REM reader Flashcards
What does efficient ecosystem management involve?
Efficient ecosystem management involves maximising the net economic benefits supplied by the ecosystem, considering both the benefits provided by the ecosystem and the costs of managing the ecosystem.
What is Pareto criteria?
static economic efficiency implies the following: for some particular initial distribution of property rights, allocation of resources is efficient if there is no feasible reallocation that can increase any person’s utility without decreasing someone else’s utility (see e.g. Freeman, 1993)
What is the development that Kaldor-Hicks brought to the Pareto criteria of efficient allocation?
According to the criterion proposed by Kaldor, a reallocation is efficient if it is possible for the winners to fully compensate the losers of the reallocation, and still leave everyone better off. The Hicksian test asks whether it is possible for the losers to bribe the gainers to obtain their consent to forego the proposed reallocation. If the expected value of the reallocation of the resources for the gainers would be so high that it exceeds the maximum bribe that would be offered by the losers, the reallocation passes the Hicks efficiency criterion (Hicks, 1939)
What is needed in the identification of optimal resource allocations?
Taking income inequalities into account in the identification of optimal resource allocations requires the specification of a social welfare function.
What are the (ethical) shortcomings of Pareto/Kaldor-Hicks approach of efficient allocation?
Even at low discount rates, the importance of the welfare of future generations rapidly diminishes. Because of the large weight discounting attaches to the welfare of current generations as compared to the welfare of future generations, this approach has been criticised as ethically questionable.
What is the main issue with the interpretation of sustainable development?
(Hig) assummed degree of substitutability between natural and man-made capital.
What is a good ( strong sustainability criteria) working definition of sustainable development, which also implies that biodiversity in ecosystem is maintained?
‘Management that maintains the capacity of the ecosystem to provide future generations with the amount and type of ecosystem services at a level at least equal to the current capacity’. Among others, this definition implies that biodiversity in the ecosystem is maintained, for two reasons: (i) maintenance of (functional) biodiversity is required to support the functioning and resilience of theecosystem; and (ii) maintenance of biodiversity is required to sustain the biodiversity conservation service of ecosystems.
What is the Basic Needs Principle in the topic of environmental equity?
The Basic Needs principle. This concept focuses on the poor in a society and states that their income should not fall below a certain minimum level
What is the Difference Principle in environmental equity?
The Difference Principle. This principle is based on theethics proposed by Rawls (1971), and states that the preferred distribution is the one that maximises the welfare of the worst off.
What is the Accountability Principle in environmental equity?
Thee Accountability Principle. This principle states that inequality is acceptable provided that everyone had equal opportunity at the initial allocation and that differences in income are a consequence of differences in effort (Konow, 1996).
What is the “just deserts” concept in environmental equity?
The ‘just deserts’ concept, which states that remedies for injustice should be proportionate to the weight of the injustice, and not cause secondary inequity (Konow, 2001)
What is the equation of consumption discount rate ( on the basis of which you can determine social discount rate)?
The consumption discount rate (r) depends upon three factors, the elasticity of marginal consumption (n), the growth rate of per capita consumption (c), and the utility discount rate (p), according to the following equation (Lind, 1982):
r = n*c+p
Explain the equation of consumption discount rate ( r = n*c+p)?
The first part of the equation indicates that one unit of benefit may provide less utility in the future because society is likely to experience a growth in overall income andconsumption levels (c>0), and because of a decreasing marginal utility of consumption (n>0), i.e. when society becomes richer in the future, an additional unit of consumption provides less utility. The growth in income and consumption levels can be derived from statistics, although these may be difficult to obtain or (partly) lacking where it concerns the consumption of non-market benefits. The decreasing marginal utility of consumption (n) has been examined by, among others, Arrow et al. (1996), who state that a plausible value for n is in the order of 1 to 2. The utility discount rate p expresses that society has a positive time preference for consumption; there is a preference for immediate rather than future consumption.
There is no consensus on the social discount rate, but what is the range of plausible values?
Between 1.3-6%. Critical elements in assuming a value for the social discount rates are the utility discount rate (in other words, the weight attributed to consumption by future versus present generations) and the assumed increase in consumption rates over time.
What is GPI? How is it different from GPD?
The GPI uses the same personal consumption data as GDP but make deductions to account for income inequality, costs of crime, environmental degradation, and loss of leisure. It makesadditions to account for the services from consumer durables, public infrastructure, and volunteering and housework. Compared to GDP, the GPI therefore presents potentially a more accurate representation of changes in a society’s overall consumption level, accounting for environmental change and a range of other factors.
