Environment

Question 1

abatement

Answer 1

Practices to limit or reverse environmental damages

Question 2

abatement policy

Answer 2

A policy designed to reduce environmental damages

Question 3

reserves (natural resource)

Answer 3

The amount of a natural resource that is economically feasible to extract given existing technologies

Question 4

global greenhouse gas abatement cost curve

Answer 4

This shows the total cost of abating greenhouse gas emissions using abatement policies ranked from the most cost-effective to the least

Question 5

marginal productivity of abatement expenditures

Answer 5

The marginal rate of transformation (MRT) of abatement costs into improved environment. It is the slope of the feasible frontier

Question 6

feasible frontier

Answer 6

The curve made of points that defines the maximum feasible quantity of one good for a given quantity of another.

Question 7

price-based environmental policy

Answer 7

A policy that uses a tax or subsidy to affect prices ?

Question 8

quantity-based environmental policy

Answer 8

Policies that implement environmental objectives by using bans, caps and regulations

Question 9

cap and trade

Answer 9

A policy in which a limited number of permits to pollute are issued, and can be bought/sold on a market. It combines the idea of both price-based and quantity-based policies

Question 10

contingent valuation (stated-preference model)

Answer 10

A survey-based technique used to assess the value of non-market resources (not traded in traditional markets - such as holidays, fresh air etc.)

Question 11

hedonic pricing

Answer 11

A method used to infer the economic value of unpriced environmental or perceptual qualities that affect the price of a marketed good.

Question 12

discounting future generations’ costs and benefits

Answer 12

A measure of how we currently value the costs and benefits of those living in the future.

Question 13

The polluter pays principle

Answer 13

those who impose negative environmental effects on others should be made to pay for the damages they impose, through taxation or other means

Question 14

equilibrium process
disequilibrium process

Answer 14

An economic variable may change either because the things that determine the equilibrium value has changed (an equilibrium process)

OR

When a system is not in equilibrium, external forces (internal to the model in question) then thus change the economic variable

Question 15

prudential policy

Answer 15

A policy that places a very high value on reducing the likelihood of a disastrous outcome.