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The
nment
Environment
andd
pment
Development
 Environment and
Development: The
Basic Issues
environmental issues affect, and are
affected by, economic development
classic market failures lead too much
environmental degradation
 Environment and
Development: The
Basic Issues
poverty and lack of education may
also lead to non-sustainable use of
environmental resources
global warming and attendant
climate change is a growing concern
in developing countries
GLOBAL WARMING
increasing average air and ocean
temperatures

CLIMATE CHANGE
nontransient altering of underlying
climate, such as increased average
temperature, decreased annual
precipitation, or greater average intensity
of droughts or storms
 Sustainable
development
and
Environmental
Accounting
SUSTAINABLE DEVELOPMENT
pattern of development that permits future
generations to live at least as well as the
current generation, generally requiring at
least a minimum environmental protection

ENVIRONMENTAL ACCOUNTING
the incorporation of environmental
benefits and costs into the quantitative
analysis of economic activities
 an environmental
ENVIRONMENTAL
accounting measure of
CAPITAL the total annual income
portion of a country’s that can be consumed
overall capital assets without diminishing the
that directly relate to overall capital assets of a
the environment - for nation ( including
example, forests, soil environmental capital)
quality, and ground SUSTAINABLE
water NET NATIONAL
INCOME (NNI)
Symbolically,
NNI* = GNI - Dm - Dn
Where:
NNI - sustainable national income
GNI - gross national income
Dm - depreciation of manufactured capital
assets
Dn - depreciation of environmental capital
Environment
Relationships to
Population, Poverty,
and Economic
Growth
Population
rapidly growing populations have led to land,
water, and fuelwood shortages in rural areas
and to urban health crises stemming from
lack of sanitation and clean water

increasing population density has contributed

to severe and accelerating degradation of the
very resources that these growing
populations depend on for survival
Poverty
the poor are usually the main victims of
environmental degradation
people living in poverty have less political
clout to reduce pollution where they live and
living in less productive polluted lands gives
the poor less opportunity to work their way
out of poverty
in some cases, the poor are also its agents,
typically as a result of the constraints of their
poverty
Growth
increasing the economic status of the poorest
group would provide an environmental windfall
as the income and consumption levels of
everyone else in the economy also rise, there is
likely to be a net increase in environmental
destruction
it was widely believed that as per capita
incomes rose, pollution and other forms of
environmental degradation would first rise and
then fall in an inverted-U pattern
Environmental Kuznets Curve
Environment and
Rural and Urban
Development
 Rural Development
rural development and the environment are
intrinsically linked
rural communities often rely heavily on
natural resources for their livelihoods, such
as agriculture, forestry, and fishing
sustainable rural development requires
careful management of these resources to
ensure long-term productivity and
environmental health
 Urban Development
urban development and the environment
also have a complex relationship. As cities
grow, they place increasing pressure on
natural resources and ecosystems.
 Natural Resource-Based
Livelihoods as a Pathway
Out of Poverty: Promise and
Limitations
more than half of the economically active
people in the developing world depend on
agriculture, hunting, fishing, or forestry
this environmental income, along with foraging
and other activities, is vitally important to a
majority of the poor and under the right policy
conditions can offer a pathway out of poverty.
Global
Warming
and Climate
Change
Scope, Mitigation, and Adaptation
Mayan
 Some Impacts of
Climate Change in
Developing Countries
Prolonged droughts, expanded desertification
Increased severity of storms with heavy
flooding and erosion
Longer and more severe heat waves
Reduced summer river flow and water
shortage
Decreased grain yield
 Some Impacts of
Climate Change in
Developing Countries
Climate-induced spreading ranges of pests
and disease
Lost and contaminated groundwater
Coastal flooding
Deteriorated freshwater lakes, coastal
fisheries, mangroves, coral reefs
Forest and crop fires
 Problems primarily but
not exclusively caused by
developed countries
Rapid industrial growth especially
in Asia
Deforestation in developing
countries.
 Strategies for
Mitigation
Taxes on carbons
Caps on greenhouse gases (with
carbon markets)
Subsidies to encourage
technological progress
 Climate Change
Adaptation
The UNDP has defined climate change
adaptation as “a process by which
strategies to moderate, cope with and
take advantage of the consequences
of climatic events are enhanced,
developed and implemented.”
 Types of
Adaptation
Planned (or policy) adaptation -
adaptation undertaken by
governments
Autonomous adaptation - adaptation
undertaken directly by households,
farms, and firms in response to climate
change they experience or anticipate.
10.3 Economic Models of
Environmental Issues

Privately owned resources

- applies neoclassical theory

- This theory states that inefficiencies

result from imperfections in property
rights
Perfect property rights are characterized by four
conditions:

1. Universality

2. Exclusivity or excludability

3. Transferability

4. Enforceability
COMMON PROPERTY RESOURCES
A resource that is collectively or publicly
owned and allocated under a system of
unrestricted access,or as self regulated by
users

- inefficiencies may arise because resource is not

privately owned
- traditional models do not concern themselves with
equity and income distribution
- family farmers can benefit from extended or
ownership
 Public good and bads: Regional
Environmental Degradation and the
free-rider problem
 Externality- Any benefit or cost borne by an individual economic unit
that is a direct consequence of another’s behavior

Internalization -The process whereby external environmental or other

costs are borne by the producers or consumers who generate them,
usually through the imposition of pollution or consumption taxes

Public good- An entity that provides benefits to all individuals

simultaneously and whose enjoyment by one person in no way diminishes
that of another
Public bad -An entity that imposes costs on
groups of individuals simultaneously

Free-rider problem -The situation in which

people can secure benefits that someone
else pays for

Limitations of the public goods

framework
-Pricing mechanism
 10.4
Urban Development
and the Environment
 Introduction to Urban Slums
and Environmental Issues
Urban slums, resembling rural poor
communities face long working
hours, uncertain income, and vital
trade-offs among nutrition, medical
care, and education. Urban slums,
however, pose greater exposure to
hazardous environmental
conditions, impacting the poorest
harshly.
 Indoor Pollution in Urban Slums
Health Risks from Cooking and Poor Ventilation
Indoor Cooking Children &
Pollutants Fuel Education
Health threating Smoke from Many children miss
school to help with
pollutants both fuels used for household tasks,
inside and cooking can leading to chronic
outside the cause severe bronchitis and
home. long-term health acute respiratory
consequences. infections.
Outdoor Pollution and Sanitation
Health Risks from Environmental Exposure
Street Vendors & Untreated
Market Workers Sewage
Constant exposure to Sewage in open drains
high level of pollutants. spreads infectious diseases.

Contaminated Medical Cost

Food & Water High opportunity costs and
Leads to frequent medical fees make
diarrhea, malnutrition, and treatment unattainable for
dehydration in children. many households.
Urban Children & Environmental Hazards
Education & Health Impacts
Outdoor Lead Exposure
Exposure
Children exposed to High levels of atmospheric
emissions from automobiles lead due to lack of catalytic
and factories. converters.
Academic Survival Rates
Challenges Boys most likely to survive
Physical and mental than girls due to access to
impairments affect school medical care.
performance.
 Industrialisation and Urban Air Pollution
WHO and World Bank Findings
Global Air Pollution Environmental
90% of people worldwide
Kuznets Curve
breathe polluted air. Pollution tends to rise with income
Developing economies face levels, then fall with further
worsened environmental economic development.
conditions initially.
Key Pollutants Pollution Costs
Externalities lead to social costs not
Energy use, vehicular
accounted for in free-market
emissions, and industrial
equilibrium.
production are principal
sources of air pollution.
 Health Hazards of Industrial Pollution
Case Studies and Implications
Case Studies
Bangkok and Mexico City suffer severe health impacts from airborne
lead.

Tolerance and Nutrition

Poor nutrition and ill health exacerbate impacts of pollutants, especially
in developing countries.

Child Health
Young children inhale more pollutants per unit of body weight compared
to adults.
Congestion, Clean Water, and Sanitation
Impact on Urban Poor
Lack of Access Living Conditions
Over a billion people lack
improved water sources and Crowding in urban slums intensifies
sanitation. exposure to adverse environmental
conditions.

Economic Costs Infrastructure Investment

Delaying investment in water and
Lost productivity and
sanition infrastructure leads to
expensive medical care hinder
higher future costs.
economic development.
Water Contamination and Economic Impact
Broad Consequences
Private Wells and Sewage disposal
Groundwater
Overtaxing groundwater Untreated sewage contaminates
causes land subsidence and water sources, causing long-term
flooding. shortages.

Foreign Exchange Preventive Measures

Earnings Costs of preventive measures are
Contaminated water supplies lower compared to future economic
can hurt agricultural export losses.
potential.
The Local and Global
Costs of Rain Forest
Destruction

Mayan
Greenhouse Gases
-Gases that trap heat within the earth’s
atmosphere and can thus contribute to
global warming
Biodiversity
-Variety of life forms within an ecosystem
Global public good
-A public good, whose benefits reach across
national borders and population groups
10.6 Policy Options for
Developing Countries
What Developing Countries can do:
1. Proper resource pricing
2. Community involvement
3. Clearer property rights and resource ownership
40%
4. Programmes to improve the economic alternatives
of the poor
5. Raising the economic status of women
6. Industrial emissions abatement policies
7. Proactive stance toward climate change and
environmental degradation
Proper Resource Pricing
Reform government pricing policies,
such as subsidies, that harm the
environment and benefit wealthier
groups instead of the poor.
Eliminating harmful subsidies can
protect the environment and improve
sustainability, though it may face
political resistance.
Example: Subsidized water often
benefits richer households or is
misused, leading to resource waste.
Community Involvement

Programs are more effective

when they engage local
communities, aligning with
their needs and encouraging
low-cost, cooperative
solutions.
Clearer Property Rights and
Resource ownership
Secure land and resource
ownership for the poor to
promote investments in housing,
sanitation, and farming
improvements.
Legal reforms, such as land
tenure or redistribution, can
address inequalities and prevent
exploitation by landlords.
Improving Economic
Alternatives for the Poor

Create job opportunities and sustainable

livelihoods to reduce poverty and
overdependence on limited resources.
Raising the Economic Status
of Women:
Empower women
economically, as it leads to
better resource management
and social outcomes.
Raise opportunity cost of their
time and may lead to decrease in
desired family size.
Abating Industrial
Emissions

Implement policies to reduce

pollution and encourage cleaner
industrial practices.
Proactive Climate
Adaptation

Prepare for and adapt to

climate change impacts
to safeguard
development progress
and resilience.
How developed countries
can help developing
countries

1. Trade liberalisation
2. Debt relief
3. Financial and
technological
assistance
Trade Liberalization

Remove trade barriers to allow

developing countries easier access
to global markets.
This can boost economic growth
and reduce poverty in developing
nations.
Debt Relief
Debt -for-nature swap
Reduce or forgive debts of exchange of foreign
developing countries to debt held by an
organization for
free up resources for social larger quantity of
and environmental domestic debt that is
used to finance the
programs.Debt relief can preservation of
natural resources of
help these nations focus on debtirs country.
sustainable development
rather than repaying loans.
Financial and
Technological Assistance

Provide funding and advanced

technologies to help developing
countries adopt sustainable practices.
Examples include investments in
clean energy, efficient
infrastructure, and climate
adaptation projects.
What Developed
Countries Can Do for the
Global Environment
Developed countries, consuming over
70% of global resources, can help
improve the global environment by:
1. Reducing Emissions
2. Investing in Green Technologies
3. Changing Consumption Patterns
Reducing Emissions

Cut harmful emissions,

including greenhouse gases,
to mitigate climate change.
Investing in Green
Technologies
Conduct research and
development (R&D) to create
cleaner technologies and
pollution controls for both their
own use and to assist developing
countries.
Changing Consumption
Patterns
Adjust environmentally harmful
demand and imports to promote
sustainable global resource use
These efforts aim to reduce
environmental harm while setting a
sustainable example for the rest of
the world.
Thanks