Chapter 1 Introduction

Question 1

What are the four functions the environment provides to the economy?

Answer 1

1. Provides life support services
2. Source of resource inputs
3. Source of amenity services
4. Receptacle for wastes

Question 2

What natural resources are there?

Answer 2

There are stock and flow resources. Stock resources can be further categorised into renewable and non renewable (exhaustible) resources. The difference between flow and stock resources is that there is no link between current use and future availability. Conversely stock resources current use does affect future availability.

Examples of flow resources include solar radiation, wave and wind power. Examples of renewable stock resources include biotic populations, fauna and flora. Examples of non-renewable stock resources include minerals and fossil fuels.

Question 3

Explain our use of the environment as an amenity service

Answer 3

Amenity services flow directly from the environment to individuals, with our biosphere providing humans with sources of recreation and pleasure. Use of our environment as an amenity service does not usually require productive activity or consumptive flow, however excessive use can have physical impacts for example sand erosion following vegetation loss.

Question 4

How is our environment a receptacle for waste?

Answer 4

Fossil fuel combustion is a major source of a number of waste emissions, especially into the atmosphere. Production and consumption give rise to waste products which are then discharged into the environment as residuals. Pollution is often treated the same way as a stock resource except with a negative value.

Question 5

What are the drivers of environmental impact?

Answer 5

Production and consumption involves extractions from and insertions into the environment. The total level of impact is decided by the population and the per capital impact. The per capita impact is then dependent on how much each individual consumes and the technology of production.

Question 6

What is the IPAT identity?

Answer 6

The IPAT identity is a formalised version of the drivers of economic impact on the environment that measures impact as a function of mass. The IPAT identity decomposes impact into three multiplicative component; population, affluence an technology.

I = PAT 
tonnes = numbers * $/numbers * tonnes/$

Question 7

What is the environmental Kuznets curve? (1955!)

Answer 7

A hypothesised form of relationship between economic growth and emissions per capita.

e= αy where;
e = emissions per capita
α= β(0) - β(1)y

This relationship implies, that with a significantly small enough β(1), per capita emissions increase with per capita income until a turning point and thereafter reduces it. The EKC is characterised by an inverted U shape and implies that instead of being a threat to the environment economic growth is the means to environmental improvement.

Question 8

Which environmental impacts conform with the EKC curve?

Answer 8

Sulphur dioxide, nitrogen oxide, suspended particulate matter and deforestation