Topic 2 - The Economy and the Environment Flashcards
Ambient Quality
The quantity of pollutants in the environment.
Environmental Quality
The state of the natural environment.
Residuals
Materials that have been left over after something has been produced or consumed; essentially, waste.
Emissions
Refer to portion of production or consumption residuals that have been left in the environment; air pollutants.
Effluent
A water pollutant.
Recycling
Refers to the process of returning a portion or all of the production or consumption residuals to be used again in production or consumption.
Pollutant
Refers to a substance that negatively affects the ambient quality level and affects human health, environment, and the economy.
Damages
Negative impacts caused by environmental pollution.
Analytical Model
Focuses on the most important elements of the equation and ignores other elements; a simplified representation of reality.
Incentive
Something that attracts or leads people to modify their behaviour.
Positive vs Normative Analysis
Positive analysis relies on facts or logic to describe how the world is.
Normative analysis relies on value judgements and theories to describe how the world should be.
Cumulative vs Non-Cumulative Pollutant
Cumulative pollutant accumulates in the environment over time; i.e. carbon dioxide.
Non-cumulative pollutants dissipate soon after being emitted; i.e. noise.
What does environmental economy focus on, in the context of production and consumption residuals?
Environmental economics focuses on measures that could be used to reduce the impact from the production and consumption residuals, to then reduce their impact on society and the environment.
How can one reduce the flow of the residuals flowing into the environment?
Reduce - reduce the quantity of production; reduce the number of inputs used in production by adapting new technology.
Reuse - reuse inputs previously used in consumption, go from high-residual outputs to low-residual outputs.
Recycle - increase recycling, which is the use of residuals from consumption and production for new consumption or production services.
What are some things that can cause a shift in demand?
Income, price of related goods, tastes and preferences, population and demographics; expectations about future prices, income, and product availability.
Stated vs Revealed Preference
Stated preference - approach involves asking people to state their willingness to pay for an environmental feature. The actual choice stays unobserved, which means people can overstate or understate their true opinion.
Revealed preference - an approach of directly observing one’s choice of the will to pay for that same feature.
Will to Pay vs Will to Accept
How much one is willing to pay to improve a negative polluter vs how much one is willing to receive/accept to deal with living with that negative polluter.
Natural Resource Economics
The study of how to efficiently extract, harvest, or use natural resources over time.
Renewable Resources
Refers to living resources capable of growth; harvesting from such resources can be sustainable over-time as they keep growing in the long-run.
Examples include fisheries and forests.
Non-Renewable Resources
Refers to resources not capable of significant growth; once these resources are used, they are gone forever, hence, the extraction from such sources is unsustainable.
When using these resources, one is making a trade-off between today and the future.
Examples of this include fossil fuels, natural gas, and non-energy mineral deposits.
