Saturday, October 26, 2013

Environmental Kuznets Curve

The greatest threat to biodiversity is habitat loss. In particular, let’s talk about forests. According to studies, forests have been growing in countries with a per capita income above $8,000. These studies can be explained by the environmental Kuznets curves.

                                Hypothetical Kuznets Curve

Late pre-industrial and industrial countries like El Salvador, Sierra Leone, Zimbabwe, North Korea, and Kenya have chopped trees far faster than the rate at which trees can grow back. None of these countries have per capita incomes above $5,000. These countries favor the marginal utility of consumption over the marginal utility of the environment. Countries like the United States, Denmark, and France all have forest growth and per capita incomes above $8,000. These countries favor the marginal utility of the environment over the marginal utility of consumption. A big factor affecting the environment is that countries switch from being industrial economies to service based economics.
I believe that economic growth benefits biodiversity, but there needs to be more than income growth. A few of the things that must be addressed are environmental taxes, environmental education, and stopping social inequality. If people internalize their external costs, then there would be monetary drawbacks to chopping forests and incentives to planting forests. This allows forests to grow. If people gain an education about the necessity of having a healthy environment, then this allows people to be activists and fight for the environment. As biodiversity is hard to quantify, knowledge is a key ingredient to fighting forest degradation by allowing people to see hidden costs of habitat destruction. Social equality has been very bad in North Korea, Zimbabwe, and Sierra Leone. This restricts the economy and thus propels environmental derogation as citizens make money by any means necessary. At the very least these three factors speed up the process of forest growth making woodland habitats available to contain a plethora of biodiversity.
--Forest Krueger

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