Environmental Econ: Crash Course Economics #22

Adriene: Welcome to Crash Course Economics. I’m Adriene Hill Jacob: And I’m Jacob Clifford. Economics is about choices, and how we use our scarce resources. It’s not just about producing and consuming, it can also be about conserving. Adriene: Maybe counterintuitively, economics has a lot to add to discussions of how we can balance our desire for prosperity and growth, with the need to protect our natural resources. Today we're going to look at environmental economics and think about how economics can help us keep our planet livable. [Theme Music] Pollution is going to happen, it’s a by-product of human existence and there is no way that we can get rid of it all. In fact, one of the ways we know about earliest the societies is by looking at their trash heap, something archaeologists call middens, because it sounds better than “dumps.” But the fact that humans produce all kinds of waste doesn’t mean that we have to embrace islands of trash floating in the oceans, a layer of smog over industrial cities, and toxic chemicals in our rivers. For sake of simplicity though, we’re going to focus on one type of pollution: carbon dioxide emissions. They’re one of the primary greenhouse gases.

These greenhouse gases basically blanket the earth and are causing climate change. CO2 levels are the highest they've been for millions years which is why environmentalists consider it a “planetary emergency.” There's a lot of effort going into how to remove greenhouse gases from the atmosphere, how to make cities more resilient to climate change, but in the interest of time we’re going to focus on efforts to reduce the amount of new pollutants getting spewed into our atmosphere. Jacob: The economic solution is pretty simple. Step one, identify the sources of the most air pollution. Done. We know exactly what it is. It’s factories that burn fossil fuels for energy, industries that use oil and coal to produce things, and vehicles with internal combustion engines. Step two, decrease the supply of these technologies and products or decrease the demand for them. That’s it, it’s simple.

But, the implementation of these policies gets complicated. Let’s look at decreasing supply. As we mentioned in the last video, one of the biggest problems with having countries independently enforce environmental regulations is the Tragedy of the Commons. No one owns the atmosphere, so there is very little incentive for countries to keep it clean and switch to expensive green technologies if no one else is going to. It’s not like there is some global environmental police punishing countries for polluting. While a country like Trinidad and Tobago has a huge carbon output per capita, its small population means it’s only producing a small fraction of global CO2. The other option is to decrease the demand for fossil fuels, possibly by finding alternate green energy sources. But we’re already very reliant on fossil fuels, and markets have made the production of those fuels very cheap. So, any new type of energy will have a hard time beating the established system.

So we can either wait patiently for new technologies to develop and get cheaper, or we can speed up the process by manipulating markets with government subsidies, taxes, and regulations. Adriene: In the case of pollution, there are long-term side effects, like climate change, that consumers often don’t take into account when they buy products. Remember negative externalities? When the full cost of a product doesn’t line up with the costs that manufacturers or consumers pay? Pollution represents a market failure — a situation where markets fail to produce the amount that society wants. To address this, some economists argue that government intervention is not only justified, but essential. There are all kinds of different ways intervention can happen — all of them meant to encourage producers and consumers to choose to pollute less.

One solution is for the government to come out and set very specific rules about how much specific industries can pollute. Forget markets. You're gonna follow our pollution rules. Another way governments encourage people to pollute less is by providing price incentives. Those incentives can encourage individuals to make choices that are better for the environment. The government could add taxes to gasoline purchases, or, on the other hand, provide subsidies for people who drive electric cars. Governments can also create permit markets — basically setting a limit on how much firms can pollute, and allowing those firms to buy and sell pollution permits. You’ve probably heard these called “cap and trade”. Proponents of cap and trade argue that it can successfully limit emissions, without creating hard and fast rules that might hinder economic growth.

And, governments can subsidize the development of a specific technology or industry—in an effort to make that technology more competitive with the alternatives. A country might help support the development of solar or wind energy. As of 2014, around 10% of the energy consumed in the United States came from renewable sources, which is pretty much in line with the global average. Current predictions are that by 2040 15% of the world energy consumption will come from renewable sources. But, alternative energy sources, for the most part, just aren’t cheap enough yet, so the majority of our energy is likely to continue to come from non-renewable sources, at least for now. Jacob: We don’t have the time to sit back and wait for new technologies to get cheaper, and there's no guarantee that the technologies that the government picks will be cost effective. Perhaps the solution is not to get rid of fossil fuels, but instead be more efficient with those fuels. But that has drawbacks, too. Some energy economists argue that the expected gains from energy saving technologies, are offset by something called the rebound effect. Let’s go to the Thought Bubble.

Adriene: Let’s say Hank uses a gallon of gas to drive to work everyday. Then, partially to help the planet but mostly to help his wallet, he buys a new fuel efficient car that only takes half a gallon of gas for the same commute. He saves money and there's less pollution. It is a win-win. But the rebound effect says that the benefits of energy efficiency might be reduced as people change their behavior. With the money he saves, Hank might start driving more than he normally would or he might go on a vacation in Hawaii. That leads to more consumption and possibly even more emissions. Also, if greater fuel-efficiency makes driving less expensive it might encourage more people to buy cars and increase the overall use of gasoline. And even if people didn't increase their driving, the new fuel efficiency could decrease the demand for gas, making fossil fuels cheaper and more readily available for other uses. The possibility of the rebound effect doesn’t mean we shouldn’t invest in energy saving technologies. It just means that we have to keep in mind how consumers will behave. It’s also the reason why it's important to have economists involved in the discussion of environmental policy.

The tools of economics can help analyze the incentives and figure out what might work best. Thanks Thought Bubble. Okay, so we’ve identified another problem. But before you get so angry that you kick over a barrel of oil and light it on fire, keep in mind that there is hope. Most countries are actively trying to address the problem of greenhouse gases. The international community has been trying for decades to work together to protect the environment with varying success. There are international treaties that commit countries to reducing greenhouse gas emissions. UN negotiations are underway to create a new climate change agreement — that could be adopted in December 2015. Private companies and governments are also funding research into green technology. In the U.S. the American Recovery and Reinvestment Act of 2009 allocated billions to fund renewable energy.

China is also vowing to clean things up, and, in fact, leads the world in renewable energy investment. So, now that most countries recognize there is a problem, the hope is that they’ll figure out a way, or more likely a lot of ways, to start addressing it. Environmental economists say that is not just governments and producers that need to change, it’s also consumers. Conserving and consuming more thoughtfully likely need to be a part of our daily lives if we want to protect the environment. But just bringing our reusable grocery bags to the store isn’t going to save the planet, even if it says it on the bag. Bigger and more costly interventions like improving insulation and changing thermostats might have more impact, but we need to recognize individual action alone isn’t going to be enough. Industries, governments, and individuals; we’re in this together. Thanks for watching, we’ll see you next week.

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Japan in the Heian Period and Cultural History: Crash Course World History

Hi, I’m John Green, this is Crash Course World History and today we’re going to return to medieval times. Mr. Green? Mr. Green? Finally, we get to watch jousting and eat with our hands and root for the Blue Knight. Yeah, No, Me from the Past, for starters, Medieval Times doesn’t closely reflect Europe in medieval times. And furthermore, we’re not going to be talking about Europe in medieval times, although we will be talking about kings and courts and aristocratic intrigue, but we’re gonna be talking about all those things in Japan. So discussions of Japanese history often focus on the Tokugawa period because it’s got ninja and samurai, but much of the foundation of Japanese culture dates to the Heian period between 782 and 1167 CE. And when I say Japanese culture, I do mean culture, because the achievements of the Heian period were primarily artistic, especially in literature.

So for most of this episode, we’ll be looking at cultural history as opposed to like economic or political history. As a novelist, and also a consumer of culture, I’m a big fan of cultural history. What I love about it is that it embraces the human imagination. I mean, you can’t just make up economic theories. Just kidding, you can. Anyway, for our purposes, Heian culture is the high culture of the upper-upper-class aristocracy, and obviously focusing on this tiny sliver of the upper class leaves out the experience of most Japanese people. But we know a lot more about the elite than we know about everyone else because it was the elite who were doing all of the writing things down and they were writing about the people they found the most interesting – themselves. In fact one of the reasons we know a great deal about the Heian aristocracy is because of Japan’s first great novel: The Tale of the Genji, by Lady Murasaki Shikibu. Now the historian James Murdoch called the Heian aristocracy “An ever-pullulating brood of greedy, needy, frivolous dilletanti – as often as not foully licentious, utterly effeminate, incapable of any worthy achievement”.

But when you boil all the unnecessarily fancy words out of that quote, that sounds like people I’m very interested in learning about. In fact, I love some fallicentuousness. So one of the first things we learn from texts about the Heian aristocracy is that the aristocracy was dominated by a craze for things Chinese. Now Chinese visitors to Japan thought the country was backwards and out of the way and uncivilized. But one of the reasons the Japanese seemed backwards to Chinese visitors is that the Japanese in the 10th century admired Tang China, which had flourished a couple of hundred years earlier. But there was also the fact that the Japanese blended Chinese ideas, especially Chinese Buddhism, with native traditions. In fact one of the most interesting aspects of Heian Japan was the overall attitude of the aristocracy, which was characterized by a love of color, and grandeur, and ceremony, and ritual, that was tinged with some Buddhist-inspired ideas.

You know, it’s sort of like how everyone in Canada wears powdered wigs and knee breeches to look like 18th century England. And one of the central ideas in Buddhism is that everything beautiful, and also everything not beautiful, is fleeting. Like historian Ivan Morris wrote that in the literature of the time, there was a quote “feeling that the familiar order of things will soon come to an end.” Which by the way is always an appropriate feeling. So the center of aristocratic court life was the capital, Heian Jyo, which during the Heian golden age may have had a populations as high as 100,000 people, making it much larger than most European cities at the time. It may have been a glorious capital but we don’t really know because most of the city was destroyed by earthquakes, or possibly fires, or possibly wars, or just the desire for new construction. We’re not sure. We also know that the Heian aristocracy was rigidly hierarchical, with society divided into about 30 grades based on one’s birth. The top 4 grades were reserved for princes, and the top 3, known as the Kugyō, received all the most important privileges, including governmental posts and revenues from special rice land.

These people in the highest ranks could send their children to university, wear ceremonial dress, they were given lighter punishments when they committed crimes. Can you imagine a world in which rich people systemically receive lighter sentences for crimes committed than poor people? These rules were so detailed that they even determined what type of fan you could hold. The top 3 ranks got to hold 25-fold fans. But when The Tale of the Genji was written, this rank system, like all those ranks, applied to less than 1/10th of 1% of the total population, so we’re really talking about the elites. As Ivan Morris put it: “Members of the upper class are almost all related to each other. They are totally uninterested in everyone outside their charmed circle and exceedingly sensitive in judging the precise social level of each person who does belong. In Murasaki’s milieu, to determine a person’s milieu was no simple diversion, but a matter of overriding importance.” Now that description reminds me a lot of my high school experience.

Aristocrats dominated the government, which over time became more and more ceremonial and ritualistic. In fact by the 10th century, much government work was carried out at night and consisted almost entirely of ceremonies. The nice thing about doing boring ceremonial work at night though: there was a lot of wine. So yeah, that doesn’t make for like, excellent government efficiency. Heian Japan’s economy was not much better than its governance. There was very little trade and attempted land reform, which was supposed to grant every citizen a parcel of public domain land, totally failed. Meanwhile, aristocrats accumulated vast agricultural land holdings, and by the 10th century court nobles were largely supported by these tax-free estates called manors. Now interestingly, the nobles didn’t technically own the land outright, as they did in much of Europe. Instead they owned the rights to income from the land and then those rights could be transferred to their heirs, so it was similar to ownership, but it wasn’t quite ownership. Also different from Europe: upper-class Japanese women could hold the rights to a manor, and thus have a rather impressive degree of economic power.

And that matters a lot because women played a key role in the flourishing of Heian literary culture that makes this period of history so interesting to study in the first place. Like over all this inefficient corrupt cronyism of Japan’s government and economy definitely weakened this state. But it also provided time and money for the aristocracy to make beautiful and interesting things. Let’s go to the Thought Bubble. Heian aristocrats were expected to feel melancholy over the transience of existence. “In Murasaki’s time,” according to Ivan Morris “periodical protestations of melancholy and gloom were essential for people who regarded themselves as sensitive,” and sensitivity especially to art was the hallmark of aristocratic breeding. The aristocratic gentleman is exemplified by prince Genji himself: quote “With his gentle nature, his sensitivity and his wide range of artistic skills, who represented the ideal of the age and who set the tone for the social and cultural life of the good people” Buddhism was very influential on the aristocrats aesthetic ideal that beauty must be cultivated because it is so impermanent.

This quote from the tale of Genji illustrates this focus on impermanence: “‘Like the waterfowl that play there on the lake, I too am floating along the surface of a transient world’ I could not help comparing them with myself. For they too appeared to be enjoying themselves in the most carefree fashion; yet their lives must be full of sorrow.” Stan, are you sure that’s from the tale of Genji? I think I’ve seen that quote attributed to me on Tumblr. But we don’t only know about the emotional state of the aristocracy, we also know about their pastimes. We refer to nobles as the leisure class for a reason after all, they spent a lot of time playing games, and engaging in contests. Poetry contests were popular, as were board games, like Go, and much of their time was taken up with ceremonies and rituals. Here is an example from the court calendar: “18th day: Bowman’s Wager, the new year’s celebrations are concluded by an archery contest which is held in his majesties presence between officers of the inner and middle palace guards.

This is followed by a banquet during which court dances are performed and prizes awarded to the winning side. Members of the losing side are forced to drink the cup of defeat.” Thanks, Thought Bubble. I’d like to make an announcement here at Crash Course from now on whenever we refer to anyone losing anything we will say that they were forced to drink from the cup of defeat. So you know other than pure Game of Thrones style drama, this highly ritualized very insular social order of the elites of the elites of the elites isn’t usually the kind of stuff we’d study at Crash Course. But first, thinking about the lives of the Heian aristocracy tells us something about the lives of the rich and powerful generally. Like obviously they had to increasingly separate themselves from each other to feel more and more wealthy and powerful.

Which progressively led to them being more and more separated from, you know, the vast, vast majority of people living in Japan. But also they produced and consumed cultural artifacts that came to define the style of the age but also have continued to shape culture. Heian aristocracy and the documents that describe it tell us a lot about women, who as we’ve seen are often left out of historical narratives. The Heian period, at least culturally, was dominated by women, particularly Murasaki Shikibu and Sei Shōnagon. So in some ways at least, unlike almost everything we’ve studied, our view of the period is dominated by women’s perspectives, although it is the perspective of the most privileged women. And what we see is consistent with a lot of upper-class mores: these women are obsessed with their looks, and especially with their clothes which were cumbersome and heavy. They were expected to wear their hair very long, preferably reaching to the ground. They had to powder their faces and blacken their teeth and they lived the circumscribed lives typical of upper-class women throughout the world.

Although there were some legal protections that they enjoyed: like we talked about how they could have income from property. Laws also protected them from physical violence, specifically prohibiting a husband from beating his wife, which might not sound like that big of a deal but compared to women’s lives in Europe, that was a big improvement. And upper-class women in Heian Japan were all literate and educated, although their education was limited to the types of cultural skills that would make them attractive to men: poetry, music, calligraphy, maybe some literature. Disciplines like history and law and philosophy were mostly off limits. And that brings me to something I want to talk about: all of these privileges: from the heavy, cumbersome clothes that make it difficult to move to the kinds of education women could have or the kinds of limited legal protections they could have, all of that is evidence of a patriarchy. So we see through these women’s stories the way that they were able to express themselves and their philosophies and the way that they lived in the world.

So women like Murasaki Shikibu lived constrained, cloistered lives, but of course there were opportunities available to them that weren’t available to men. And that’s what’s so exciting about being able to read their narratives. We just don’t have many equivalents to that in Europe at the time. That noted, these women, like their male counterparts, spent most of their lives indoors, and communicated mostly by intermediaries or letters. Women couldn’t show themselves to men or make conversation with them. But there was a great deal of interest and intrigue around love and romance, not least because Heian gentlemen were expected to be polygamous and also to engage in extramarital affairs. But just because sexual relations were often divorced from marriage and love affairs were common doesn’t mean that they lacked emotional consequences.

In the stories you read about Heian Japan everybody is always worried that they’re going to like, fall out of favor with their lover or their husband or their whatever. It’s so exciting! To read about, I mean, I’m sure if you’re living inside of it it would make you very anxious. Also when courtship and marriage had political dimensions, as they did in the highest noble ranks, women were often in danger of being displaced by a more advantageous match. And we know from the stories that all of this combined into pangs of jealousy and fear of being abandoned and then pain when you actually were abandoned. And those kinds of stories, I’m sure I don’t have to tell you, have a kind of universality about them. The last thing I want to say here is that power works differently when you’re not in power, right? Like if you’re a student in a high school classroom the teacher has the power, but you have some power.

And the most interesting thing about the stories from the Heian aristocracy is the ways that women used the power that they did have to bring about change in their own lives and in their communities. So by looking at history through the lens of literature we get a very different perspective than if we were to focus on government documents, or archaeology, or descriptions of war. This helps us to try to develop a sense of how people at the time felt, although we’re only dealing with a very limited group of people, obviously. The cultural achievements of the Heian Period, described and exemplified by The Tale of Genji, were considerable, especially when compared to what Europeans were accomplishing at the time. And it’s another reminder that we need to be careful when we talk about the 9th and 10th centuries as the Dark Ages.

It’s also interesting that the Heian Period in Japan wasn’t particularly successful politically or economically, but that it did lead to great cultural achievements. And almost all of the literary achievements were made by women, which as Morris points out is “a rare, if not unique, phenomenon in cultural history.” For Heian Japan the historical record was written primarily by women. And while The Tale of Genji doesn’t discuss politics or economics the way that we usually imagine them, and while it describes a world that leaves out 99% of Japanese people during the period, it has a lot to tell us about the way that at least some people felt and lived, which is more than can be said for a lot of history books. And that’s a type of history that most of us can relate to more than stuff with generals and kings in it. For instance when I look at the history of my own life I find that generals and kings have played a very minor role. Jealously on the other hand: not insignificant. Thanks for watching. I’ll see you next week.

Crash Course is filmed here in the Chad & Stacey Emigholz Studio in Indianapolis. Thank you for watching and as we say in my hometown: don’t forget to be awesome..