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Problem Based Learning

Externalities and Non-Renewable Resources: Can the market be relied upon to deliver the solution?

This Problem Based Learning (PBL) exercise focuses on the issue of non-renewable resources and externalities in production. There is conflicting evidence about just how much damage the remorseless progress of production and economic growth is imposing on the Earth's natural resources and arguments about the potential methods to tackle this damage.

A recent report from the Millennium Ecosystem Assessment suggested that the human race is using up resources at an alarming rate and are destroying many others. Can 1,300 experts from 95 countries be wrong and if they are not what can we do to help reverse this trend?

Our Guide for Educators provides advice on how to use this resource with both HE and FE students.

Learning Objectives:

At the end of the PBL exercise, students should understand and have covered:

• The meaning of the terms 'non-renewable' and 'renewable' resource
• The meaning of the term 'environmental degradation'
• The meaning of the term 'externalities' and an ability to explain external costs and benefits using graphical and written means
• The principles of welfare economics including consumer surplus and producer surplus
• The effects of economic growth - both positive and negative
• The commonly suggested solutions for reducing negative externalities:
  • Market methods
    • Taxation
    • Tradable and non tradable permits
  • Regulation
  • Legislation and international agreements
  • Recycling
  • Investment in renewable resources
  • Extension of property rights
  • The difficulties of enforcing such solutions

Resources:

• The Problem: Externalities and Non-Renewable Resources: Can the market be relied upon to deliver the solution?
• References for Investigation: Externalities and Non-Renewable Resources