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Ensc > Environmental Economics Lecture 3 > Flashcards

Environmental Economics Lecture 3 Flashcards

1
Q

What is economics?

A

Social science concerned with the production, distribution and consumption of goods and services

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2
Q

What are the goals of economics?

A

Study how choices are made to allocate resources to satisfy wants and needs

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3
Q

How is economics utilitarian?

A

Goods and services have value that can be converted to currency

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4
Q

What is the rational actor model?

A

Assumes all individuals spend limited resources to maximize individual utilities

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5
Q

What is an ideal economy?

A

Resources are allocated efficiently

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6
Q

What is market failure?

A

Situation where the supply and demand of goods and services are unbalanced

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7
Q

What are sources?

A

Part of the environment from which materials move

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8
Q

What are sinks?

A

part of the environment that receives input of materials

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9
Q

What do economies depend on?

A

Natural capital for sources of raw materials and sinks for waste products

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10
Q

What are the primary causes of market failures that lead to environmental problems?

A

Externalities and inefficiencies

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11
Q

What are externalities?

A

When producer does not pay for full cost of production

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12
Q

What are inefficiencies?

A

Scarce resources are not used well

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13
Q

What are human activities doing?

A
  1. Transforming land surfaces
  2. Altering biogeochemical cycles
  3. Changing hydrology
  4. Modifying ecosystems and species
  5. Altering climate and biological diversity
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14
Q

What are the major sectors of human society driving change?

A

Manufacturing and mining, agriculture, energy and transportation, forestry, recreation

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15
Q

What happens it we identify the optimum amount of pollution?

A

Lost to society of having less pollution is offset by benefits to society of the activity creating pollution

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16
Q

To find optimum, what must we identify and balance?

A

Marginal Cost of pollution and Marginal Cost of abatement

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17
Q

What is marginal Cost of pollution?

A

Cost of small additional amount of pollution

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18
Q

What is Marginal Cost of abatement?

A

Cost of reducing small amount of pollution

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19
Q

What if the cost is high and benefit is low?

A

Reduce or eliminate cost

20
Q

What if the cost is low and benefit is high?

A

Approve action

21
Q

What if the cost and benefit are equal?

A

Depends on societal values, economy, etc

22
Q

When do Cost and benefits occur?

A

Either immediate benefits and delayed costs or immediate costs and delays benefits

23
Q

What happens in an unregulated market?

A

Those who pollute only pay a small traction of the total costs of pollution

24
Q

What happens with pollution in an unregulated market?

A

The cost of pollution faced by the polluter is substantially lower than the cost of pollution to society

25
Q

What does implementing policies do for pollution?

A

Move polluter costs to left and reduce excess pollution

26
Q

What are some strategies for pollution control?

A
  1. Command and control solutions
  2. Incentive-based regulations
27
Q

What are command and control solutions?

A

Government requires particular equipment installed to lower emissions or pollutants

28
Q

What is the problem with command and control solutions?

A

Discourages low-cost alternative or creativity

29
Q

What are some incentive-based regulations?

A
  1. Environmental (“green”) taxes
  2. Tradeable permits
30
Q

What are environmental (“green”) taxes?

A

Taxes on pollution

31
Q

What are tradeable permits?

A

Rely on identifying optimum level of pollution and permit holder can generate pollution or sell permit

32
Q

What does adding a “green” tax do?

A

Encourages polluter to decrease pollution

33
Q

What is a point source pollution?

A

Stationary location where pollutants are emitted (identifiable discharge point of pollution)

34
Q

What are non-point source pollutions?

A

Sources that are diffuse and do not have a point of origin

35
Q

What is the US NPA’S NPDES?

A

A permit program that controls water pollution by regulating point sources and limiting discharge pollutants

36
Q

What does NPDES stand for?

A

National Pollutant Discharge Elimination System

37
Q

What is a NPDES permit?

A

License to discharge specified amount of pollutants into water under certain conditions

38
Q

Who is required to have a NPDES permit?

A

All facilities that discharge directly into surface waters

39
Q

Who is exempted from having a NPDES permit?

A

8 total - Non point source agricultural activities

40
Q

What are the criticisms of environmental economics?

A

Difficult to access true costs of environmental pollution and abatement & utilitarian economics may not be appropriate

41
Q

Why is it difficult to assess true costs of environmental pollution and abatement?

A
  1. impacts of pollution on people and nature is uncertain
  2. unknown value of ecosystem services (indirect benefits)
  3. impacts of actions on global-scale problems like climate change are hard to predict
42
Q

Why utilitarian economics may not be appropriate?

A
  1. dynamic changes and time are not considered
  2. often marginal cost functions are arrived at without empirical evidence or data
43
Q

What are national income accounts?

A

represents the total income of a nation for a given year (GDP and NDP)

44
Q

What does NDP account for?

A

capital depreciation over the year\

45
Q

What is GDP and NDP?

A
  1. provides estimates of national economic performance
  2. important for policy decisions
  3. misleading and incomplete because these metrics do not incorporate environmental factors
46
Q

Why may the environment be exploited?

A

to yield a higher GDP in developing/emerging economies

47
Q

What is Yale’s Environmental Performance index (EPI)?

A

assesses a country’s commitment to environmental and resource management

Ensc (6 decks)

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