Environmental Sustainability Flashcards
Define ‘natural environment’
All of the physical environment i.e. land, water, plant and animal life, etc.
Define ‘ecologically sustainable development’ or ESD
Involves ENHANCING and CONSERVING the community’s resources so that ECOLOGICAL PROCESSES and the QUALITY OF LIFE are maintained
Describe ‘intergenerational equity’
Concept that resources shouldn’t be used in a way that limits the quality of life for future generations (major component of ESD)
Why does market failure occur?
Because the price mechanism only takes account of private benefits and COP to consumers and producers - doesn’t take account of wider social costs and benefits borne by all of society
What is the price mechanism?
Involves the interaction of the market forces of S and D to reach an equilibrium price and quantity of production
The price mechanism is the key determinant in decisions about what goods will be produced, in what quantity, and the price at which they will be sold
What is a negative externality?
Unintended negative outcome of an economic activity whose cost is not reflected in the operation of the price mechanism
- adverse spill-over effects on the environment from eco activity a.k.a demerit goods
Describe the ‘tragedy of the commons’ concept
The overuse of environmental goods such as fishing, deforestation or pollution, reduces the supply of these resources > remaining supply will be in a remote location with a limited quantity, making it more expensive to buy them
Explain how a lack of property rights for environmental goods leads to market failure
A lack of property rights for environmental goods such as atmosphere and freshwater can lead to market failure as it is not possible to accurately determine the monetary value of these resources
What are positive externalities?
Unintended positive outcomes of economic activity whose value is not reflected in the operation of the price mechanism - beneficial spill-over effects from economic activity for society
Describe the key features of public goods
- Non-excludable - once provided, the producer cannot exclude consumers from enjoying its benefits
- Non-rival - one person’s enjoyment of the good doesn’t limit the quantity of the good available to anyone else
How does ‘free riding’ lead to market failure?
Freeriding occurs when consumers or businesses benefit from the good or service without paying for its production or maintenance > price mechanism cannot produce an equilibrium outcome that properly reflects the forces of demand and supply – and the setting of a price doesn’t limit the consumption of public goods
How are Australia’s environmental policies grouped?
- Targets
- Regulations
- Market-based policies
- International Agreements
