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