ES 100-Ch 23

Cap and Trade

-An approach to controlling pollution by mandating upper upper limits on pollution (cap) on how much each country, sector, or specific industry is allowed to emit. -Companies that can cut pollution more than they are required to can sell the credit to other companies that are not meeting their mandated levels. -you can do this personally, as there are several organizations that will sell you an offset to make your lifestyle carbon neutral

Environmental protection creates jobs

-Business leaders used to claim that environmental regulations would cause job losses. -Studies by ecological economists show that only .1% of all large scale lay-offs in the US were due to government regulations -Environmental careers are expected to increase in areas such as: -->Renewable energy -->Recycling -->Climate remediation -->ecosystem restoration

Emissions trading

-Programs in which companies that have cut pollution more than they're required to can sell "credits" to other companies that still exceed allowed levels -The 1990 Clean Air Act mandated reduction in sulfur dioxide to cut acid rain. Targeted reduction was 10 million tons/ yr. Sulfer exchange was set up and nationwide emissions have come down. -There are still hot spots of air pollution where companies are buying credits -carbon trading is a $28 billion market -->Europena Climate change exchange -->US only has voluntary caps on carbon

ecological economics

-assumes that natural resources are limited and valuable, while manufactured capital is abundant -question the idea of unlimited economic growth; convert about carrying capcacity -real, life-cycle costs (ex: energy production)

Cost-benefit analyses

-attempts to assign values to resources and social and environmental effect of carrying out a given undertaking -tries to find optimal efficiency point at which the marginal cost of pollution control equals the marginal benefit -used in the US since the `980s to evaluate public projects -Economic policy Institute finds the cost of compliance with environmental regulations are almost always less than projected: -->Electric utilities said clean air act would cost them $4-$5 billion, but actually saved them $150 million/yr -->Auto manufacturers said banning CFCs would ass $1,200 to cost of ca. Actual cost was $40 -Risk: Placing monetary value on everything leads to belief that only money and profits count

Population, technology, scarcity

-scarcity can sometimes lead to innovation -greater efficiency can allow people to create the same amount of goods using few resources -discovery of new reserves through better exploration techniques -recycling as resources become more valuable

International trade

-world trade organizations (WTO) and the general agreement on tariffs and trade (GATT) regulate 90% of all international trade -WTO has issued numerous ruling that favor trade over preventing pollution and protecting endangered species -NAFTA has been accused of allowing companies to move across borders to countries with lax environmental standards and low labor costs

neoclassical economics

A branch of economics that attempts to apply the principles of modern science to economic analysis in a mathematically rigorous, noncontextual, abstract, predictive manner.

open-access system

A commonly held resource for which there are no management rules.

hubbert curve

A curve describing a peak and decline in production of natural resources, especially oil production, defined by M. King Hubbert in 1956.

price elasticity

A situation in which supply and demand of a commodity respond to price.

An object's external costs are the: A) costs borne by groups or individuals other than those using the product. B) price the consumer pays plus sales tax. C) actual costs incurred in producing a product. D) price the consumer pays for a product less sales tax.

A) costs borne by groups or individuals other than those using the product.

Resources that are obtainable from Earth but are present in fixed amounts are called: A) non-renewable resources. B) intangible resources. C) proven reserves. D) renewable resources.

A) non-renewable resources.

capital

Any form of wealth available for use in the production of more wealth -natural: from nature -human or cultural: knowledge, experience -manufactured or built: tools, infrastructure -social: shared values, trust, cooperation

The use of Gross National Product as an indicator of economic well-being A) Reflects social welfare B) Is criticized as an inaccurate measure of the quality of life C) Does not take into account economic activity overseas D) Predicts ecological bankruptcy through recognition of decreased natural capital E) Takes into account life expectancy

B) Is criticized as an inaccurate measure of the quality of life

Natural capital is that which is created by A) Human labor B) Natural Earth processes C) Animal labor D) Industrial processes E) All of these are ways natural capital is created

B) Natural Earth processes

Using natural resources so as to be sustainable indefinitely requires A) only using manufactured materials instead of natural resources. B) harvesting natural products at rates not faster than the materials can be naturally replaced. C) recycling household waste

B) harvesting natural products at rates not faster than the materials can be naturally replaced.

steady-state economy

Characterized by low birth and death rates, use of renewable energy sources, recycling of materials, and emphasis on durability, efficiency, and stability.

triple bottom line

Corporate accounting that reports social and environmental costs and benefits as well as merely economic ones.

________ is a nonrenewable resource. A) Biomass B) Solar energy C) Hydroelectric power D) Coal E) Scientific technology

D) Coal

In economic terms, "supply" is how much of something: A) People will buy regardless of price B) People will buy at current prices C) People want D) Is available on the market E) People need

D) Is available on the market

An example of an intangible resource is A) a biogeochemical cycle. B) sunlight. C) iron. D) beauty.

D) beauty.

Neoclassical economics views A) the relationship between supply and demand as having minor importance. B) natural resources as the indispensable factor determining economic success. C) a steady-state as the ultimate economic goal. D) constant economic growth as necessary and desirable.

D) constant economic growth as necessary and desirable.

When a factory pollutes a river, the costs and losses that affect people downstream would be called ________ costs. A) Social B) Incidental C) Internal D) Indirect E) External

E) External

Measuring economic growth

GDP and GNP

Measuring well being

GPI, EPI, and HDI

Calculating Environmental Performance Index (EPI)

Indicators are tracked in 6 areas: environmental health, air, water, natural resources, biodiversity and habitat, and sustainable energy -US ranks 28th, below Malaysia -Sweden, Finland, and New Zealand are among the top-ranked countries

classical economics

Modern, Western economic theories of the effects of resource scarcity, monetary policy, and competition on supply and demand of goods and services in the marketplace. This is the basis for the capitalist market system.

Calculating GDP

Only includes economic activity within national boundaries

Which company started the #OptOutside campaign in 2015

Recreational Equipment Outdoors (REI)

communal resource management systems

Resources managed by a community for long-term sustainability.

ecosystem services

Resources provided by nature, such as food, water, energy, fiber, waste disposal, and other conditions on which life depends.

Calculating Genuine progress index (GPI)

Takes into account real per capita income, distribution equity, natural resource depletion, and environmental damage

Is carrying capacity fixed?

Technological developments have resulted in price decreases for many raw materials over the last hundred years -economists generally believe technological developments will help avoid catastrophe -ecologists generally disagree. -->the fact that we have not yet run out of raw materials does not mean it will never happen -->ecological processes may be more irreplaceable than raw materials

political economy

The branch of economics concerned with modes of production, distribution of benefits, social institutions, and class relationships.

internal costs

The expenses, monetary or otherwise, borne by those who use a resource.

economy

The management of resources to meet needs in the most efficient manner possible

intangible resource

abstract resources such as open space, beauty, serenity, etc

resource

anything with potential use in creating wealth or giving satisfaction

nonrenewable resource

materials present in fixed amounts in the environment (minerals), or renew over geological time (fossil fuels)

renewable resources

materials that can be replenished or replaces (sunlight)

sustainable development

meeting the needs of the present without compromising the ability of future generations to meet their own needs

demand

the amount the product or service consumers are willing and able to buy at various prices assuming they are free to express their preferences -->Demand for a product will increase as the product becomes more scarce

marginal costs and benefits

the costs and benefits of producing one additional unit of a good or service

throughput

the flow of energy and matter into, through, and out of a system

supply

the quantity of that product being offered for sale at various prices

Gross National Product (GNP)

the sum total of all goods and services produced within a national economy. Calculated by: 1.) flow of money from household to businesses in form of goods/services purchased OR 2.) Costs of production in form of wages, rent, interest, taxes, and profit -In both calculations, depreciation for wear and tear on machines, buildings, etc. is included

Calculating HDI

used by UN -->incorporates life expectancy, educational attainment, standard of living -->Norway ranks firsts in HDI; Canada ranks 6th; US ranks 8th -Gender Development Index: HDI adjusted for inequality between men and women -Poverty and child death rates are falling, while life expectancy is increasing in many places around the world