Unit 2: Problem of Sustainability: Ch.9 Flashcards
What is Methodological Pluralism
multiple insights guard against mistaken action based on one perspective
What is Natural Capital
Available Endowment of Land and Resources
What is Net Investment
process of adding to productive capital over time
What is Net Divestment
process of subtracting from
if productive capital decreases: economic declineW
What is Capital Depreciation
Deduction in national income accounting for the wearing out of capital overtime
What is NATURAL Capital Depreciation
No accounting made for loss of natural capital-only counts as income
Ex. forest vs timber
Techniques for Natural Capital Accounting
-physical accounting
-sustainable yield (if economic equilibrium > sustainable yield =resource threatened)
-absorptive capacity of the environment
Substituability
-Standard economics assumes Natural Capital can be substituted by Human Capital
ex. fertilizer
Complementarity
Manufactured + Natural Capital needed for effective production
Natural Capital Sustainability
aim to conserve to limit depletion and degradation and invest in renewal
Optimal Macroeconomic Scale
Level where further growth leads to lower well being or resource degradation
What are source functions
Extraction of energy and resources
What are SINK functions
disposal of wastes and waste energy
What is THROUGHPUT
total use of energy and materials as both inputs and outputs of a process
Open System
Economic System is Open
Exchanges energy and resources with global ecosystem
Closed System
Global Ecosystem is Closed
What is Empty World Economics
Economic system is small
Exploit natural resources to increase human made capital
Increased consumption
Economic activity constrained by limited quantities of human-made capital
What is Full World Economics
Economic system presses against ecosystem limits
Environmental degradation begins to undermine economic activity
What is Dematerializatin
Achieve economic goal with decrease use of physical materials
What is Decoupling
Break correlation b/w economic activity and increase in environmental impacts
How do we know if Economics is reaching the limits of the Ecosystem
Look at the environmental thresholds being reached
PLANETARY BOUNDARIES
Exceeded Boundaries
-Nitrogen/Phosphorous
-Climate
-Land Systems Change
-Biodiversity
What aspects are used to measure relationship b/w economic and ecological systems
-Net Primary Product of Photosynthesis: biomass energy
-Carrying Capacity
-Ecological Footprint
What is Strong Sustainability
Limited substitues b/w natural and human made capital
Government intervention extensive
What is Weak Sustainability
Natural and Human made capital can be substituted
When is Government intervention needed in Weak Sustainability
-private owners fail to consider full ecological value of natural capital
-property rights of resources poorly defined
-private owners do not consider long term effects
-common property involved
-irreplaceable resources at issue
What does a high discount rate mean
Greater incentive to exploit resources in the present
Hotelling’s rule
Resource’s net price must rise at rate at least equal to interest rate before they will conserve that resource for the future
For private owners to practice sustainability
Annual yield must be at least equal to market rate of interest
Ecological Complexity
many elements in an ecosystem-human actions are unpredictable
What is Irreversibility
Human Impacts that cannot be reversed
Precautionary Principle
Minimum interference in natural systems as we cannot predict long term effects
First Law of Thermodynamics
Matter & Energy cannot be created or destroyed
Second Law of Thermodynamics
Energy degraded from available to unavailable
What is Entropy
Measure of UNAVAILABLE energy in a system
Entropy increases as natural processes proceed
High Entropy means less available energy
Coal 1st has low entropy-once burned it has high entropy
What is Embodied Energy
Total energy required to produce good or service
Economic Processes of Energy
Low Entropy: Continual process of useable energy and resources
High Entropy: Continual stream of waste energy and products
What governs mechanisms of production
Input & Output flows of resources and energy
Labour and Capital are main productive factors
What is Solar Flux
Continual flow of solar energy to earth
Entropy Laws
-limited stocks of low entropy resources
-limited capacity of soils/biosystems to capture solar energy for production
-limited capacity of ecosystem to absorb high entropy waste
Entropy and Industry
Increasing amount of energy needed to achieve same output
Different ways of payments for Ecosystem Services (PES)
-Monetary
-Free trees to convert land
What is PES
Payments for Ecosystem Services: incentive for resource owners to maintain ecosystem services
How can PES be successful
Conditionality: system must be verified
Additionality: benefits would NOT be obtained without payments
Leakage: beneficial actions not offset by other changes
Permanence: long term
What are Ecological Economics MACRO-LEVEL changes
-Energy: renewable
-Agriculture: organic/regenerative
-Population
-Nonrenewables: conserve/reduce
-Renewables: conserve, prevent overuse
