Disclaimer: The following is not an essay or any form of structured writing; it is rather a string of thoughts and spontaneous research on the economic aspect of the environment. This piece of writing does, however, aim to answer plus elaborate on question 2, which is about economic terms and how those economic environmental policies may in fact make this dream of ‘saving the environment’ a reality. After reading the below one must have noticed that the answering of “What is ecological overdraft?” is not present and the reason is that it has been answered previously on the same page.  ENJOY.

Economic Incentives on Polluters

To start off with, I found an excellent and inspiring definition of the term “Green Economics”;Green economics is the economics of the real world—the world of work, human needs, the Earth’s materials, and how they mesh together most harmoniously.  It is primarily about “use-value”, not “exchange-value” or money.  It is about quality, not quantity for the sake of it.  It is about regeneration—of individuals, communities and ecosystems—not about accumulation, of either money or material.  (

It’s amazing how “economical” and “ecological” are almost synonymous. If you save the energy in terms of using less, you also spend less. Then again there are the situations where the words cane be antonyms such as when using green technology can cost a fortune.

The usual economic incentives made in an attempt to save the earth are the “cap and trade” policy which has a government decide on a cost for an amount of Carbon and the government gives local companies a limit as to which they emit carbon dioxide into the air. If the company goes over this limit they have to pay a given amount. This is done to prevent companies from freely polluting the environment. This paragraph from the website “Wise Geek” explains Carbon Emissions Trading perfectly:

“Imagine there are two companies, company X and company Y, which must comply with the same emissions cap and carbon prices. Both companies must pay five dollars per unit of carbon output and may only emit up to ten units per month. Company X only emits eight units of carbon per month, giving it two extra credits, and company Y regularly emits twelve, meaning it produces two units more than it’s allowed. Company X can save, or bank, its two unused credits in case it goes over its allowance in the future, or it can sell its credits to a company that emits more carbon, like Company Y. Company Y can either buy these credits or it can reduce its carbon output by two units to comply with the cap.“ (

Some of the Economic Incentives Are for companies that pollute the environment:

  • effluent taxes, that are based on the content and quantity of a firm’s discharges into the air, water, or sewerage system;
  • user taxes that are charged for using a resource such as timber or for being provided with a service such as garbage collection;
  • product taxes, for example charges on packaging that are used to discourage disposal and encourage recycling;

 To analyze these taxes; a firm is taxed for the content and quantity of waste disposed into the environment. The firm is charged extra for using a certain resource for them to produce their product. Taxes on harmful packaging such as bubble wrap which doesn’t biodegrade. Taxes on products the firm makes that harm the environment and a reduction of taxes or price for products that help save the environment. This I think will truly make saving the environment a possibility. I don’t know why the world doesn’t operate this way. This is what Obama said: “I am among those senators who believe that carbon from human activities contributes to climate change, that it is an immediate threat and that we must immediately require emission reductions through a strong cap-and-trade system.” (

However the problem here is if a government does place incentives on companies, it basically means the country itself is going to slowly self destruct. For example country A has one company that produces fertilizers. Then in order for Country A to play its part in saving the environment it would most likely put an incentive on carbon emissions. Let’s also say that the company that produces fertilizers is taxed immensely for all the harm they do to their environment and they are taxed even more due to higher emissions of Carbon than the limit. Now, all these additional environmental costs the company has to pay are reflected upon on its product price, the fertilizer. If the price of the fertilizers goes up and fewer farmers are able to afford it, then the country goes poor due to low rates of growing vegetation and ranks down in the HDI. People will not be happy. Then the government is faced with a bigger issue than sustainable living, their faced with issues of dealing with poverty and Human Rights. This is probably what the politicians fear; the fear of being ranked poorly in the Human Development Index and accused by other countries for poor management of human rights. The fear of being an LEDC. It’s either temporary dependency on fossil fuels and living it up or being classified as an LEDC?

My personal solution to this problem is that the governments should still tax the companies for over-the-limit pollution but companies should not be able put the price of the tax on the price of their product. I say that the company should pay from its own profits and not try and put that burden of taxes on the consumer. In this way the consumer will still buy the product and the company will be forced to go green. It’s not like their no solution to this ‘climate change’ problem, companies are just being cheapskates. But let’s say a company really can’t solve their problem of overly polluting by refitting their equipment with ‘greener’ technology. In that case, I think the government should have a group or organization which deals with this kind of problems by funding greener technology. The money for the funding can come from the money collected from companies that overly pollute and are able to convert their technology to greener versions.

 There are so many solution out there in the world presented by experts to just people thinking ahead but the biggest question is are they feasible? Humanity has tried protesting, they’ve tried scientific approaches, and they’ve tried ignoring but the only solution that appeals to me is “wrenching changes in lifestyle”( through economic incentives. People will almost do anything to keep their money in their pockets, so in understanding this ‘passion’ for money we will have to threaten to take it away if they are going to be careless about the environment. It’s conditioned learning, if humans are careful and keep their carbon footprint small, they can keep their money. But if they dare to pollute, they lose their money and I believe over years of practice of this kind of policy, it will become habit and people will be ‘programmed’ to not pollute and waste.  

Money makes the world go round and no one has been able to change that since the day money was invented. It might be colored pieces of paper with faces on them, but oh boy does it work wonders!



Why is The Earth in Ecological Overdraft?

It’s simple. We’re using more resources for our sustainability than the earth can produce. In other words, we’re greedy parasites sucking the life out of Mother Earth. It is has been observed that the day in which that ecological overdraft has been reached is drawn back; this means that the day the humans use more resources from earth than it can produce in a year comes faster. This clearly shows the increasing rate of consumption of the parasite like creatures that inhabit planet Earth. Ecological overdraft is basically when we, the humans, go into debt except this is not debt of pieces of paper with faces on them; this is the stuff that we live on.

What do You Think Carbon Footprint Means?

Simply put, carbon footprint is persons, grou ps or country’s mark on the earth in terms of carbon dioxide emitted. In this modern-day, almost nothing efficient can be done without the emitting of carbon, somewhere somehow. The carbon released due to our actions is the mark we make. It is measured in tones. A small carbon footprint means that you engage in activities that emits the minimum carbon dioxide.   

Which of the Articles Interested You and Why?

The article about ecological overdraft and how we’re in the red interested me. I realize that it is out of date but however this happens every day. I actually learned quite a bit as well from the article, that’s why it appealed to me. The way in which it portrays China is also questionable; it portrays it as if China doesn’t “mean” to harm the environment. There’s also a point this article makes that I object to; “Second, a closer look at trade flows reveals that a large share of China’s rising emissions is due to the dependence of the rest of the world on exports from China.” That is a very weak defense made towards China. They export [simultaneously harming the environment due to Carbon emissions] because they want to make money and we happen to need the stuff the sell. From experience I know that most cheap plastic toys and plastic containers come from China. Go to a store and look around the toys section and 1 out of 3 items will be labeled “Made in China”. If they won’t produce, other countries will definitely find their own means and methods. China is just looking for money. To cover up the damage they cause to the environment due to the money-making process they say they’re just doing it because we need it. That’s preposterous!


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