LESSON 5 – CLASSROOM ACTIVITIES AND SIMULATIONS:

TRASH

Content Standards:

Standard 1:  Students will understand that:  Productive resources are limited.  Therefore, people cannot have all the goods and services they want; as a result, they must choose some things and give up others. Students will be able to use this knowledge to:  Identify what they gain and what they give up when they make choices.

• Choices involve trading off the expected value of one opportunity against the expected value of its best alternative.
• The choices people make have both present and future consequences.
• The evaluation of choices and opportunity costs is subjective; such evaluations differ across individuals and societies.
• Choices made by individuals, firms, or government officials often have long-run unintended consequences that can partially or entirely offset the initial effects of their decisions

Standard 5:  Students will understand that:  Voluntary exchange occurs only when all participating parties expect to gain.  This is true for trade among individuals or organizations within a nation, and among individuals or organizations in different nations. Students will be able to use this knowledge to:  Negotiate exchanges and identify the gains to themselves and others.  Compare the benefits and costs of policies that alter trade barriers between nations, such as tariffs and quotas. Benchmarks, Grade 8:  At the completion of grade 8, students will know

• When people buy something, they value it more than whatever it costs them; when people sell something, they value it less than the payment they receive.

Standard 16:  Students will understand that:  There is an economic role for government to play in a market economy whenever the benefits of a government policy outweigh its costs. Governments often provide for national defense, address environmental concerns, define and protect property rights, and attempt to make markets more competitive.  Most government policies also redistribute income. Students will be able to use this knowledge to:  Identify and evaluate the benefits and costs of alternative public policies, and assess who enjoys the benefits and who bears the costs.

• An important role of government in the economy is to define, establish, and enforce property rights. A property right to a good or service includes the right to exclude others from using the good or service and the right to transfer the ownership or use of the resource to others.
• Property rights provide incentives for the owners of resources to weigh the value of present uses against the value of conserving the resources for future use.

Time

One – two class periods

Materials

• Visual #1:  “Trash – It Has to Go Somewhere”
• Student handout – “Bayview Trash Problem Fact Sheet” – 1 per student
• Student handout – Role cards (cut apart) – different roles for each group – 2 or 3 copies of role card per group
• Student handout – Interest Group Opportunity Cost Analysis – 1 per student
• (optional)  Overhead transparency of “Opportunity Cost Analysis” grid

Procedures

1. Review with students the definition of opportunity cost:  the benefits of the next-best alternative.
2. Explain that students will be participating in a opportunity cost analysis exercise to identify the opportunity costs of a decision in which environmental quality is an issue in trade between two states in the United States.  The discussion after the activity will focus on comparing and contrasting this situation to those involving international trade.
3. Display the overhead transparency: “Trash – It Has to Go Somewhere.” (Visual #1)
4. Distribute the student handout and go through the instructions to make sure that students understand the task.  (If you have not used the opportunity cost analysis grid with students in the past, you may want to display the grid on the overhead.  Have the class take on the role of the Bayview residents and fill in the boxes with their responses as you guide them through the thinking process.)
5. Divide students equally into small discussion groups and assign a Bayview role to each group.  Allow time to complete the grid and the presentation.  Circulate through the room to check students’ grids to make sure they are on the right track before they get too involved in their presentations.
6. Group presentations.
   • Direct group reporter to read aloud the group’s role description before beginning the presentation.
   • Direct members of the class to pretend that they are on the city council and will have to vote on the Bayview trash issue.
7. Individual Assignment:  As a member of the Bayview City Council, which option will you support?  Identify the trade-offs you’re willing to accept and defend your decision by explaining your analysis of the cost / benefit trade-offs.
8. Debriefing Questions:
   • How did you vote and why?
   • Which solution provides greatest environmental quality?  Shipping the garbage to Flatland County in the next state.
   • In which solution are the Bayview residents most able to escape some of the costs of their own garbage? The incineration option, because it won’t be possible to prevent any air pollution that is generated from blowing to other areas.
   • Which solution promises to generate the most benefits for the greatest number of people? The Flatland County Landfill option, which not only rids Bayview of its garbage, but does so in the most environmentally friendly way and also generates income for the residents of Flatland. 
   • Should Bayview be allowed to pollute – that is, to reduce the environmental quality – of Flatland County?  While this is clearly a matter of opinion, insist that students support their opinions in terms of the trade-off between benefits and costs.  Help students to see 2 salient points:  1) the trash must go somewhere and 2) the Flatlanders chose to accept lower environmental quality.  One pointed way to bring home the trade-off is to turn the question around and ask if it’s ok for Bayview to deny Flatland the chance to move out of poverty.
   • In this exchange, or trade, between Bayview and Flatland County, what is being bought and sold?  And who is the seller and who is the buyer?  Flatland is selling, or exporting to Bayview the use of one of its natural resources, the land used for the disposal of trash.  Bayview is purchasing, or importing, the use of that natural resource.  In this case the resource is the land that is well suited to use as a landfill, but it could be the natural resource of timber, clean water, iron ore, or oil.
   • Economists point out that if an exchange is voluntary, it creates wealth.  The Bayview – Flatland exchange is voluntary, so it must create wealth.  That is, both sides benefit.  Should the residents of Flatland County be allowed to accept lower environmental quality in return for higher income?  Again, there is no single acceptable answer.  Help students to understand that decisions about resources always involve trade-offs of environmental quality and the benefits of whatever is produced by using the environment.  Also help them to see that questions of property rights are involved here, too.  How should people’s property rights be defined or limited when environmental quality is at stake?
9. Explain to students that this exercise is based on a real situation.  Bayview is the city of Seattle, and Flatland is Gilliam County, Oregon. Gilliam County lobbied actively for Seattle’s trash and was awarded a contract in late 1989 that went into effect in April of 1991.  Each day at 4:00 p.m. a fifty-car container train leaves Seattle to make the 340-mile trip to Gilliam County, Oregon. Each year more than 475,000 tons of municipal solid waste is hauled.
   • Suppose that instead of being in a neighboring state, the Flatland Landfill were in Mexico or Honduras or another landscape inhabited by very poor people and/or where environmental regulations are less strict than in the United States.  Would that make a difference in your decision about whether or not people should be able to “export” a portion of their environmental quality?  And is it acceptable to, in effect, “import” a portion of another country’s environmental quality by sending them municipal waste or some other form of pollution?  Explain. Student answers will vary.  Point out to students that the question of who controls and can decide about the use of resources is a key part of the debate over the impact of international trade and the environment.  Once the property rights are clear it is the issue of opportunity cost that is the primary criterion in determining what will be traded.  If the lowest opportunity cost use of a county’s natural resources is to absorb pollution in exchange for money then that is what they will trade.  Much of the debate on the use of resources comes when people other than the property right holders feel it should be used in another way.
     • (Optional)  Unlike the protestors at WTO meetings, many thoughtful environmental groups are addressing this problem in a way that recognizes the costs to “Flatlanders” of maintaining the environmental quality of the resources they own and control.  See the Nature Conservancy’s 2001 Annual Report for examples of shifting the costs away from indigenous people by helping them to develop and sustain eco-agriculture and eco-tourism as an alternative to destruction of rain forests.  Private donations by members fund programs the Nature Conservancy runs in cooperation with foreign governments.
     • How is the issue of logging the Amazon or the clearing of Bolivian jungles for growing coffee similar to and different from the Bayview trash problem?  Accept a variety of answers.  Differences might include that the trash problem is harder to solve because eliminating trash is hardly realistic, whereas eliminating the demand for products such as hard woods, beef, or coffee that are produced from the forests and land is possible.  However, it’s important to help students see that the similarities are stronger than the differences. Both involve voluntary exchanges. They include the trade-off of increased income for use of a resource. In both cases there are people who are not involved in the specific exchange who place a value on the resource that’s being used or destroyed.  Both scenarios also involve poorer people willingly using their resource to satisfy the demands of richer people.