No one denies the global environmental risks that we are suffering from in a way or another, such as climate change, the ozone hole, and the melting of snow and others. Many analysts consider that the prevailing economic systems are the reason for all of this.
Hence the relationship between the environment and economy, especially the capitalist systems that are always looking for material profit regardless of any future consequences or disasters that affect humanity.
Some civilized countries are concerned with the green economy and the blue economy that is compatible with the environment and the idea of sustainable development. The blue economy deals with rivers, seas, and various marine resources such as gas and oil, and the generation of electrical energy from water and others.
The green economy focuses on clean uses in various industries, renewable solar energy, and wind energy, so the capitalist system is primarily responsible for most environmental disasters because it lives and feeds on many industries that are destructive to the climate, the environment, and people.
1. The relationship between environment and economy
Reconciling economy and environmental protection is not an easy task. Up to a point, the two concerns may appear contradictory. On one side, several economic activities have a negative environmental impact. They use natural resources in the production process and contribute to reducing natural capital (directly through the use of exhaustible resources, indirectly by overexploitation of resources, renewable). On the other side, environmental protection goals can negatively impact economic development by constraining businesses and consumers' behavior through regulations or fiscal measures.
2. Environment and economy; Natural resources absorbed by economic activity
National, regional, or local, all economies hold the marks of their natural environment; climate, relief, or soil quality. All other things that are equal in production or consumption in tropical regions differ from that in temperate regions. However, these influences are too spread for economic analysis to include them in production or consumption functions.
The Groningen gas fields, which are at the origin of the phenomenon that economists have baptized Dutch disease, show the negative impact on the economic sector of a strong increase in income related to the natural resources exploitation, which was the case in the Netherlands.
It is different with the extraction of resources from the biosphere in the form of easily identifiable physical flows. Some relate to so-called renewable resources; fish from rivers, seas, and oceans, forest timber, fresh water from rivers or lakes. The others concern non-renewable resources because they are extracted from an earth stockpile, ferrous, non-ferrous and rare earth; fossil energy sources in the form of mineral coal, conventional and unconventional crude oil, natural gas.
3. Environment and economy; Discharges from economic activity in natural environments
Connected to their natural environment by their withdrawals, economies are also linked by what they reject there in the form of liquid, solid, or gaseous waste. Some of them are absorbed and regenerated naturally, whereas others cannot be for reasons of quality or quantity. Therefore, they are probably to threaten the quality of the natural environment, with collective damages to living resources, health, the economy, the composition of the lithosphere, hydrosphere, and atmosphere. The urban pollution of the latter by smoke from factories is well known, even if its cost in terms of degradation of buildings and public health is not always easy to estimate.
Till the end of the 20th century, some national economies could feel relatively safe from the nuisances linked to this local pollution because of their productive structures. This is no longer the case since releases with a global impact have been revealed; a vortex of waste from the Pacific Ocean, CFC gas then methylene chloride threatening the ozone layer. Above the poles, greenhouse gas (GHG) emission, a source of global warming, long-lived radioactive waste.
To varying degrees, these releases affect economies through their impacts on the environment. Some increase the production costs of companies obliged to eliminate them or pay taxes to the organizations that do so. Others, more worrying, could, in time, completely paralyze economic activity due to the disturbance of the balance of certain ecosystems.
4. Environment and economy; The economic impacts of environmental pollution
Environmental pollution leads to several damages that impede the process of economic development, through:
- Low productivity of economically exploited natural systems, such as agriculture and fishing.
- The high costs of using the natural environment, such as the high costs of drinking water treatment.
- The high costs of spending in the field of reducing and remedying damage resulting from pollution in order to protect the environment.
- The direct and indirect costs resulting from the loss of raw materials and energy resources.
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Originally published on Live Positively.