Briefly explain the most pressing environmental problems in Ethiopia

Question

Evaluate the environmental policy of Ethiopia in managing environmental problems
Discuss how inefficiency in resource allocation takes place in the presence of environmental externality
Explain factors that are responsible for market failures in environmental economics and remedial measures required to overcome it.
Explain how to mitigate the negative externalities that arises from leather factory production in Ethiopia.
Discuss the difference between strong and weak sustainable development
Explain the three pillars of sustainable development
Explain the service that economic system receives from environment.
Describe the main conditions that must be satisfied for static efficiency to take place.
Discuss the possible parameters that we use to measure the sock of non-renewable resources.
Define environmental pollution and its main responsible factors.
Explain the optimal level of pollution control.
What are the different types of pollution?
Describe the difference between contingent valuation method and contingent choice method.
Public goods are characterized by non-divisibility in consumption and non-excludability in consumption. Explain what it means when it is said non-divisibility in consumption and non-excludability in consumption.
Why underground water is non-renewable resource and surface is renewable resource? Justify

Answer 1

The most pressing environmental problems in Ethiopia include deforestation, soil erosion, water scarcity, and air pollution. Deforestation is a significant issue due to the high demand for timber and agricultural land, leading to loss of biodiversity and increased carbon emissions. Soil erosion is caused by unsustainable farming practices and deforestation, resulting in decreased agricultural productivity and food insecurity. Water scarcity is a result of population growth, climate change, and inefficient water management. Lastly, air pollution is mainly caused by household cooking and heating methods that rely on burning wood and other biomass, leading to respiratory diseases and environmental degradation.

The environmental policy of Ethiopia aims to address these problems through various measures. The government has implemented reforestation programs, such as the Green Legacy Initiative, to combat deforestation. In managing water scarcity, policies focus on improving water management practices and expanding water supply infrastructure. Efforts to address air pollution include promoting clean cooking technologies and regulating industrial emissions. While these policies show a commitment to environmental management, their effectiveness and implementation still face challenges due to limited resources and capacity.

Inefficiency in resource allocation occurs in the presence of environmental externality when the market price of goods or services does not include the full social and environmental costs associated with their production or consumption. This leads to overconsumption or overproduction of goods with negative externalities and underinvestment in goods with positive externalities. For example, a factory releasing pollutants into the air may not consider the health costs borne by individuals living nearby. As a result, the market may produce and consume more of these goods than is socially optimal.

Market failures in environmental economics can occur due to several factors. These include externalities, where costs or benefits are not reflected in market prices, public goods that are non-excludable and non-rivalrous, information asymmetry, lack of property rights, and time inconsistency. Remedial measures to overcome market failures include government regulation and intervention, such as imposing taxes or subsidies to internalize externalities, setting standards and limits for pollution, providing public goods, and establishing property rights and market-based mechanisms like cap-and-trade systems.

To mitigate the negative externalities arising from leather factory production in Ethiopia, several measures can be taken. The government can enforce stricter environmental regulations and standards for factory operations, ensuring the proper treatment and disposal of waste products. Additionally, implementing pollution taxes or charges can provide economic incentives for factories to reduce emissions and invest in cleaner production technologies. The promotion of sustainable and eco-friendly practices in the leather industry can also help mitigate negative externalities.

Strong sustainable development refers to the approach that puts equal importance on both economic development and environmental conservation. It emphasizes the need to address environmental issues as a priority and recognizes that the degradation of ecosystems can undermine long-term economic growth. On the other hand, weak sustainable development prioritizes economic growth first and attempts to address environmental issues within the limits of market mechanisms and technological advancements.

The three pillars of sustainable development are social, economic, and environmental. Social sustainability focuses on improving the quality of life for all individuals, promoting social equity and justice, and ensuring basic human rights. Economic sustainability aims to achieve long-term economic growth, reduce poverty, and promote economic stability and resilience. Environmental sustainability focuses on preserving and restoring ecosystems, reducing resource consumption, promoting renewable energy, and mitigating climate change.

The economic system receives several services from the environment, often referred to as ecosystem services. These include provisioning services (such as food, water, and raw materials), regulating services (such as climate regulation, water purification, and pest control), cultural services (such as recreation and aesthetics), and supporting services (such as nutrient cycling and soil formation). These services are essential for economic activities and human well-being, and their degradation can have significant economic and social impacts.

For static efficiency to take place, certain conditions must be satisfied. These include perfect competition, where there are many buyers and sellers with no market power; complete and perfect information, where all relevant information is accessible to all participants; absence of externalities, where the costs and benefits of production and consumption are internalized by market participants; and absence of public goods and natural monopolies, which can result in market failures.

The stock of non-renewable resources can be measured using parameters such as reserves, extraction rates, and depletion rates. Reserves refer to the known quantities of a non-renewable resource that can be extracted using current technologies and at current prices. Extraction rates measure the amount of resource extracted per unit of time, while depletion rates show the rate at which reserves are being depleted over time.

Environmental pollution refers to the introduction of harmful substances or pollutants into the environment, resulting in adverse effects on living organisms, ecosystems, and human health. The main responsible factors for pollution include industrial activities, transportation emissions, agricultural practices, improper waste management, and the burning of fossil fuels. Pollution can occur in various forms, including air pollution, water pollution, soil contamination, and noise pollution.

The optimal level of pollution control is when society achieves a balance between environmental protection and economic development. It involves minimizing pollution to a socially acceptable level while considering the costs and benefits of pollution control measures. The optimal level of pollution control depends on the trade-off between the costs of implementing pollution control technologies and the benefits of reducing pollution-related damages to the environment and human health.

There are several types of pollution, including air pollution (caused by emissions from industrial, transportation, and domestic activities), water pollution (resulting from the discharge of pollutants into water bodies), soil pollution (due to the release of chemicals and toxic substances into the soil), noise pollution (caused by excessive noise from various sources), and light pollution (resulting from excessive artificial lighting that disrupts ecosystems and affects human health).

The contingent valuation method and contingent choice method are both used to estimate the economic value of environmental goods or services. The contingent valuation method involves directly asking individuals about their willingness to pay or willingness to accept compensation for the provision or preservation of an environmental resource. The contingent choice method, on the other hand, presents individuals with different hypothetical choices and measures their preferences based on the choices they make. Both methods aim to reveal individuals' preferences and determine the economic value of non-market goods or services.

When a public good is said to be non-divisible in consumption, it means that one person's use or enjoyment of the good does not reduce its availability or utility for others. In other words, the consumption of a public good by one person does not diminish its availability for others to consume. Non-excludability in consumption means that it is impossible or very costly to exclude individuals from consuming or benefiting from the public good. This means that once a public good is provided, it is difficult to selectively exclude individuals from enjoying its benefits.

Underground water is considered a non-renewable resource because it replenishes very slowly compared to the rate at which it is being extracted. The rate of natural recharge of underground water sources is typically much lower than the rate of extraction, leading to depletion and the formation of permanent underground water voids. On the other hand, surface water is considered a renewable resource because it is replenished more quickly through precipitation, runoff, and other natural processes. Surface water sources, such as rivers and lakes, have a higher renewal rate compared to the rate at which they are consumed or used.