Environmental Economics Flashcards
Economics
The study of how people use resources to provide goods and services
Goods
Resources that are produced/manufactured and ultimately bought by consumers
Services
Work done for others, usually a business
Subsistence Economy
Oldest form of economy where people produce their daily needs themselves; no trade, no bartering
Capitalist Market Economy
Buyers and sellers directly decide what goods and services are produced and everything associated with those goods and services
Centrally Planned Economies
Government decides all aspects of goods and services production; also decides how to allocate resources (AKA Socialism)
Governments will have five main roles in a mixed market economy:
Eliminate unfair advantages by monopolies (anti-trust laws)
Provide social services for the people (ex: defense, health care, education, etc.)
Intervene for natural disasters, including social disasters
Manage the commons
Mitigate pollution
Classical Economies
When everyone works towards their own self interests, the whole society is benefited; marketplace will theoretically run itself, guided by an invisible hand AKA greed (father of this theory is Adam Smith)
Neoclassical Economies
Takes into consideration the psychological factors involved in marketplace; buyers want lowest prices and sellers want highest prices, which gives birth to supply and demand
Affluenza
Material goods failing to bring their owner contentment
Gross Domestic Product (GDP)
Traditionally the yardstick of how an economy is doing; represents the total monetary value of all final goods and services produced in a given year
Genuine Progress Indicator (GPI)
A new indicator in which economists include a “happiness” scale into an economy’s growth; used by many environmental economists
Seven core values of Contingent Valuation:
Existence Use/Recreation Option Aesthetic Scientific Educational Cultural
Ecolabeling
Marketing strategy where companies tell consumers about their environmentally friendly products or processes
Green Taxes
Government imposes taxes on companies that don’t meet sustainable practices
