Unit 1: Intro to Environmental Economics-Ch.1 Flashcards
What major environmental issues do we face today
-nitrogen pollution of water
-exposure to toxic chemicals & hazardous waste
-ecosystem change
-water contamination
-declining groundwater supplies
-urban air pollution
-overexploitation of fisheries
-climate change
What are the main frameworks that economists use to understand these environmental issues
-Environmental Economics
-Ecological Economics
What is Environmental Economics
Mainstream economic principles to environmental and natural resource issues
What is Ecological Economics
Views economics as only 1 part of broader ecosystem
Brings in different viewpoints
Economics in the context of BIOPHYSICAL & PHYSICAL SYSTEMS
What is Market Failure of Externalities
Unregulated market fails to produce outcome that is the most beneficial to society as a whole
Principles of Environmental Economics
1) Theory of Environmental Externalities
2) Optimal Mgmt of Common Property & Public Goods
3) Optimal Mgmt of Natural Resources
4) Economic Valuation of Environmental Goods and Services
What is Market Failure of Common Property
Resources not privately owned can’t rely on markets to maintain them in adequate supply
Common Property
Nonexcludable/Rival
Public Goods
Nonexcludable/ NonRival
Economic Valuation of Environmental Goods and Services
To determine optimal degree of environmental protection based on comparison of costs and benefits
Principles of Ecological Economics
1) economic system subsystem of broader ecosystem
2)Sustainability should be defined according to ecological vs economic system
3) Rely on range of academic disciplines to provide insight
What does the Standard Circular Flow Model not address
1) Future use of natural resources
2) Effects of wastes and pollution
3) Effect of resource extraction on other systems
Implications of Expanded Circular Flow model on Economic Theory (3)
1) Alternative indicators of well-being
2) ecological system has its own circular flow-determined by physical/ biological laws
3) Economic activity limited by availability of natural resources and ability of enviro to assimilate wastes and pollution
economic system is bounded*
How does Environmental Economics look at the Circular Flow model
starts in inner circle and looks at ecological issues in ECONOMIC terms
How does ecological economics look at the Circular Flow model
greater emphasis on outer circle
bio laws and limitations
Sustainability Definition
Meet the needs of the present without compromising the needs of those in the future
Sustainability and Environmental Economics
-some degradation is acceptable
-natural world has value because humans give it value
Sustainability and Ecological Economics
-world has value independant of humans
-maintain appropriate levels of natural resources and ecological functions
-based solely on ecological factors
What is a Pluralistic Approach
full understanding of an issue can only come from a variety of viewpoints and disciplines
What is Shallow Ecological Economics
Environmental Economics
What is Deep Ecological Economics
Challenge preconceptions
Involves: Ethical/Social/Ecological/Economic Discourse
Value According to Environmental Economics vs Ecological Economics
-A thing only has value if people are willing to pay for it vs Inherent value
Enviro vs Ecological view on Growth
Growth is desirable vs need for growth to level off or de-growth
Enviro vs Ecological View of Markets
Market based solutions (taxes/subsidies) vs. need for macro level changes
