Presented by: Lokesh Kumar Agrawal Pankaj K Bhaisare Satabdi Mohapatra

Background:
Economic growth is a primary policy goal of most governments There is a fundamental conflict between economic growth and

environmental protection
As the economy has grown, the environment has become increasingly

degraded
Economic growth is no longer improving peoples lives in the developed

world

Increase in the production and consumption of goods and services

Occurs when either population or per capita consumption increases

Typically measured using GDP

Total expenditure on all goods and services produced within a country

A relatively recent policy goal

GDP was developed by the Allies during WWII as a way to maximise

wartime production

The Global Economy, 12006 AD

7 6 Population Per Capita GDP 5 4 3 2 1 0 5000 7000 6000

Per Capita GDP (1990$)

Population (Billions)

Can this really continue???

4000 3000 2000 1000 0

200

400

600

800

1000

1200

1400

1600

1800

Year

2000


Resources Waste

Waste products
Products

The economy is a subsystem of the environment All of the inputs to the economy come from the environment, and all of the wastes produced by it return to the environment As the economy grows, we have to shovel in more resources and discharge more waste Since we live on a finite planet with limited resources, its not possible for the economy to grow forever

Can we decouple economic growth from resource use? Technological progress Switch from goods to services
GDP growth has overwhelmed any decoupling
250

The World
200

Index (1980=100)

GDP
150

Material Use

100

Material Intensity
50

0 1980 1985 1990 1995 2000 2005

Source: SERI (www.materialflows.net)

Study in Nature in 2009 Nine planetary boundaries that define the safe operating space for humanity on the planet Relate to earth-system processes:
1. 2. 3. 4. 5. 6. 7. 8. 9.

Climate change Biodiversity loss Nitrogen and phosphorous cycles Stratospheric ozone depletion Ocean acidification Global freshwater use Change in land use Atmospheric aerosol loading Transgressing one or more of the Chemical pollution planetary boundaries could lead to
catastrophic change at the continental to global scale.

Source: Rockstrom et al. 2009, Nature 461: 472-475.

GDP Total expenditure on all goods and services produced within a country

Genuine Progress Indicator (GPI) Same accounting framework as GDP, but

United States
$40,000 $35,000 $30,000 GPI per capita GDP per capita

Adds value of household and volunteer work Subtracts cost of crime, pollution, and family breakdown

2000 US$

$25,000 $20,000 $15,000 $10,000 $5,000 $0

1950

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

Growth

Degrowth

SSE

Carrying Capacity

Time

Ecological Footprint measures how much land and water area a human population requires to produce the resources it consumes and to absorb its wastes under prevailing technology. It measures the extent to which humanity is using nature's resources faster than they can regenerate Production and use of goods and services involve land use: have ecological footprints But today, humanity's Ecological Footprint is over 23% larger than what the planet can regenerate It now takes more than one year and two months for the Earth to regenerate what we use in a single year

Energy Land Fossil energy consumption requires Co2 sink Consumed Land Built environment Farm Land Food production Forest Land forest products

If one person travels 5 kilometers twice each workday: Bicycle: 122 sq meters Buses : 301 sq meters Cars: 1,442 sq meters

Agricultural Footprints

Open Field production of tomatoes takes up more land than greenhouse production But Greenhouse production has a much larger ecological footprint (10-20x) Energy Fertilizer Other inputs

Imagine New York City covered by a bubble like Biosphere II in Arizona Most people would die within a few days Cities depend on much greater amount of land, environment for vitality Now imagine how big that bubble would have to be for the city to be self-sustaining This is the ecological footprint of the city Actually 347,000 square miles
to support 20 million in U.S. lifestyle
size of Texas and Oklahoma combined.

http://antwrp.gsfc.nasa.gov/apod/ap970408.html

Holland population 15 million Density = 4.4 People per Hectare Consumption is less than in U.S. Still, Dutch people require 15x more land than is within their country for Food Forest Products Energy Use Therefore, the ecosystems that support Holland lie far beyond their national borders In U.S. each person uses about 4.5 hectares/person Worldwide average = 1.5 hectares/person Therefore if everybody were to adopt the U.S. consumptive style, we would need 3 planets

Iowa Population is 2,776,000

U.S. average footprint is 4.5 hectares/person

Iowans need 12.5 million hectares of average land to support themselves Iowa area is 14.5 million hectares Therefore we can support at least another 444,000 Americans

Inequity

We all compete for ecologically overloaded world

Excess consumption by affluent countries takes up ecological footprint that would be used by poorer nations

http://www.thesavvytraveller.com/agraphics/insights/geography/1general/p hotoessays/dalusio_menzel/material_world.jpg

The World
1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0

Global ecological footprint is greater than available biocapacity!

We are in a state of overshoot
Resources are being used faster

Number of Earths

than they can be regenerated

1960 1970 1980 1990 2000

Wastes

Ecological Footprint

Biocapacity

are being produced faster than they can be assimilated

Source: Global Footprint Network

Climate change the biggest market failure the world has ever seen?

It is mechanism to reduction of greenhouse gas emissions in a cost-effective and economically-efficient manner.

Similar system trialed in the USA - US acid rain program employed a sulfur emissions cap and trade system and successfully produced a 50 percent cut in emissions The scheme operates through the allocation and trade of CO2 emissions allowances One allowance represents one tonne of carbon dioxide equivalent. Long term goal - de-carbonization of country's economy

The USA has the highest per capita emissions of carbon but China and India and other Asian countries have huge populations putting increased pressure on carbon emissions

Market failure can occur with missing markets. In the past there has been no market to trade and enforce environmental property rights. Carbon trading seeks to create incentives to reduce pollution. A cap is set on the emissions allowed The cap creates the scarcity required for the market At the end of each year installations are required to ensure they have enough allowances to account for their installations actual emissions.

Businesses in the EU-ETS must implement carbon management strategies in the medium term Assets: If a carbon emitting business can under-use its initial allowance by better energy efficiency, it can sell its surplus on the market. Liabilities: If a business is faced by high costs to reduce its emissions, it must buy extra allowances The new carbon market should develop a price that reflects the cheapest ways of implementing emission cutbacks. As the market price of carbon emissions rises, so there is an incentive for businesses to invest in technologies that are more pollution efficient including carbon sequestration.

Reward efficiency e.g. those businesses that are pollution efficient Reward action e.g. capital investment in lower-carbon cleaner factories and production processes Reduce pollution without damaging the competitiveness of European businesses.