Chapter 3

Risk management plan

-Evaluating the scientific information regarding various kinds of risks -Deciding how much risk is acceptable -Deciding which risks should be given highest priority -Deciding where the greatest benefit would be realized by spending limited funds -Deciding how the plan will be enforced and monitored.

3 economic transformations within the past century

-Industrial Revolution -Technology Revolution -Modern Era of Globalization

3 categories of resources

-Labor (human resources) -Capital (technology and knowledge) -Land (natural resources)

Characteristics that define sustainability

-Renewability -Substitution -Interdependence, -Adaptability -Institutional commitment

Risk Assessment Evaluations

-whether a risk exists -the magnitude of the risk -the consequences of the negative outcome of accepting the risk

4 Steps in Cost Benefit Analysis

1. Identification of the project. 2. Determination of all impacts. 3. Determination of the value of impacts. 4. Calculation of net benefit.

3 parts of risk

1. Probability 2. Consequences of a bad outcome 3. Cost of dealing with bad outcome

Deferred costs

A cost that is not paid immediately when an economic decision is made but must be paid at a later date. -agricultural soil erosion

A leader in renewable fuel use, drawing 44% of its energy from renewable fuels.

Brazil

The world's largest emitter of greenhouse gases

China

Life cycle of a product

Concept Raw materials extraction manufacture Distribution Consumption Collection Processing Disposal

Sustainable development

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Pollution costs

Expenditures to correct pollution damage once pollution has already occurred

Debt-for-nature exchanges

Innovative mechanism for addressing the debt issue while encouraging investment in conservation and sustainable development -The conservation organization buys the debt from the creditor at a discount (some return is better than a total loss)

Examples of environmental costs of resource exploitation

Pollution, species extinction, resource depletion, and loss of scenic quality

"The Tragedy of the Commons" (1968)

Story with the moral that humans are generally more concerned with their self and less concerned with the greater good - we are all selfish -disposable cups -big cars

The world is at the threshold of another great change...

The age of green economics

supply

The amount of goods available

Extended product responsibility

The concept that the producer of a product is responsible for all the negative effects involved in its production, including the ultimate disposal of the product when its useful life is over.

supply and demand curve

The relationship between the available supply of a commodity or service and its demand. The supply and demand change as the price changes. -demand>supply=price rises -demand<supply=price lowers

Pollution prevention costs

Those incurred either in the private sector or by government to prevent, either entirely or partially, the pollution that would otherwise result from some production or consumption activity.

risk management

a decision-making plan that weighs policy alternatives and selects the most appropriate regulatory action by integrating risk assessment results with engineering data, and with social, economic, and political concerns

cost-benefit analysis

a decision-making process in which you compare what you will sacrifice and gain by a specific action

Negligible risk

a point at which there is no significant health or environmental risk

nonrenewable resources

a resource that cannot be replaced

Subsidy

a sum of money granted by the government or a public body to assist an industry or business so that the price of a commodity or service may remain low or competitive -difficult to eliminate

Tradable emissions permits

are licenses to emit limited quantities of pollutants that can be bought and sold by polluters

renewable resources

can be formed or regenerated by natural processes

Preventing pollution can _____ business costs and _________ profits

cut, increase

It can be argued all environmental issues are also ___________ issues

economic

Most environmental decisions involve finding a balance between the perceived cost of ____________ the risk and the economic cost of ___________ the conditions that pose the risk

enduring, eliminating

Risk assessment

estimates the probability of harm to human health or the environment that may result from particular management decisions -how likely something bad will

Performance bonds

fees collected to ensure proper care is taken to protect environmental resources

Growth in global energy demand could be cut in ______ over the next 15 years using existing technologies

half

The ecosphere is a _______ ________

large commons

natural resources

materials found in nature that are used by living things but cannot be created

when everybody shares ownership of a resource, there is a strong tendency to __________ and _________ that resource

overexploit, misuse

Deposit-refund programs

place a surcharge on the price of a product which is refunded upon return for reuse or recycling

Risk

probability that a condition or action will lead to an injury, damage, or loss

Information Programs

provide consumers with information about the environmental consequences of purchasing decisions

Emission fees and taxes

provide incentives for environmental improvement by making damaging activities and products more expensive

The Small Business Liability Relief and Brownfield Revitalization Act (SBLRBRA)

provides incentives for small businesses and other entities to develop brown fields

We assign value to natural resources based on our perception of their ________ ________

relative scarcity

Economics

study of how people choose to use resources to produce goods and services, and how those goods and services are distributed to the public

Life-cycle analysis

the assessment of the effect a product has on the environment from the initial concept to disposal

External costs

the costs of a market activity paid by people who are not participants -cleanup of hazardous waste sites

Extended product responsibility

the idea that companies have a continuing responsibility for the environmental impacts of their products and services, even after they are sold

demand

the quantity of a good or service that consumers are willing and able to buy

Contingent Valuation Method (CVM)

uses surveys to elicit responses about WTP for environmental quality based on hypothetical market conditions