Study Guide - Chapter 23 - Economics, Environment, and Sustainability
A New Economic Environmental Vision
Economic growth and development centers on human needs, food, shelter, physical and
economic security, and good health, with a bigger economy being a better economy. The
debate over whether there are limits to economic growth has changed to a debate over the
kinds of economic growth we should encourage.
do not view natural resources as indispensable because substitutes
can be found, and that continued unlimited economic growth is necessary for profit and jobs.
emphasize that there are no substitutes for many vital natural
resources, such as air, water, soil, and biodiversity. They believe conventional economic growth
is unsustainable, as it degrades natural capital, and a new economic design of environmentally
benefit development is needed.
take a middle ground view, seeing some forms of economic
growth as unsustainable, but believing it is best to reform current economic systems of resource
use and not redesign them.
The environment and the economy are intimately linked and a shift to an environmentally
sustainable economy would create new jobs and new investment opportunities that sustain all
life on the planet.
How Are Economic Systems Related to the Biosphere?
is a social institution where goods and services are produced,
distributed, and consumed to satisfy people’s needs and wants. These systems are supported
by three types of resources: 1)
: resources and services produced by the earth’s
natural processes, 2)
: people’s physical and mental talents-labor, innovation,
culture, and organization, and 3)
: the items made from natural resources
by humans, machinery, equipment, and factories.
market-based economic system
, buyers and sellers compete in markets to make
economic decisions on good and services to be produced, distributed, and consumed. The
supply, demand, and price
govern the competitive interacts. When supply and demand are
equal the market price will be at equilibrium and the supplier’s price will match what the
consumer is willing to pay for the item.
Free-market economists believe in private ownership of
all resources and that operating without government interference will solve environmental
problems. They argue: 1) the true value of resources will be determined by market interaction
and 2) resources that are privately owned have great value to their owners. To operate, free-
market economics requires that buyers and sellers not coerce or mislead one another, but in
capitalist markets, competitors try to increase profits by driving one another out of business.
Some companies even withhold information about health risks and environmental dangers for a