Lecture 2

Visions of the Future

Byeong-Hak Choe

bchoe@geneseo.edu

SUNY Geneseo

August 28, 2024

Visions of the Future

Introduction

Self-Extinction Premise

• Edward Gibbon on Rome’s Decline
  • Gibbon describes the contrast between Rome’s former glory and its ruin.
  • Scene from The History of the Decline and Fall of the Roman Empire where Poggius ascends the Capitoline Hill.
  • The grandeur of Rome, now overtaken by ruin and desolation.
  • Gibbon suggests Rome’s downfall was due to internal weaknesses, despite external pressures.
• Malthusian Theory
  • Thomas Malthus (1798) predicted population growth would exceed food supply, leading to starvation.
  • Malthus believed rising death rates would result from environmental constraints rather than innovation.
  • Historical examples support the idea that societies may contribute to their own destruction.

Introduction

A Tale of Two Cultures - 1. Mayan Civilization Collapse

• Vibrant society in Central America that experienced a collapse.
• Population growth exceeded the agricultural capacity of the land (maize was the main crop).
• Climate change led to a drying trend and prolonged droughts, causing food production to lag behind population growth.
• Resulted in high levels of infant and adolescent mortality, widespread malnutrition.
• The royal dynasty collapsed around AD 820-822.

Introduction

A Tale of Two Cultures - 2. Easter Island Collapse

• Known for its large statues and sparse vegetation.
• Rising population and heavy reliance on wood for housing, canoe building, and statue transportation led to deforestation.
• Deforestation caused soil erosion, declining soil productivity, and reduced food production.
• The social response to scarcity was conflict among factions and ultimately cannibalism.

Future Environmental Challenges

The Climate Change Challenge

• Sun drives Earth’s climate; greenhouse gases trap heat.

• Natural greenhouse effect is essential for life, but excess gases cause overheating.

Future Environmental Challenges

The Climate Change Challenge

• Global evidence shows the planet is warming, primarily due to human activities like fossil fuel burning.

• Warming impacts:

  • Increased heat affects human health.
  • Rising sea levels and stronger storms damage coastal areas.
  • Ecosystems struggle to adapt; some species may not survive.

• Check out the following webpages from NASA (Evidence, Causes, Effects)

• Addressing climate change requires global cooperation and strategic solutions; Economics offers tools for effective responses.

Future Environmental Challenges

The Water Accessibility Challenge

• Rising demand vs. limited supply is a critical issue, especially for water.

• 40% of the world’s population lives in areas with moderate-to-high water stress.

• By 2025, two-thirds of the global population may face water stress.

  • Groundwater in places like the U.S., Mexico, China, and India is being depleted faster than replenished.
  • Rivers like the Colorado and Yellow often run dry before reaching the sea; lakes like the Aral Sea have drastically shrunk.
  • Water contamination further limits safe water; nearly 1000 children die daily from preventable water-related diseases.

Future Environmental Challenges

Climate Change and Water Accessibility: The Linkage

• Climate change will worsen droughts, increasing water demand and reducing supply.

• Interdependence of climate change and water scarcity is crucial for effective policy design.

  • Importing water or building reservoirs can cause conflict and face geological risks (e.g., earthquakes, landslides).

• Ignoring their interaction could lead to inefficient and ineffective solutions.

Future Environmental Challenges

Climate Change and Water Accessibility: The Linkage

• Climate change will worsen water scarcity, creating significant economic and security challenges.
• Water scarcity will spread to new regions and intensify in already affected areas.
• Rainfall will become more variable and unpredictable, while warmer seas will lead to more severe floods and storm surges.
• Water availability in cities could drop by up to two-thirds by 2050.
• Adopting reforms and investments is challenging but necessary.
• The cost of inaction is far greater than the cost of implementing reforms.
• Proper policies can protect people and ecosystems from severe water-related shocks and adverse rainfall trends.

Future Environmental Challenges

The Water Accessibility Challenge

Future Environmental Challenges

The Just Transition Challenge

• Can policies ensure that vulnerable groups don’t bear disproportionate burdens during transitions?
• Climate impacts hit poor nations and people harder than wealthy ones.
• Benefits of transition (e.g., reduced climate damage) are clear, but what about the costs?
• Will the costs be fairly distributed or regressive?

Policy Context

• Solving issues like poverty, climate change, and biodiversity loss requires international cooperation.
• Policies must consider obligations to future generations.
• International cooperation is challenging, as global problems affect countries differently.
  • Low-lying countries face submersion, arid nations may experience desertification, while some may benefit from longer growing seasons.

Policy Context

• Unilateral environmental actions risk making businesses less competitive globally.
  • Industrialized countries with strict environmental policies may see gains in clean energy sectors.
  • However, some industries may face higher costs and lose market share due to stringent regulations.

Policy Context

• The market is resilient.
  • Prices can provide incentives not only for the wise resource use but also for promoting technological innovations.
• Yet, market incentives don’t always align with fair, sustainable outcomes.
  • e.g., over-harvesting fisheries, overuse of pesticide, coal-fired power plants.

How Will Societies Respond to the Future Challenge?

Positive Feedback Loops

• Positive feedback loops are those in which secondary effects tend to reinforce the basic trend.
  • e.g., Methane emissions increase with temperature, worsening climate change.
  • An estimated 60% of today’s methane emissions are the result of human activities. (Source: NASA)
  • First satellite, MethaneSAT, developed by Environmental Defense Fund, will monitor and quantify methane emissions over wide areas that other satellites can’t reach, identifying large emitters in unexpected locations.

How Will Societies Respond?

Negative Feedback Loops

• Negative feedback loops are self-limiting rather than self-reinforcing.
  • e.g., Gaia hypothesis suggests Earth has self-regulating systems.
  • Economic and political institutions must either intensify or limit environmental issues, ensuring fair treatment.

The Use of Economic Models

• Economics is the science of decision-making and how to create value through trade

• Economics provides a useful set of tools for anyone interested in understanding and/or modifying human behavior, particularly in the face of scarcity.

• How societies respond to challenges will depend largely on the behavior of humans acting individually or collectively.

• Economic analysis can reveal the resilience of markets through negative feedback loops and identify when and why markets fail.

  • This knowledge helps design incentives to harmonize economic and environmental interests when markets fail.

The Use of Models

• Models in economics simplify complex subjects, like the economy-environment relationship.
• Simplification highlights key concepts and relationships but can lead to inaccurate conclusions.
• Models are useful, but their results depend on their structure.
• Changing the model structure can change the conclusions.

The Use of Models

• People often rely on implicit models; in economics, models are explicit with clear assumptions.
• Economic models are tested by how well they explain actual behavior.
• Econometrics uses statistics to derive economic functions for testing policies or forecasting trends.

The Road Ahead

• Are societies on a self-destructive path?
• The answer depends on whether responses to scarcity create positive (worsening) or negative (improving) feedback loops.
• Environmental economics helps understand and solve environmental problems, offering paths to align goals with outcomes.