The Historical Self Extintion Premise
There are some historical examples stating that what happened to dinasours, may occur to us human
too. Many society extintions across history where caused by human problems between society and
nature.
The Roman Empire Author Edward Gibbon states that there where internal reasons of debate
within society that ended up on the extinction of the hole population
Thomas Malthus Humans have an erge to reproduce that can cause population growth to
exceed the lands potential to supply sufficient food resulting in starvation and death
Mayan Civilization (AD 400) There was a huge population growth that began to produce
environmental constrains, especially agricultural constrains on the land (Maize ecosystem
damadge). That ended on the civilization collapse around AD 820
o The capacity of the local productive land was exceeded, hence farmers started farming on more
fragile land, destructing the current ecosystem (climate, land, dryness, temperatures, etc.). Full
production failed to keep up with the current population growth.
Easter Island Rising population heavily reliant on wood for housing and transportation. This
ended up on soil erosion from the forests, declining soil productivity and diminishing food supply.
o Kind of more advanced civilization, but nowbody knows the exact cause of their extinction, as
being an island, the only evidence there is humans existed are the volcanic shaped rocks.
o These population solution to starvation and food shortages was an actual war between the
survivors, where people killed each other to obtain food and eventually turned into
cannibalism.
Environmental Challenges
Population Bomb: The starting problem to all environmental issues. Population geometrical
growth on a planet with finite resources is unsustainable, it will eventually explote in itself.
o Pollutinon, overpopulation, unsustainable structures and not enough housing, pressure on
natural and human resources, pressure on food and land supply.
o Common instruments for resolvement: Taxation, policies on children, infertilization, etc.
Climate Change: Greenhouse effect, Greenhouse gas and human activities, climate change and
moral dimension and international coordination, Carbon Neutrality
o Is the inmediate consequence of the population bomb
Malthusian Catastrophe by Malthus 1978
It is a “Pesimistic Model” stating that there is a universal tendency for population, unless cheked by
limited food supply, to grow exponentially. Because of the diminishing returns of land, the food supply
will tend to grow arithmetically.
History Malthus began observation of Benjamin Franklin, where in amercian colonies resources
where abundant, population tended to double every 25 years
Mathematical Model Where (Y) would be the total population in year (n), (X) initial population
and (%) the percentage growth.
o Graphically = food demand growth lineal and a concave line with diminishing returns
representing Food Supply. Before the equilibrium point, population will grow doubling, but
once beyond, it will tend to die.
, Exponential Arithmetic
Y = X∗¿ Y=X+ ( %n∗1000 )
Arguments to Malthusian Global population has risen 6 times since Malthus wrote his essay in
1798, and we still haven’t reached the optimum population point. Why?
o Malthusian System is too naïve, it only includes labor, excluding other important factors
dependant of population growth as (1) capital, (2) technology
Other Basic Pessimist Models That state population growth is exponential and bad for us
o “Limits to Growth and Beyond the Limits”, Meadows (1972, 1992) Computational models
that project future population
o State that all of factors are fixed, except for population growth. Hence, as long as population
growth is exponential, it will eventually suprass the fixed factors
o Main factors = Oil, coal, gas, natural resources
¿Are pessimistic models validated by reality?
Historical Validations Evidence such as fluctuations in prices of natural resources
o It all started with the sharp rise in the price of oil (1973), But, prices of oil and fixed natural
resources seem to highly fluctuate through history, and principally due to external factors +
overall prices have fallen since studies where originally published
o Fish stocks, biodiversity and forests and environmental problems, such as global warming, have
paid a role in favor of these models
, Problems with the Limits to Growth Model:
o No role for technological change or economic change inclusion. Both of these bring lots of
advantages to the world
o No substitution between resources (Ej.: natural resources as coal can be dried out, but solar or
other sources of energy do exist)
o Fixed amount of resources with exponential growth in use
o Do not take in mind renewable resources
The Basic Optimistic Model
Julian Simon and Herman Kahn: “The Resourceful Earth: Global 2000”
Instead of modelations, they have made predictions about the future of the world
They forecast that population growth will eventually slow down (yes), that technology would
overcome resource constrains (yes), transition to technologies such as solar energy (yes) and that
food production would continue to grow in its vision of the future (yes)
The Road Ahead
Nor pessimistic nor optimistic really, but states that we should take more into our business policies that
will successfully deal with the climate change issues
Focus on the role of the political system in controlling these problems, Government intervention
when needed, economic and political institutions should respond to the uncertainty in reasonable
ways (and not make the uncertainty become a paralyzing force) and work together to eradicate
poverty and social injustice whle respecting obligations to future generations
The Human – Environment Relationship
Environment as an Asset We see the environment as an asset that provides the economy with
resources and acts as a receptable for the economy’s waste
Closed System A system where there are no inputs and no outputs of energy and matter from
outside the system. An environment, as defined by the 1 and 2 lay of thermodynamics, is a closed
system
o 1st Law = Energy and matter can neither be created or destroyed
o 2nd Law = The amount of energy not available for wark increases (entropy law)
Open System A system that imports or exports energy or matter from outside in order to work
Positive Economics Approach Describing something, what is, what whas and what will be. Just
creating facts and finding them with no use
Normative Economics Appoach Attempting to answer what ought to be through reaserch that
can create actual decisions
, Efficency Using an environmental asset in such way as to maximize the net benefits to society
o Static efficency: To maximize on a certain and for a specific period of time. Determine an
efficent or optimal allocation in a single period of tiem
No worries for the future population of future problems
Ex.: Defining oil as a commodity for the next year. You make a graph with oil as a demand
curve and extraccting as supply curve, both in their marginals quantities.
o Dynamic efficency: To create an efficency over time, durable and changing through the years and
environments. Benefits and costs may occur in different time periods
Ex.: Building a dam now to that the next generations have energy
o Examples of Efficency criterias: Benefit-cost analysis, optimal extraction of a depletable
resources, optimal abatement of pollution, optimal amount of clean water, optimal amount of
recycling
Sustaintability Making sure that future generations are no worse off than the current generation
Discounting and Present Value
Discounting is the amount of money that you might have now and what you would receive if you put it
into the bank or invested it
Discounting implies a preference to consume more now and less in the future
o It is linked to the concept of dinamyc efficiency
STEP BY STEP EN HOJA APARTE (1)
o Increase in (r) Would lower the Marginal benefit curve from the second period, saying Q2
would be less on the second period and would want to consume more today
o Decrease in (r) Pushes the consumption towards an equal allocation between the present and
the future. But, you will never be able to consume more in the future than today, that is your
base.
Optimal efficient prices The optimal efficient price can be given by plugging the optimal
quantities per period into the inverse demand function (the originals, not adapted to r)
o Marginal Use of Cost = P* - MC = Rent (R)
o R2 = R1 * (1 + r) The rent rises at the rate of interest and the present value of the rent in
period 2 is equal to the rent in period 1
X 1 =X 0∗¿
Simple
Discounting Xt
X 0= ¿¿
rt
X 1 =X 0∗e
Continuos
Discounting −rt
X 0=X t∗e
R1=P1 −MC1
Net Benefit Where R is the “rent” or “royalty” for a period showing the marginal net benefit,
MC the marginal cost and P the demand curve.
There are some historical examples stating that what happened to dinasours, may occur to us human
too. Many society extintions across history where caused by human problems between society and
nature.
The Roman Empire Author Edward Gibbon states that there where internal reasons of debate
within society that ended up on the extinction of the hole population
Thomas Malthus Humans have an erge to reproduce that can cause population growth to
exceed the lands potential to supply sufficient food resulting in starvation and death
Mayan Civilization (AD 400) There was a huge population growth that began to produce
environmental constrains, especially agricultural constrains on the land (Maize ecosystem
damadge). That ended on the civilization collapse around AD 820
o The capacity of the local productive land was exceeded, hence farmers started farming on more
fragile land, destructing the current ecosystem (climate, land, dryness, temperatures, etc.). Full
production failed to keep up with the current population growth.
Easter Island Rising population heavily reliant on wood for housing and transportation. This
ended up on soil erosion from the forests, declining soil productivity and diminishing food supply.
o Kind of more advanced civilization, but nowbody knows the exact cause of their extinction, as
being an island, the only evidence there is humans existed are the volcanic shaped rocks.
o These population solution to starvation and food shortages was an actual war between the
survivors, where people killed each other to obtain food and eventually turned into
cannibalism.
Environmental Challenges
Population Bomb: The starting problem to all environmental issues. Population geometrical
growth on a planet with finite resources is unsustainable, it will eventually explote in itself.
o Pollutinon, overpopulation, unsustainable structures and not enough housing, pressure on
natural and human resources, pressure on food and land supply.
o Common instruments for resolvement: Taxation, policies on children, infertilization, etc.
Climate Change: Greenhouse effect, Greenhouse gas and human activities, climate change and
moral dimension and international coordination, Carbon Neutrality
o Is the inmediate consequence of the population bomb
Malthusian Catastrophe by Malthus 1978
It is a “Pesimistic Model” stating that there is a universal tendency for population, unless cheked by
limited food supply, to grow exponentially. Because of the diminishing returns of land, the food supply
will tend to grow arithmetically.
History Malthus began observation of Benjamin Franklin, where in amercian colonies resources
where abundant, population tended to double every 25 years
Mathematical Model Where (Y) would be the total population in year (n), (X) initial population
and (%) the percentage growth.
o Graphically = food demand growth lineal and a concave line with diminishing returns
representing Food Supply. Before the equilibrium point, population will grow doubling, but
once beyond, it will tend to die.
, Exponential Arithmetic
Y = X∗¿ Y=X+ ( %n∗1000 )
Arguments to Malthusian Global population has risen 6 times since Malthus wrote his essay in
1798, and we still haven’t reached the optimum population point. Why?
o Malthusian System is too naïve, it only includes labor, excluding other important factors
dependant of population growth as (1) capital, (2) technology
Other Basic Pessimist Models That state population growth is exponential and bad for us
o “Limits to Growth and Beyond the Limits”, Meadows (1972, 1992) Computational models
that project future population
o State that all of factors are fixed, except for population growth. Hence, as long as population
growth is exponential, it will eventually suprass the fixed factors
o Main factors = Oil, coal, gas, natural resources
¿Are pessimistic models validated by reality?
Historical Validations Evidence such as fluctuations in prices of natural resources
o It all started with the sharp rise in the price of oil (1973), But, prices of oil and fixed natural
resources seem to highly fluctuate through history, and principally due to external factors +
overall prices have fallen since studies where originally published
o Fish stocks, biodiversity and forests and environmental problems, such as global warming, have
paid a role in favor of these models
, Problems with the Limits to Growth Model:
o No role for technological change or economic change inclusion. Both of these bring lots of
advantages to the world
o No substitution between resources (Ej.: natural resources as coal can be dried out, but solar or
other sources of energy do exist)
o Fixed amount of resources with exponential growth in use
o Do not take in mind renewable resources
The Basic Optimistic Model
Julian Simon and Herman Kahn: “The Resourceful Earth: Global 2000”
Instead of modelations, they have made predictions about the future of the world
They forecast that population growth will eventually slow down (yes), that technology would
overcome resource constrains (yes), transition to technologies such as solar energy (yes) and that
food production would continue to grow in its vision of the future (yes)
The Road Ahead
Nor pessimistic nor optimistic really, but states that we should take more into our business policies that
will successfully deal with the climate change issues
Focus on the role of the political system in controlling these problems, Government intervention
when needed, economic and political institutions should respond to the uncertainty in reasonable
ways (and not make the uncertainty become a paralyzing force) and work together to eradicate
poverty and social injustice whle respecting obligations to future generations
The Human – Environment Relationship
Environment as an Asset We see the environment as an asset that provides the economy with
resources and acts as a receptable for the economy’s waste
Closed System A system where there are no inputs and no outputs of energy and matter from
outside the system. An environment, as defined by the 1 and 2 lay of thermodynamics, is a closed
system
o 1st Law = Energy and matter can neither be created or destroyed
o 2nd Law = The amount of energy not available for wark increases (entropy law)
Open System A system that imports or exports energy or matter from outside in order to work
Positive Economics Approach Describing something, what is, what whas and what will be. Just
creating facts and finding them with no use
Normative Economics Appoach Attempting to answer what ought to be through reaserch that
can create actual decisions
, Efficency Using an environmental asset in such way as to maximize the net benefits to society
o Static efficency: To maximize on a certain and for a specific period of time. Determine an
efficent or optimal allocation in a single period of tiem
No worries for the future population of future problems
Ex.: Defining oil as a commodity for the next year. You make a graph with oil as a demand
curve and extraccting as supply curve, both in their marginals quantities.
o Dynamic efficency: To create an efficency over time, durable and changing through the years and
environments. Benefits and costs may occur in different time periods
Ex.: Building a dam now to that the next generations have energy
o Examples of Efficency criterias: Benefit-cost analysis, optimal extraction of a depletable
resources, optimal abatement of pollution, optimal amount of clean water, optimal amount of
recycling
Sustaintability Making sure that future generations are no worse off than the current generation
Discounting and Present Value
Discounting is the amount of money that you might have now and what you would receive if you put it
into the bank or invested it
Discounting implies a preference to consume more now and less in the future
o It is linked to the concept of dinamyc efficiency
STEP BY STEP EN HOJA APARTE (1)
o Increase in (r) Would lower the Marginal benefit curve from the second period, saying Q2
would be less on the second period and would want to consume more today
o Decrease in (r) Pushes the consumption towards an equal allocation between the present and
the future. But, you will never be able to consume more in the future than today, that is your
base.
Optimal efficient prices The optimal efficient price can be given by plugging the optimal
quantities per period into the inverse demand function (the originals, not adapted to r)
o Marginal Use of Cost = P* - MC = Rent (R)
o R2 = R1 * (1 + r) The rent rises at the rate of interest and the present value of the rent in
period 2 is equal to the rent in period 1
X 1 =X 0∗¿
Simple
Discounting Xt
X 0= ¿¿
rt
X 1 =X 0∗e
Continuos
Discounting −rt
X 0=X t∗e
R1=P1 −MC1
Net Benefit Where R is the “rent” or “royalty” for a period showing the marginal net benefit,
MC the marginal cost and P the demand curve.
