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    environmental economics introduction

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    environmental economics introduction

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    56 views16 pages

    Environmental Economics and Management:: Theory, Policy, and Applications 3e

    Uploaded by

    Arina Farihan Azhar
    environmental economics introduction

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as ppt, pdf, or txt
    of 16

    Environmental Economics and Management:

    Theory, Policy, and Applications 3e


    by Scott Callan and Janet Thomas

    2004 Thomson Learning/South-Western

    Chapter 1

    The Role of Economics in Environmental Management

    2004 Thomson Learning/South-Western

    Economics and the Environment


    Economic theory explains what we observe in reality Microeconomic analysis can also be used to analyze environmental problems

    Economics and the Environment


    Circular Flow Model the basis for modeling the relationship between economic activity and the environment
    Real Flow Factor Market Output Market Money Flow

    Does not explicitly show the linkage between economic activity and the environment
    4

    Economics and the Environment


    Figure 1.1 Circular Flow Model of Economic Activity

    Economics and the Environment


    Figure 1.2 Materials Balance Model: The Interdependence of Economic Activity and Nature

    Economics and the Environment


    Materials Balance Model illustrates the relationship between economic activity and the environment
    Flow of Resources Natural Resource Economics concerned with flows of resources from nature to economic activity Flow of Residuals Residuals by-products released back into the environment Assimilative Capacity environmental ability to absorb residuals Recovery Recycling and Reuse methods to delay the flow of residuals
    7

    Economics and the Environment


    Materials Balance Model
    Science and Materials Balance First Law of Thermodynamics matter and energy can neither be created nor destroyed Second Law of Thermodynamics natures capacity to convert matter and energy is not without bound

    Fundamental Concepts in Environmental Economics


    Causes of Environmental Damage: Types of Pollutants
    Natural Pollutants nonartificial Anthropogenic Pollutants human induced and include all residuals associated with consumption and production Of greater concern to environmental economists

    Fundamental Concepts in Environmental Economics


    Sources of Pollution: Classifying Polluting Sources
    Source Grouped by Mobility Stationary Sources fixed site Mobile Source any non-stationary source Sources Grouped by Identifiability Point source single identifiable source Nonpoint Source a source that cannot be accurately identified

    10

    Fundamental Concepts in Environmental Economics


    Identifying the Scope of Environmental Damage: Local, Regional, and Global Pollution
    Global Pollution widespread environmental effects with global implications Examples:
    Global warming Ozone depletion

    11

    Identifying Environmental Objectives


    Environmental Quality reduction in anthropogenic contamination to socially acceptable levels Sustainable Development management of resources to ensure long-term quality and abundance Biodiversity the variety of distinct species, genetic variability, and variety of inhabitable ecosystems
    12

    Environmental Policy Planning: An Overview


    Figure 1.4 Parties Involved in Environmental Policy Planning

    13

    Environmental Policy Planning: An Overview


    National Environmental Policy Act Risk Analysis
    Risk Assessment qualitative and quantitative evaluation of risk posed by an environmental hazard Risk Management decision process of choosing from alternative responses to environmental risk

    14

    Environmental Policy Planning: An Overview


    Policy Evaluation Criteria
    Allocative Efficiency requires resources be appropriated such that benefits are equal to costs Cost-effectiveness requires the least amount of resources be used to achieve an objective Environmental Quality concerned with the fairness of the environmental risk burden across segments of society or geographic region

    15

    Environmental Policy Planning: An Overview


    Governments Overall Policy Approach
    Command-and-control Approach regulates polluters through the use of rules Market Approach incentive policy that encourages conservation or pollution reduction Polluter-pays Principle polluter pays for the damage caused

    Setting the Time Horizon


    Management Strategies a short-term strategy intended to manage an existing problem Pollution prevention long-term strategy aimed at reducing the amount of toxicity of residuals released to nature
    16

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