March 4 ENV222 lecture notes.pdf

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School of Environment
Stephen Scharper

15) March 4 Current actions: Business, green Sawin, Janet L. and William R. Moomaw. “Chapter 4.An Enduring Energy Future.” In Worldwatch Institute, State of the World 2009: Into a Warming World. New York: W.W. Norton. pp. 130 – 150. 231-240. ▯ Lecture notes ▯ . Feb. 27 lecture was devoted to understanding factors which lead brown industries to improve their environmental performance and the factors which act as barriers to that improvement ▯ . this lecture is devoted to current role of green industries, in particular renewable energy (RE) ▯ Question: to what extent is the market role of green industries like RE bringing about improved environmental protection? Sawin and Moomaw (2009) p. 321 says there is a "transition already under way"; are they right? will it accelerate? if so, how much due to market action and how much due to government policy? ▯ Note: it is almost impossible to talk about operation of the market without also considering the law and policy system put in place by governments within which the market operates. This is because market and state are interdependent - each needs the other: . state needs market to generate tax revenue to support state operation; . market needs state to provide public goods of physical and legal infrastructure it cannot be provide itself, due to the Tragedy of the Commons collective-action problem. Because they are interdependent they operate in tandem, and as analysts we cannot understand either without looking at both. ▯ ▯ Basic Model: ▯ . Government (state) ▯ . ENGO . Brown firm - product .Green firm - product (civil society) (market) . Demand ▯ To understand the dynamic of the model we must understand, among other things, the concept of interest (see Feb. 4 lecture notes)defined as objective of the actor; includes both self-interest and contribution to collective interest; is both material and psychological ▯ Notes on the model: . brown and green products are often not completely distinct; we can easily distinguish between brown product of pesticide; and green product of solar energy ▯1 But is the electric car brown or green? Thus we need to think of a spectrum rather than distinct categories. ▯ . demand is also not easily defined: as previously discussed, it has psychological properties (eg style); and, since hard for buyer to know green properties of the product (for reason just given, and because seller will market the product as green - which points to the importance of labelling) ▯ ▯ 1. RE firm objective . profit maximization: tends to lead to environmental protection . increased efficiency: works in favour of environmental protection . legitimacy: starts with green legitimacy, but that is coming under attack ▯ 2. Nature of the RE firm . same as brown firm, Feb 27 notes . in particular, the distinction large and small is important, because tied directly to the conflict between the hard-path (centralized generation) and soft-path (decentralized) . eg, large RE firm = Samsung; small, decentralized = locally owned co-op ▯ ▯ 3. History of RE firm development . large-scale hydro-electricity, eg Niagara Falls; end of 19th c. . oil price increases of 1970s; RE unable to benefit due to cost differential . 1978Amory Lovins advocates "soft-path vision" for energy: . increased efficiency . switching from nuclear and fossil to renewable . decentralized generation, transmission and use . 1991 Germany Feed-in TariffAct for RE electricity generation . 2009 Ontario Green EnergyAct, provides Feed-in TariffAct (subsidy) ▯ Thus the transition to RE discussed by Sawin and Moomaw (2009) has been advocated by environmentalists since the 1970s, but only has started to come into being in the last ten years or so; why? 1) decrease in price differential between fossil-fuel and RE electricity generation, former became more expensive, latter cheaper 2) environmental concerns with fossil - smog, climate change 3) economic benefits coming with RE - jobs, economic growth from m
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