ENV ECONOMICS & POLICY Flashcards
(13 cards)
what is economics
study of the allocation of resources
- not just about money - applies anywhere constraints are faced, so that choices must be made
whats Environmental and natural resource economics
application of the principles of economics to the study of how environmental and natural resources are developed and managed
what two broad areas does env economics focus on
– Controlling pollution and environmental damage
– Sustaining renewable resources
what 2 factors does Environmental decision making involve
- Tangible factors: ones you can touch, buy and sell
* E.g. A house lost in a mudslide due to deforestation on the slope the house was on
* Relatively easy to put a monetary value on - Intangible factors: ones you cannot touch directly, but people value
* E.g. The beautiful forest that was on the slope before the landslide
* Harder to measure economically
whats the NATURAL CAPITAL
Public service functions -> Services ecosystems provide to humans and the environment
* E.g. wetlands: clean water
what is A commons
any resource owned publicly, with public assess for private uses e.g. Publicly owned lands
what does “The Tragedy of the Commons”
refer to Each user tries to maximize personal gain at detriment to all the users - “if I don’t get it someone else will”
reasons individuals tend to overexploit natural resources held in common
- recreation - overcrowding places like national parks
- low growth rate of the resource e.g. whales and whale oil
what is Externality
indirect cost
– An effect not normally accounted for in the cost-
revenue analysis of producers - ones that don’t show up in the price tag
– Not recognized as part of their costs and benefits
2 Issues of externalities and a possible solutions
- Need to get public to value clean air and other
environmental benefits as greater than zero
-solution: Quantitative evaluation of the tangible natural resources e.g. REDD+ ( An effort to create a financial value for the carbon stored in forests) - Determine who should bear the burden of these
environmental and ecological costs
-solution: – Include it in costs of production through taxation or fees
what is Carbon Tax
Tax based on greenhouse gas emissions (GHG)
generated from burning fuels - reduce carbon emissions
- impacts = use of different resources for electricity
asic issues we face in terms of the future
– We are so much richer and better off than our
ancestors that their sacrificing for us might have
been inappropriate
– Even if they had wanted to sacrifice, how would
they have known what sacrifices would be
important to us?
whats the Risk-Benefit Analysis
- The riskiness of a present action in terms of its
possible outcomes is weighed against the benefit, or value, of the action - Some behaviors are far riskier than others
- few generalizations we make on risk: how many affected, Novel risks appear to be less acceptable, People’s willingness to pay for reducing a risk varies with the activity associated with the risk
