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Green Economics

When everyday people consider the economics of environmental projects, they tend to look at those costs that are most obvious—the extra cost of buying organic produce or the purchase of solar panels for the home and the annual savings on the home’s electricity bill.

However, the economic issues of environmental responsibility are far more complex.

“That’s looking at the economics of environmentalism from a certain and very narrow perspective,” explained Darwin Hall, a Cal State Long Beach professor of economics and co-director of CSULB’s Environmental Science and Policy Program who specializes in the area of the economics of environmental issues. “There are hidden costs that don’t show up on an electric utility bill. They are not deliberate. They are incidental to what we do, but these hidden costs impact the wider community.”

Hall points out that in California’s San Joaquin Valley, air pollution is killing people and children’s health is at risk. Looking at the situation, he said, there is a tremendous economic benefit to avoiding that damage, such as reducing health care costs. He believes the state can get double and even triple dividends by “going green”—changing the behaviors of those contributing so much to this air pollution.

“What economics brings to the (environmentalism) table is the fact there are quantifiable consequences to not cleaning up, and we can translate many of those quantifiable consequences into dollars that are not taken into account by individual utility bills, for example,” Hall noted. “We also can show up to a certain point that there is a net economic benefit to society of reducing the amount that we pollute.”

Hall admits that part of the problem with getting people to act now is the fact that “dealing with the consequences” is so far into the future. “There is a great deal of uncertainty as to when something is going to happen as a result of all of this pollution, for example,” he explained. “The precautionary principle would argue that we should be careful about really major changes that have an uncertain probability, and I say uncertain probability, because we really don’t know.”

One thing Hall is certain of, however, is that it would be better for present and future generations if action were taken now rather than later.

“We (environmental economists) can identify circumstances where eventually we will be forced to reduce the amount of pollution we produce as a nation in order to avoid dire consequences,” Hall said. “Still, we haven’t decided as a country to embark on a different path to change what we are currently doing. We’re talking about it seriously, but we haven’t made that decision.

“At some point, we have to change what we are doing,” he continued. “So, the real questions become ‘when do we finally decide to do that’ and ‘do we wait until it is too late?’”

Green economics

Exploring Environmental Science and Policy

Increasing recognition of environmental issues is leading to the need for trained experts, so Cal State Long Beach created the Environmental Science and Policy degree program in 2004, coordinated by the Colleges of Liberal Arts, and Natural Sciences and Mathematics.

Co-directed by economics Professor Darwin Hall and geological sciences Professor Stan Finney, the cross-disciplinary program offers B.S. and B.A. degrees and a minor. Moreover, faculty and students are putting their expertise to work on real-world issues.

“There are 530 mayors of cities across the country who’ve signed the mayors’ climate protection agreement, and this is an agreement for cities to reduce greenhouse gas emissions,” Hall said. “Last summer, the provost awarded a summer research award to a student in environmental science and policy to serve as an intern to the city of Laguna Beach to help identify actions that they could take to meet their obligations under that mayors’ agreement, which Laguna Beach’s mayor had signed and the city council has ratified.

“The city of Laguna Beach is moving forward on the recommendations of this report and is in the process of sorting through which recommendations will go through to the city council. That is one concrete example of how our campus is helping to inform policy choices in the wider community that will help us go green.”

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