Lec 12 Flashcards

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1
Q

Neoclassical economics

A

A theory of economics that explains market prices in terms of consumer preferences for units of particular commodities

Buyers want lower prices

Sellers want higher

This conflict results in a compromise-price and the “right” quantity being bought and sold

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2
Q

4 assumption of the neoclassical theory

A

Resources are infinite or substitutable

Long-term effects should be discounted

Costs and benefits are internal

Growth is good

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3
Q

Issues with Neoclassical theory assumptions

A

These assumptions have massive environmental implications

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4
Q

Resources are infinite and substitutable issues

A

The Earth is a closed system

Even renewable resources can be exploited and used up

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5
Q

Tragedy of the Commons (Hardin 1968)

A

Analogy that shows how individuals driven by self-interest can end up destroying the resource upon which they depend

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6
Q

Natural Resources is another word for

A

Commons

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7
Q

Collapsing tragedy

A

Tragedy in which selfishness causes the loss of a resource

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8
Q

Component tragedy

A

Selfishness reduces the resource

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9
Q

Long-term effects should be discounted issues

A

The market value resources is discounted for future use

Economically, best to gain value now instead of waiting for later

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10
Q

Neoclassical economics

A

All costs and benefits of goods or services are between the individuals involved in the transaction

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11
Q

Real life economics

A

We are all connected

Costs and benefits are not internal

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12
Q

Externalities

A

Costs or benefits of a transaction that involve people other than the buyer or seller. Can either be positive or negative

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13
Q

Problem with externalities

A

Too many negative ones

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14
Q

Growth is good issue

A

More and bigger is not always better

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15
Q

Commonly used metric for the health of an economy is

A

Its growth rate: how many goods and services are provided

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16
Q

What to do about neoclassical economics problems

A

Think beyond a single economic bottom line

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17
Q

Single bottom line

A

Generating profit is the only focus

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18
Q

Triple bottom line

A

Economic social and environment are factors

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19
Q

3 bottom line idea

concept of the 3 P’s

A

People

Planit

Profit

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20
Q

How do we approach the triple bottom line system

A

Assign a value to the goods and services we receive from the environment

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21
Q

Ecosystem goods and services

A

The benefits humans derive from ecosystem functions. Often referred as ecosystem services

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22
Q

Ecosystem function

A

The capacity of nature to provide goods and services that satisfy human needs

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23
Q

4 types of ecosystem services

A

Provisioning

Regulating

Cultural

Supporting

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24
Q

Provisioning

A

The delivery of products that we directly use

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25
Q

Regulating

A

Services provided that regulate our environment

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26
Q

Cultural

A

Non material benefits that enrich the human experience

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27
Q

Supporting

A

The provision of ecosystem processes needed to support life and all other ecosystem services

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28
Q

Ecosystem service example

Water regulation

A

Regulation of hydrological flow

Provisioning category

29
Q

Ecosystem service example

Nutrient cycling

A

Storage, internal cycling, processing and acquisition of nutrients

Nitrogen fixation

Supporting category

30
Q

Ecosystem service example

Food production

A

That portion of gross primary production extractable as food

Provisioning category

31
Q

Social and environment make

A

Bearable

32
Q

Social and economic make

A

Equitable

33
Q

Economic and environment make

A

Viable

34
Q

Social environment and economic make

A

Sustainable

35
Q

Ecosystem valuation

A

Assignment of economic value to an ecosystem or ecosystem services

36
Q

Ecosystem valuation
Often represents

A

The monetary cost of replacing the ecosystem service

The monetary value of the capital gained from the resource

37
Q

Estimating nonuse values includes

A

Existence value

Aesthetic value

Bequest or option value (willingness to pay to protect some forms of natural capital for future generations)

38
Q

Estimating the values of the Earth’s natural capital includes

A

Monetary worth of ecosystem services

39
Q

Traditional/Neoclassical economics

Capital

A

Goods and services of economic value

Resources that can be used to create goods

40
Q

Traditional/Neoclassical economics

Social capital

A

The value of relationships between people

41
Q

Traditional/Neoclassical economics

Natural capital

A

The summation of all ecosystem services on Earth, available to us for free

42
Q

Ecological economics

Natural capital

A

Resources and services provided by the Earth’s natural processes

43
Q

Ecological economics

Human capital

A

People’s physicals and mental talents

Includes the social capital from traditional economics

44
Q

Ecological economics

Manufactured capital

A

Tools and materials

45
Q

Ecological economics recap

A

Human economic systems are subsystems of the biosphere

Conventional economic growth will become unsustainable

46
Q

Economic value of natural capital and pollution control

Things we must estimate

A

Present and future values of a resource or ecosystem service

Optimum levels of pollution control and resource use

47
Q

Marginal cost of resource production

A

Cost of removal goes up with each additional unit taken

48
Q

Optimum level of resource use

A

Intersection of supply and demand curves

49
Q

Optimum level for pollution cleanup

A

When cost of removing pollutants exceeds harmful costs of pollution

50
Q

Alberta Timber

Value of timber production

A

Pulp

Saw-logs

Veneer

51
Q

Alberta timber cost

A

6.2 billion dollars over 20 years

52
Q

Examples of Ecosystem Valuation

Carbon Sequestration in Alberta

A

How much C is stored in forests

Valued as the market cost of C as defined by the Alberta Government

Value of forest carbon in Alberta is $144 billion based on current storage

53
Q

Potential solution

Ecological Economics looks into

A

Depletion of natural resources and longer-term implications

Pollution and its ecological and human health effects

Disturbances that cause damage to natural ecosystems

Endangerment and extinction of species

Impairment of ecosystem services that are part of the life-support system of the planet

Social effects of environmental damage

54
Q

Potential solution

Sustainable Economics

A

A sustainable economy can be maintained over time without causing depletion of its natural capital

Wise use of renewable resources, harvested at rates equal to or less than their productivity

Economic development=
Progress made toward a sustainable economic system

55
Q

Most countries

A

Still support rapid economic growth

56
Q

In a conventional market scenario

A

The supply of something increases, the demand increases too

57
Q

Ecosystem supply and demand

A

Many ecosystem services are only swappable up to a point

With ecosystems, once they stop functioning, their services disappear, so the demand curve changes

58
Q

Cost-benefit analysis

A

State all assumptions used

Include estimates of the ecosystem services

Estimate short- and long-term benefits for all population groups

Compare costs and benefits of alternative courses of action

59
Q

We can use resources more sustainably by

A

Full-cost pricing

Subsidizing environmentally beneficial goods

Taxing pollution and waste instead of wages and profits

60
Q

Full cost pricing

A

Including estimated costs of harmful environmental and health effects of productions

61
Q

Market price

A

Does not include indirect, external, or hidden costs

62
Q

Global value of Marine and Terrestrial services

A

$33268 yr (-1) x 10(8)

20949 for marine

12319 for terrestrial

63
Q

Global value of nutrient cycling

A

$17075 ha/yr (-1)

64
Q

Terrestrial natural capital with value

A

Forests

Grasslands/rangelands

Cropland

Swamps/Floodplains

65
Q

Aquatic natural capital with value

A

Coastal marshes/mangroves

Open ocean

Coral Reefs

Marine Shelf

Lakes/Rivers

66
Q

Changes in area vs unit value from 1997 to 2011

A

No change in area but unit value has increased

67
Q

Principles of Neoclassical Economics

A

Grow

Compete

Use resources fast

68
Q

Principles of ecological economics

A

Just so much and no more

Take only what you need and leave your competitor enough to live

When a part wears out, don’t discard it, use it for something else

Give to the future