Economics and politics are closely interlinked. You can’t change the economy of a country without the politics to push certain policies. Meanwhile, in politics it is virtually impossible to do anything without funding, revenue, and other inputs into the economic system. Throughout the years, there have been many influential and powerful economic/political moves made in the United States relating to the environment. Whether it was to dismantle certain green policies or to support them, the two have worked alongside each other to shape the United States. This paper analyzes how politics has had the power to dismantle and destroy certain green economic practices.
Politics can feed the controversy over the sustainability of economic growth. The way we see the environment today is mainly the product of how large corporations and how fossil fuel companies want us to see it – high-throughput economy. The definition of a “high-throughput economy” is an economy that boosts economic growth by using and increasing the use of matter and energy sources to produce more goods and services. The product of this economy usually involves a large input from matter and energy sources into wastes, pollution, and low-quality heat, thus then their flow into planetary sinks (Miller 632). Political institutions only feed this mindset by providing many unsustainable companies support in the form of subsidies. Furthermore, fossil fuel industries tell a narrative of how a shift to renewable energy will take away jobs and hurt the economy, when that could not be further from the truth. However, this mode of thinking can transition into something far more sustainable and prosperous. For instance, an unsustainable economy means that economic growth will soon deplete and degrade various irreplaceable forms of natural capital, something human economic systems currently depend on (Miller 633). This only means the economy will inevitably crash without natural resources and services as its inputs. An economy will not crash, provide jobs, and will no longer be dependent on finite material once there is funding in systems like renewable energy, sustainable farming and agriculture, etc. This can be achieved through the help of the political system, it is just a matter of politics transitioning and ending the controversy of sustainable economic growth.
Secondly, politics can also change the way we value the environment. The way politics values the environment currently is through the form of GDP, and maybe also GPI. However, none of the two incorporate the value of ecosystem services. For instance, the economic values of ecosystem services provided by forest, oceans, or rivers are not included in the market prices of goods (fish, timber, etc). Meanwhile, GPI is the sum of GDP and the value of beneficial transactions that meet basic needs, but not including environmental costs (Miller 2018, 640). This seems quite odd when we know how the way we form political policies is by using economic analysis in the form of GDP and cost-benefit analysis. Without the incorporation of environmental value and environmental indicators, we prevent monitoring the overall effects of human activities on human health, on the environment, and the planet’s natural capital (Miller 2018, 640). This ignores a substantial portion of what the United States economy runs on. For instance, a study has found that ecosystems services provide a range of $16-$54 trillion dollars worth of service annually (Costanza et al. 1997, 259). Therefore, it is important to note and recognize the portion that ecosystem services provide and contribute to human welfare on the planet. By recognizing this impact, politics can start evaluating the economy and policies by incorporating “nonuse values” into analyses. Non-use values can be quantified in the form of a resource’s existence value, aesthetic value, or option value (Miller 2018, 635). Non-use values can be put in practice in a cost-benefit analysis. As stated by Miller, the best way to prevent error and abuses in a cost benefit analysis is by: stating all assumptions used, include estimates of ecosystem services, estimate short and long term benefits and costs of all population groups, and compare the costs and benefits with alternative courses of action (Miller 2018, 637). Implementing this form of economic analysis can not only be beneficial for the economy in preventing market failures, but also beneficial for the way the public values the environment.
Politics can change the way we deal and regulate with environmental problems. There are many available tools the economy can use to solve certain environmental problems, it just depends on politics to push it through. These economic tools include full-cost pricing. Full cost pricing includes the undisclosed “hidden costs” of a product or service that directly or indirectly harms the environment and public health (Miller 635). If these costs were properly marked, the products would either be too high for the consumer and incentivize for the environmentally friendly product. Asides from full-cost pricing, green taxes can also be functional. A per unit basis of the amount of pollution and hazardous material emitted from an industry can be taxed, thus changing the market to discourage use of fossil fuels, nitrogen fertilizer, water, and other resources in order to maximize benefit (Miller 640). Lastly, another interesting tool is the case of microlending. It has already been used in Bangladesh, thus proving its effectiveness to include third world countries. The Grameen Bank set up microloans at low interest rates for impoverished people so they can start small businesses, plant crops, buy irrigation pumps, buy bicycles, etc (Miller 645). By doing so, it has helped reduce the poverty rate from 74% to 40% (Miller 645). The reduction of poverty has let alone encouraged more sustainable lifestyle choices, now that less people are burdened by such economic hardship. Overall, politics has the power through the use of tools, such as those listed, to manipulate the environment to be more sustainable and improve lifestyle conditions.
In conclusion, it is understood politics and policy takes a long time to process, therefore a lot of green initiatives cannot be passed without majority support. Nonetheless, these political policies set forth are vital for the continuation and sustainability of the planet. Especially for the United States because we are one of the leading emitters across the World. Politics has the power to move the economy of the United States and vice versa. However, the public united is what runs politics and the economy, thus the true foundation of the United States. It is up to us to make sure certain policies are passed and which corporations should provide certain goods and services.
Q: How impactful can the discount rate be for the environment?
Works Cited
Miller, G. Tyler, and Scott Spoolman. Living in the Environment. 19th ed., Cengage Learning, 2018.
Word Count: 1013
Environmental Studies 