The tradeoff between economic output and environmental protection
Posted 2023-07-28 20:15:43
0
238K
Key points
-
Depending on their income levels and political preferences, different countries are likely to make different choices about how to balance economic output and environmental protection.
-
All countries benefit from making a choice that is productively efficient—that is, a choice somewhere on the production possibility frontier rather than inside it.
The tradeoff between economic output and environmental protection
Unfortunately, it's not possible for a country to maximize both its environmental protection and its economic output. Each country must make a decision about how the two goals should be balanced—and how to achieve that balance.
Using a production possibility frontier to analyze economic output and environmental protection
One of the tools we can use to analyze the tradeoff between economic output and environmental protection is a production possibility frontier, or PPF, like the one below.
The PPF shows the opportunity cost of choosing either more environmental protection or more economic output. Notice that at the far left of the graph—at point PPstart text, P, end text—a country would be selecting a high level of economic output but very little environmental protection. At the other extreme—point TTstart text, T, end text—a country would be selecting a high level of environmental protection but little economic output.
Countries with low per capita gross domestic product, or GDP—such as China—tend to place a greater emphasis on economic output, which in turn helps to produce nutrition, shelter, health, education, and desirable consumer goods. Countries with higher income levels, where a greater share of people have access to the basic necessities of life, may be willing to place a relatively greater emphasis on environmental protection.
All choices represented by points on the PPF are productively efficient—they just represent different balances of environmental protection and economic output. A choice that is inside the PPF, however—like MMstart text, M, end text—is productively inefficient.
Economists tend to have milder opinions about the choice between PPstart text, P, end text, QQstart text, Q, end text, RRstart text, R, end text, SSstart text, S, end text and TTstart text, T, end text than environmentalists, because all of these points lie along the production possibility frontier and thus are productively efficient.
Economists are, however, are united in their belief that an inefficient choice such as MMstart text, M, end text is undesirable. Rather than choosing MMstart text, M, end text, a nation could achieve either greater economic output with the same environmental protection, as at point QQstart text, Q, end text, or greater environmental protection with the same level of output, as at point SSstart text, S, end text.
Command-and-control environmental laws sometimes involve a choice like MMstart text, M, end text, but market-oriented environmental tools offer a mechanism for providing either the same environmental protection at lower cost or providing a greater degree of environmental protection for the same cost.
Summary
-
Depending on their income levels and political preferences, different countries are likely to make different choices about how to balance economic output and environmental protection.
-
All countries benefit from making a choice that is productively efficient—that is, a choice somewhere on the production possibility frontier rather than inside it.
Zoeken
Categorieën
- Arts
- Business
- Computers
- Spellen
- Health
- Home
- Kids and Teens
- Money
- News
- Personal Development
- Recreation
- Regional
- Reference
- Science
- Shopping
- Society
- Sports
- Бизнес
- Деньги
- Дом
- Досуг
- Здоровье
- Игры
- Искусство
- Источники информации
- Компьютеры
- Личное развитие
- Наука
- Новости и СМИ
- Общество
- Покупки
- Спорт
- Страны и регионы
- World
Read More
What Are Media Relations? Building Strong Connections That Shape Public Perception
Introduction: Why Media Relations Matter More Than Ever
In a world overflowing with content and...
What Happens If I Don't Reach My Funding Goal?
Crowdfunding campaigns have become a popular way to raise money for a wide range of projects,...
Interpreting the aggregate demand/aggregate supply model
Key points
The aggregate demand/aggregate supply model is a model that...
How Do I Get Better at Public Speaking?
Public speaking is one of the most valuable life skills you can learn, no matter your age,...
What Mistakes Should I Avoid When Trying to Close a Sale?
Closing a sale is one of the most critical steps in the sales process, yet it’s also one of...
English
Russian
French
Spanish
Portuguese
Deutsch
Turkish
Italiano
Arabic
Romaian
Portuguese (Brazil)
Greek
