Midterm Prep Flashcards
Why might individual action alone be insufficient for solving environmental and health problems?
Can help, but relying on individual actions is often insufficient to deal with larger and complex problems
Why isn’t scientific evidence enough to promote policy action?
1 not be a policy solution
2 not politically feasible
3 private cost > perceived benefit
What is political mobilization bias?
political agenda by influential and impacted groups in an effort to make it appear that community power is at play when in fact it was generated by a few.
Name 2 examples of political motivation bias that prevents or promotes policy implementation
NRA stopping any anti-gun legislation
What is equity?
fair, just and equal distribution
What’s the difference between command and control / direct regulation and incentive/market-based regulation?
Command
VSL
value of statistical life
VSLY
value of statistical life year
Name 2 examples of command and control
banning drugs
banning thalidomide
Name 2 examples of incentive/market based regulation
cap and trade (hybrid)
plastic bag ban (hybrid)
How does cap and trade combine both command and control and incentive/market based?
cap imposes a hard limit, while trading allows the players to be incentivized to reduce, and generate new reduction technologies
example of revealed preference?
how much do people pay to avoid heart disease?
When is each tool appropriate?
TBD
What is the goal of cost-effectiveness/ productive efficiency analysis?
finding the most efficient way to reach a target
What is allocative efficiency?
refers to “net benefits” - benefits - costs. Incorporates both cost and benefit. Efficiency maximizing
When would you use cost-effectiveness / prod efficiency analysis?
if you have a target that you’re trying to achieve. ie- reduce pollution levels to 20% of current. Great tool for comparing two+ policies or levers to achieve a target. Often used when benefits are difficult to measure
When would you use allocative efficiency?
when you’re trying to maximize efficiency.
What is inflation?
increasing in prices and devaluation of money
What is a consumer price index, and how can it be used to account for inflation?
index of the variation of prices paid by consumers. Measure of inflation - cost/price of basic goods over time
How can discounting be used to account for costs and benefits distributed across future years?
TBD
revealed preference
analyzing choices made based on choices - revealed by actual purchase habits
What is the formula used to calculate the present value of discounted costs and and benefits?
Present value = Sum of All (future amount/(1+real rate)^time)
what is an externality?
is a social cost that is not taken into account by buyers or sellers in a market transaction
another name for “productive efficiency”
cost-efficiency
QALY
quality adjusted life year
another name for “productive efficiency”
cost-efficiency
Adjusted figure
past dollars in today dollars
Adjusted figure equation
(current index / past index) * past expenditure
real interest rate calculation
interest rate - inflation rate
Present Value calc
Sum (future amount/(1+rate)^time)
Present Value calc
Sum (future amount/(1+rate)^time)
What was the goal of AB 32?
reduce GHG to 1990 levels by 2020 (25% reduction)
How did AB 32 do this?
mix of conventional regulation (command/control) and cap and trade. Cap in Trade adopted 2012
Tailpipe emissions standards (command/control)
MB = ?
marginal benefit = Demand
MC = ?
marginal cost = Supply
TC
total cost
TB
total benefit
marginal cost
additional cost of producing one more unit
marginal benefit
additional benefit derived from consuming one more unit
demand
price consumers are willing to pay for a given qty ; OR qty that consumers are willing to buy for a given price. Marginal benefit = demand = willingness to pay