond writes in his latest bestseller, Collapse, “the larger danger that we face is not just of a two-fold increase in population, but of a much larger increase in human impact if the Third World’s population succeeds in attaining a First World living standard.” See the Jared Diamond Reading
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Price Signals and Shrinking the Footprint In addition, well-functioning markets can help moderate the environmental impact of urban growth. As cities grow, the laws of supply and demand will cause the prices of scarce market goods, such as land, water, and other forms of natural capital, to rise. Rising prices will serve as incentives to economize on resource consumption and to develop and adopt green technologies. [i] These activities will limit the growth of the city’s footprint, not due to any particular concerns about sustainability but due to the narrow pursuit of self-interest. [i]
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This note was uploaded on 11/12/2010 for the course ECON M134 taught by Professor Bresnock during the Spring '08 term at UCLA.

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slides_april_14_2010_new - Review of Last Class A EKC is...

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