The Economy-Environment Interface 12/5/12 1:03 AM
Usually, natural resources are given prices and externalities are given a cost.
Geographers are used to dealing with the human-natural context.
If we are going to do more as geographers, how do we acknowledge the
human interaction with the environment?
Environment: All external conditions, abiotic and biotic that affect an
organism or group of organisms
How does nature become a commodity?
Conventional Economic Approaches
Natural realm as distinct, measurable and quantifiable (a commodity)
• Gold à rock into jewelry
Seek equilibrium price in markets through supply and demand
• Monopolies setting prices
• Subsidies can be added
• Taxes can be added
o Environmental taxes
Environmental economics: turning the environment into commodities and
setting the price
• Not part of traditional economic theory
• Added in around the 1970s
• It is very hard to put a price on certain things such as “a view”
• Created ways of determining prices by talking to people
Problems With this Approach (environmental economics)
Damage rarely incorporated into the price of the commodity
Techniques of this approach are severely limited à qualitative issues
Costing environmental degradation involves viewing nature as an object
• Part of the problem
Processes of Commodification
• A provider of inputs to an economy
• A receiver of outputs (waste and pollution)
Resources are socially created.
• Demand for a substance leads to a commodity with an assigned
value The environment is not socially created, but resources are.
• People are indirectly responsible for the environment.
• We control and manage resources though.
Resource: a naturally occurring substance that humans regard as useful or
• Are obtained from the biological and physical environment
• Are neither absolute nor constant
• Depend on human perception, attitudes and behaviours, new
technologies and prices
• Very economic perspective
Creating a Commodity
Technologies and science create a demand for a substance
• Uranium for use in nuclear power generation or medical treatments
Technologies exist that make a substance useful
• Sunlight for electricity
Economic context à oil prices rise
• Can be very expensive but if prices are high enough it becomes
To create a commodity, you must establish ownership.
Private, communal, state, open access
• Private: private land, family home
• Communal: farming communities, traditional societies, Northern
Canadian groups, ethnic groups
• State: Crown land, owned by the federal government, must go to
the government to get permission
• Open Access: oceans, atmosphere
When nature becomes a commodity a cost is incurred by the natural system
(rarely fully understood or counted)
Commodification of Environmental Degradation
• goal: protecting the environment from waste outputs, the effects of