INTRODUCTION TO ENVIRONMENTAL ECONOMICS

QUESTION

Introduction to Environmental Economics

Film Review Assignment

In “Poisoned Waters” (I hr, 53 minutes), Pulitzer Prize-winning journalist Hedrick Smith examines the growing hazards to human health and the ecosystem. The complete video clip is available at http://www.pbs.org/wgbh/pages/frontline/poisonedwaters/view/

Your assignment is to watch the video clip “Poisoned Waters” closely and write a review paper discussing concepts we are covering in the class that can be related to the context of this movie. The review paper should be in a typed write-up not more than 4 pages (double spaced with 12 font) size. To give you some directions, you can talk about Externality, Coase Theorem, Ecological vs. Neo-classical Vie of Sustainability, Costs and Benefits of Environmental Protection etc. and any other concepts that you can relate to its storyline.

ANSWER

Environmental Economics Concepts

Poisoned Waters is a documentary that brings to light the rampant pollution in two American waterways, Chesapeake Bay and Puget Sound. This pollution has been caused by the uncontrolled dumping of toxic industrial, agricultural and municipal runoff into the waterways, for 25 years. The documentary’s narrator, Hendrick Smith, displays images of aquatic pollution throughout the film. He is seen with an environmental activist on a chicken farm in Maryland. Behind the chicken sheds, large brown splotches of manure containing phosphorus and nitrogen compounds can be seen. Chicken waste is carried by rainwater into a stream. Smith even depicts how chicken waste dumped into a Richmond branch could find its way into drinking water in Baltimore.

Other pollution images such as frogs with up to six legs in the Potomac River and a water waste pipe dumping a brown liquid of waste into Puget Sound are portrayed. All these images are compiled to get to the main point of the film, which is, continued pollution which is harmful to aquatic life is as harmful to human beings. Drinking water that is unable to support aquatic or marine life is dangerous. US geologists report finding male amphibians with female sexual organs, such as female frogs with male genitals. These mutations are as a result of aquatic pollution affecting the amphibians and fish endocrine systems. The researchers are posed with totally troubling questions regarding the health safety of more than two million people who depend on the Washington Aqueduct for their drinking, cleaning and domestic use water. They disclose that the endocrine system of human beings is very similar to that of fish and other aquatic life, and therefore if the pollution was affecting fish, it was almost equally harmful to human beings.

In addition, Smith exposes rapid urbanization and overdevelopment as the main causes of environmental pollution because housing and commercial developments dispose of polluted water into rivers and other waterways, hence polluting community drinking-water systems. Reversing the effects of pollution would take a dynamic shift in the ways people use resources and disposal of waste.

The concept of externalities, costs that occur as a result of business decisions or activities but were not planned for while calculating the businesses costs (Henderson, 1997), in environmental economics comes out clearly in this documentary. The setting up of towns, industries, residential places and other urban constructions results in waterways pollution, even though this is not evident at first. The documentary shows a chicken farm that houses at least 40,000 chicken per shed, with huge piles of manure, rich in nitrogen and phosphorus, behind the sheds. Rainwater carries wastes from the chicken farm into a stream, leading to contamination of the waterways. This is a classic case of an externality, as the detriment to waterways is not factored in during the setting up of the chicken farm.

Firms or industrial premises causing pollution through effluent disposal or emissions do not consider costs that their pollution imposes on the community or other institutions such as the municipal authorities cleaning up the polluted areas (Henderson, 1997). This often results in environmental pollution becoming excessive, past the acceptable social levels. Smith talks to some local fishermen, enquiring on how fishing activities had changed over the years. The fishermen narrate how they had experienced a drop in catches for the past 25 years, forcing many of them to run out of business, as the rivers did not have adequate fish to catch anymore. This reveals how much the externality resulting from industrialization had affected the community.

Smith tries to illustrate how the cost of environmental protection is high, in the documentary. The best example is maybe the Duwamish River which flows through the industrial hub of Seattle and drains into the Puget Sound. Industries have continued to use toxic chemicals and dump their wastes into the Duwamish. It is shown in the documentary that a campaign to clean up the river is underway. However, the pollution is so far-gone that the clean-up costs are high and people are not willing to fund the project. This has left the efforts moving extremely slowly. The history of the American Clean Water Act is also given; basis for its institution, politics that have affected it over the years, and its successes and failures. The recent administration made the act voluntary, resulting in a shaky regulation of pollution.

The film also tells us of the first Earth Day, 1970, where about twenty million residents took to the street to demonstrate for clean water, clean air, and better environmental pollution restrictions. The people of today’s society are shown not to care about what was happening to their environment anymore. At Elliot Bay, people are enjoying themselves drinking wine while wearing white linen, just a few feet away from where a pipe was continuously raining filth into the waterway. Environmental pollution control directly affects industrialization and urbanization. Waste management costs extremely high, but that must be the cost industrialists, and the general public should be willing to incur, to protect the environmental resources.

Toxic wastes and compounds into water systems and the environment generally, affects ecological, environmental processes like the ecological water cycle, nitrogen cycle, and even the carbon cycle. These cycles are very important in maintaining a conducive healthy environment that is required to provide required resources for aquatic life survival, human sustenance, and industrialization (Islam, Tanaka, 2004). Environmental conservation is expensive. Nevertheless, companies and the community at large should not ignore it. Pollution ought to be brought down to a minimum. The chicken farm owners, for instance, fail to acknowledge the importance of environmental conservation and moral responsibility.

We can also observe the clash between the Neo-classical economists’ way of looking at the health of an economy, by the calculable growth of Gross Domestic Product with no focus on the effects of this growth on the environment, and the Ecological economists’ view that the purpose of an economy cannot simply be to maximize the value of goods and services that can be traded. Ecological economists believe that the economy’s purpose is to provide for the sustainable livelihood and well-being of the community (Stern, 1997). In this documentary, most people, industries, and farms are shown to view the environment under the Neo-classical economists’ way, only focusing on using environmental resources to produce their required goods, with the view of making a profit, without any attention to the environment’s health or sustainability.

Most industrial and urban forms of pollution affect public goods. Public goods can be defined as resources whose usage has no rivalry, as opposed to common goods, whose usage by an individual or entity make them inaccessible to other people. Waterways polluted in this documentary are an example of a public good. Care should be taken to preserve and protect public goods, as these have benefits to every member of the society. Lack of proper regulation is one of the largest causes of the pollution of waterways (Henderson, 1997). However, Smith implicates every individual of the society as a culprit, stating how we have spent many years coming up with chemicals such as pesticides and household cleaners, but never creating any relevant and effective technology for water purification. He even talks to an environmental scientist who discloses that their filters in the Potomac River only extract about a third of the total pollutants in the water. This shows a lot of negligence on our part, leaving our natural resources vulnerable to pollution.

Imposition of environmental pollution regulations to control the disposal of industrial wastes, tradable emission permits or pollution quotas, taxes on pollution and effluent, and having well-defined property rights, as in Coase theorem, can be used to control pollution.

References

The Frontline documentary, Poisoned Waters, narrated by Hendrick Smith.

Henderson, V. (1997). Externalities and industrial development. Journal of urban economics, 42(3), 449-470.

Islam, M. S., & Tanaka, M. (2004). Impacts of pollution on coastal and marine ecosystems including coastal and marine fisheries and approach for management: a review and synthesis. Marine pollution bulletin, 48(7), 624-649.

Stern, D. I. (1997). Limits to substitution and irreversibility in production and consumption: a neoclassical interpretation of ecological economics. Ecological Economics, 21(3), 197-215.