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ECON-2317 - Environmental Economics > Chapter 1 - Introduction > Flashcards

Chapter 1 - Introduction Flashcards

1
Q

Define Economics:

A

The study of how and why individuals and groups make decisions about the use and distribution of valuable human and non-human resources.

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2
Q

Define Environmental Economics:

A

The application of the principles of economics to the study of how environmental resources are managed.

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3
Q

What is Microeconomics?

A

The study of the behaviour of individuals and small groups.

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4
Q

What is Macroeconomics?

A

The study of the economic performance of economies as a whole.

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5
Q

Does environmental economics draw from macro or microeconomics more? Why?

A

Microeconomics, because it focuses on why people make decisions that have consequences for the natural environment.

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6
Q

What does Environmental Economics focus on?

A

A societies natural and environmental resources, and examines the way people make decisions that lead to environmental destruction and environmental improvements.

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7
Q

Environmental economics is an ___________ subject.

A

analytical

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8
Q

What are analytical models?

A

A simplified representation of reality.

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9
Q

What are the two distinguishing factors of economics?

A
  • Positive
  • Normative
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10
Q

______________ Economics: The study of what is.

A

Positive

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11
Q

______________ Economics: The study of what ought to be.

A

Normative

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12
Q

What does Positive Economics seek to understand?

A

How an economic system actually operates.

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13
Q

In relation to environmental issues, what is the economic approach regularly contrasted with?

A

The Moral Approach

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14
Q

What does the Moral Approach state?

A

That environmental degradation is the result of human behaviour that is unethical or immoral.

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15
Q

Provide some incentives, beyond money:

A
  • Time
  • Reputation
  • Risk
  • Guilt
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16
Q

Define Behaviour Economics:

A

An attempt to introduce psychological and perceptual factors into economic models, in order to make these models more realistic and more accurate in understanding human behaviour.

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17
Q

Define an Institution:

A

The fundamental set of public and private organizations, laws, and practices that a society uses to structure its economic activity.

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18
Q

What is pollution often associated with?

A

Profit Motive

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19
Q

Define Economic Incentive:

A

Something in the economic world that leads people to channel their efforts at economic production and consumption in certain directions.

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20
Q

Provide an example of a nonmaterial incentive:

A

Self-esteem, the desire to preserve a beautiful visual environment.

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21
Q

What is a PAYT Program?

A

‘Pay as you throw’, a system many communities have structured to give people the incentive to reduce their waste streams.

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22
Q

What is PAYT an example of?

A

Incentive

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23
Q

What is a drawback of the PAYT program?

A

The increase in illegal dumping.

24
Q

Define Unit Pricing:

A

Reduce their solid waste to one where there are such incentives.

25
Q

What is a common way of environmental economists identifying policy alternatives?

A

Command and control

26
Q

What is one of the most agreed upon method of reducing GHG emissions?

A

Emissions Charges

27
Q

____________ has a major role to play in the design of public policies for environmental quality improvement.

A

Environmental economics

28
Q

What is included in the total social cost of environmental pollution?

A
  • Expenditures +
  • Damage Costs +
  • Planning Costs
29
Q

What is an important problem in environmental policy?

A

Perverse Incentives

30
Q

___________ Incentives:

A

Incentives created by a policy that actually work against the overall objectives of that policy.

31
Q

Incentives are _______________ problems because they deal with the behaviour of individuals.

A

Microeconomic

32
Q

What kind of shape does the curve representing the relationship between GDP Growth and the Environment have?

A

Inverted-U

33
Q

Effective decision-making requires that there be adequate information about the ______________ of the decisions.

A

consequences

34
Q

What is the main type of public-sector analysis in environmental policy?

A

Benefit-cost-analysis

35
Q

In the benefit-cost approach, environmental groups typically stress the ____________; business groups usually focus on the _________.

A

Benefits, costs

36
Q

What variable complicates the benefit-cost analysis?

A

That the benefits are usually non market in nature.

37
Q

What two groups are countries often divided into?

A

Developed and developing

38
Q

What is IB Approaches?

A

Incentive-based Approaches

39
Q

Provide an example of a global environmental problem?

A

Destruction of the earths stratospheric layer by chemicals.

40
Q

Define Globalization?

A

The perceived changes that are taking place int he world economy, including trade, privatization, flow of financial capital.

41
Q

What kind of resources does Resource Economics consist of?

A

Renewable and Non-renewable.

42
Q

What does Environmental Economics consider?

A

Residuals from production and consumption.

43
Q

What are two reasons why individuals choose to pollute?

A
  • Scarcity
  • Tradeoffs
44
Q

Given that individuals have an incentive to pollute, what can be done to improve social welfare?

A
  • Efficiency
  • Equity
45
Q

What are externalities?

A

When A’s consumption or production activity has an indirect effect on other members of society that is not internalized by A.

46
Q

When are externalities more likely to occur?

A

With a lack of property rights.

47
Q

What are two key ways of mitigating emissions?

A
  • Reduce Production
  • Reduce residuals intensity of production.
48
Q

How can you reduce residuals intensity of production?

A
  • Technological improvement
  • Shift composition of goods
  • Recycling
49
Q

What are the three types of Equity?

A
  1. Horizontal Equity
  2. Vertical Equity
  3. Intergenerational Equity
50
Q

__________ Equity: When an environmental policy has the same impact on different groups of people with the same income level.

A

Horizontal

51
Q

______________ Equity: When an environmental policy has the same impact on different groups of people with different income levels.

A

Vertical

52
Q

_____________ Equity: Pollution by current generation may negatively affect quality of life of future generations.

A

Intergenerational

53
Q

Provide the five types of pollutants:

A
  1. Accumulative vs. Non-accumulative
  2. Local vs. Global
  3. Point Source vs. Non-point source
  4. Continuous vs. Episodic
  5. Damage unrelated to emissions.
54
Q

What is the PPF / PPC?

A

Production Possibility Frontier / Curve

55
Q

What does the PPF / PPC tell us?

A

It shows the maximum amount of environmental quality that a given society/economy can achieve or produce given the amount of other goods that are produced given the resources and technological constraints (all under the idea of scarcity).

56
Q

Draw the PPF / PPC:

A

Week 1

ECON-2317 - Environmental Economics (21 decks)

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