NRE 10-13 Exam Quizlet
sustainable development
(Dryzek) a reformist and imaginative discourse that seeks to improve (rather than radically remake) existing economic and political structures to reconcile development and environmental concerns.
Survivalism discourse
(Dryzek) radical, proposing deep and fundamental changes to modern industrial society
Local conservation based development
1) define and pursue a common vision 2) maintain and restore healthy ecosystem 3) develop economic opportunities
Two methodologies to estimate greenhouse gas mitigation costs
1) focus on estimating resource costs at the individual regulated sectors of the conomy 2) use macroeconomic models to explore the systemwide effects of policies to mitigate greenhouse gas emissions
Conflicting notions of fairness
1) person's income should match the value of the work he or she does, which naturally leads to some inequality but provides desirable incentives 2) fundamental human rights, from which one might argue that it is morally wrong for one person to be a billionaire while another starves in the street
The Human Development Report argues that in order for economic growth to improve the well-being of all people, it must:
1) prevent those who failed to gain from growth from falling into abject poverty 2) create jobs 3) ensure wide participation 4) protect the environment for future generations, 5) protect cultural traditions
Problems with command and control
1) technology based standards lock in specific environmental technologies and therefore retard the development of new and improved methods of pollution control 2) uniform performance standards imposed on an industry in which firms have widely different pollution abatement costs results in a higher cost for achieving a given level of overall pollution abatement
Sustainability
A community's control and prudent use of natural, human, constructed, social, and cultural capital to foster economic security and vitality,social and political democracy
Grandfathered Allowances
A free allocation of pollution allowances to polluters based on historic facility-specific emissions or production levels
Transferable Development Rights (TDRs)
A market-based policy tool to restrict development on properly that generates valuable positive externalities. A public agency allows property owners in a sending area (the target area for preservation) to sell their development right to a receiving area considered appropriate for more intensive development. TDRs permit landowners in the receiving area to build at a greater density or intensity that would otherwise be allowed under current zoning. The sending landowner's property is then permanently restricted from the transferred development, usually by a recorded deed restriction.
Global Warming Potential (GWP)
A measure of how much a given mass of greenhouse gas contributes to global warming, relative to the same mass of carbon dioxide. Note that CO_2's GWP is by definition equal to 1.0. GWP is calculated over a specific time interval, and gases with a high GWP have a high radiative efficiency (infared-absorbing ability) and a long atmospheric lifetime.
Gini coefficient
A measure of inequality, often applied to national income distributions. The Gini Coefficient is calculated as a ratio of areas on a Lorenz curve diagram (see entry for Lorenz curve). If we refer to the area between the line of perfect equality and the Lorenz curve as X, and the area underneath the Lorenz curve as Y, then the Gini coefficient is X/(X+Y). A value of 0 indicates perfect inequality, and a value of 1 denotes total inequality
Service and Flow Economy
Advocated by Paul Hawken and Amory Lovins, this "natural capitalism" concept incorporates the idea of extended producer responsibility. Consumers lease durable goods to gain the desired service of the good, and the producer retains ownership and is thus responsible for reuse, recycling, or disposal. Fosters an incentive to "design for the environment" to reduce the cost of reuse, recycling, or disposal.
Feed-in tariff
An energy-supply instrument designed to promote renewable energy production. Utilities purchase electricity from eligible renewable energy generators. The power purchase agreement guarantees a price per kWh fora period of time usually coupled with grid access.
Anthropogenic
An event, such as the emission of greenhouse gases, that is caused by human activity rather than "natural" nonhuman causes
Constructed capital
Another term used to describe the conventional capital stock of the built environment, including factories, equipment, commercial and residential buildings, inventories, and various forms of infrastructure (transportatoin, telecommunications,water and sewer, and energy)
Problem with Clean Air Act
CAA required that costly scrubbers be installed on coal-burning electricity-generating facilities, even though many could have generated the same cleanup by shifting to low-sulfur coal. It fails to be economically efficient.
Kaya Identity
CO_2 Emissions from the Use of Fossil FUels = Population x (GDP/Population) x (Energy/GDP) x (CO_2 / Energy)
Greenhouse Gases
Certain radiatively active atmospheric gases have a molecular structure made up of more than two component atoms, and so are able to vibrate with the absorption of heat. When these atmospheric gases absorb re-radiated infared radiation, thy develop a larger content of thermal energy and thereby slow the rate at which atmospheric heat is dissipated into space.
Ecosystem services
Consist of flows of materials, energy and information from natural capital stocks, which combine with manufactured and human capital services to produce human welfare
Offsets
Emission reduction projects undertaken at sources not covered by a cap-and-trade program. An offset mechanism allows regulated firms to offset their emissions by purchasing emission reduction credits generated through projects not covered by the cap. Offsets lower the overall cost of complying with cap by bringing in new lower-cost emission reduction opportunities
Market-Based Regulation
Environmental or natural resource regulatory policies produce environmental improvements by limiting potentially harmful activity, thereby making it scarce. Markets are then created in which those subject to regulation can buy or sell scarce rights to the potentially harmful activity. These arrangements harness the cost-minimizing incentives of market interaction by self-interested firms or individuals to reduce regulatory compliance costs.
Aerosols
Fine airborne particles or liquid droplets
IPAT Identity
Impact = Population x Affluence x Technology
environmental injustice
In particular, pollution host spots may occur near facilities that have purchased large quantities of allowances. To limit the ___ ______ borne by people living near hot spots, policy-makers may want to require all facilities to generate some minimum abatement
Co-Benefits
In the context of greenhouse gas emissions, some emissions such as CO_2 from combusting fossil fuels are accompanied by emissions of other pollutants such as particulate matter, O3, SO2, mercury, and volatile organic compounds. Reducing these greenhouse gas emissions generates co-benefits derived from reduced emissions of other pollutants. These co-benefits may benefit human health and the environment immediately.
Mitigation
In the context of human-induced harms to the environment, mitigation represents actions taken to reduce the severity or intensity of the harm
Greenhouse Effect
Incoming solar radiation is re-radiated by Earth's atmosphere and surface in the form of infared radiation, and ultimately is dissipated into space, the net result of which is Earth's energy balance. SOme atmospheric gases are "radiatively active" greenhouse gases that are efficient absorbers of infared wavelengths, and these gases thereby slow the radiative cooling of the planet
Kyoto Protocol
International treaty to limit human emission of greenhouse gases that contribute to global climate change
Disability-Adjusted Life-Year (DALY)
One DALY can be thought of as one lost year of healthy life. A metric used to quantify the burden of pollution or disease. Equal to the sum of years of life lost due to premature mortality and years lost due to diability
Conservation-based development
Refers to programs and policies that help entrepreneurs succeed in developing viable businesses that are environmentally sound and make a positive contribution to their local community
cultural capital
Refers to the stock and functional integrity of the body of stories visions, values, history, language and myths shared by people that provide the framework for how people come to view the world and their proper role in it
Sustainable Economic Development
The Brundtland Commission defined sustainable economic development as the process of satisfying present needs without compromising the ability of future generations to meet their own needs. Sustainable economic development generates improvements in human well-being without large increases in energy and material thoroughput or pollution emissions
Albedo
The amount of solar radiation that is reflected from an object or surface. A snow-covered landscape has high albedo, meaning that much of the incoming solar radiation is reflected, whereas black asphalt roads or roof shingles have low albedo and absorb much of the incoming radiation
Radiative Forcing
The extent to which emitting a unit of a greenhouse gas into the atmosphere raises global average temperature. Measured in watts per square meter
Human capital
The stock of knowledge, skills and capabilities of people that can be deployed to create a flow of useful work for community and economy
Agrarian Transition
The transformation from a more dispersed rural society with a largely agricultural economy and labor force to a more urbanized society and a market-mediated industrial and service economy. A process driven by technological advance and global economic integration.
CO_2e
The value of CO2-equivlent emissions is obtained by multiplying the emission of a long-lived greenhouse gas by its global warming potential for the given time horizon. For a mix of greenhouse gases, it is obtained by summing the equivalent CO_2 emissions of each gas. CO_2e is a standard metric for aggregating and comparing emissions of different greenhouse gases.
EPA Acid Rain Program
Title IV of the Clean Air Act set a goal of reducing annual SO2 emissions by 10 million tons below 1980 levels. To achieve these reductions, the law required a two-phase tightening of the restrictions placed on fossil fuel-fired power plants. Phase I began in 1995 and affected 263 units at 110 mostly coal-burning electric utility plants located in 21 eastern and midwestern states. An additional 182 units joined Phase I of the program as substitution or compensating units, bringing the total of Phase I affected units to 445. Emissions data indicate that 1995 SO2 emissions at these units nationwide were reduced by almost 40% below their required level. Phase II, which began in the year 2000, tightened the annual emissions limits imposed on these large, higher emitting plants and also set restrictions on smaller, cleaner plants fired by coal, oil, and gas, encompassing over 2,000 units in all. The program affects existing utility units serving generators with an output capacity of greater than 25 megawatts and all new utility units.
Wetlands Mitigation Banking
Under U.S. law, parties seeking permits for development projects that harm wetlands must first avoid and then minimize those effects. Any remaining damage must be compensated or mitigated. Mitigation banks set up relatively large scale wetlands restoration or enhancement projects, and credits from this activity can later be used or sold to another party to offset impacts to wetlands that occur in other locations. EPA: most reliable form of compensatory wetlands mitigation; federal regulations establish a preference for the use of banks when appropriate credits are available
globalization
a complex process associated with technological, economic and social changes that have lowered the barriers to international connectivity and integration. This process is speeding up dramatically as technological advances make it easier to cheaper for people to travel, communicate, and do business internationally
multilateralism
a concept in international relations that nations should be cooperatively involved in the process of achieving a goal such as trade restrictions or other global efforts. contrasts with unilateral action by a single country
"fee based" wetlands mitigation banks
a developer pays a fee to a third party certified by the corps of engineers, which produces wetlands credits in one or more off-site responsibility for the success of the credits established a precedent for the use of third-party credit providers, which in turn led to the development of commercial wetlands mitigation banks
arbitrage opportunity
a difference in prices in different markets that cannot be entirely accounted for duet to differences in shipping and transaction costs. arbitrageurs trade across the two markets, which works to equilibrate prices
benchmarked allowances
a free allocation of pollution allowances to polluters based on benchmarked or targeted emissions rates. May be based on industry average emissions rates or rates associated with best available technology.
tradable pollution allowances
a market-based regulation embedded within the overal context of reducing pollution, thereby making allowed pollution emissions scarce. Firms are allocated allowances that sum to less than historical emissions. A market for these pollution allowances creates an opportunity for firms with high pollution abatement costs to purchase allowances from firms with lower abatement costs, thereby reducing the overall cost of compliance
renewable portfolio standard
a policy instrument that promotes renewable energy production by mandating that electric utilities provide renewable electricity to their customers, typically as a minimum percentage of total load (demand). May be mandatory or voluntary works by setting a minimum percentage of generation that must come from qualified renewable sources.
Cap-and-Trade System
a regulatory system in which aggregate pollution emissions are capped, thereby making allowed emissions scarce. The overall emissions cap is then apportioned into shares and allocated as allowances. These allowances can then be traded.
empowerment
a social process that helps formerly marginalized people overcome deprivation and gain some degree of discretionary control over their own lives, and some influence on community governance and well-being
free trade
a system of international trade policy (or ideology) that frees private enterprises to transact the exchange of goods and services across national boundaries without government regulation or interference
Ecological Economics
a transdiciplinary field focused on the interdependence of economies and natural ecosystems over time. Distinguished from environmental economics by its more science-centered treatment of the economy as a subsystem of the ecosystem and by its emphasis on preserving natural capital
marginal abatement cost
additional abatement cost incurred due to an additional unit of pollution abatement
environmental justice
addresses the inequitable environmental burdens borne by groups such as racial or ethnic minorities, women, residents of economically disadvantaged areas, or residents of developing nations
netting
allows a firm that creates new sources of emissions in a plant to avoid the stringent emissions limits that would normally apply by reducing emissions from another source in the same plant
allowance banking
an allowance trading program design feature that allows regulated firms to save current pollution allowances for use in future years if firms anticipate higher future allowance prices, then they can purchase and bank allowances to used in the future. Such an action would raise current allowance prices and limit future price increases, thereby smoothing out price fluctuations over time
most favored nation
an element of an international commercial treaty in which the signatories agree to accord each other the same favorable terms that are offered in agreements with any other nation
discount rate
an interest rate used in deriving present value and other financial calculations
tax incidence
analysis of how a tax affects the distribution of welfare in society and in particular who bears the burden of the tax
emission reduction credits
are earned whenever a polluter reduces emissions below the level required by law gives the owner the right to emit one ton per year of the stated pollutant while the ERC is valid
Social capital
as the concept is used by sociologist James Coleman and the political scientist Robert Putnam, it refers to the stock of "civic virtues" and networks of civic engagement, involvement, reciprocity norms, trust volunteerism, and sharing essential to democratic communities
Smart grid system
can be used to adjust load (energy demand) to fluctuations in energy generation (supply) using smart home controllers that shut down devices based on hig real-time prices. Can potentially accomodate a higher proportion of intermittent renewables (e.g., solar, wind). Does not assign a price to greenhouse gas emissions
Loan programs
can help promote capital investment in renewable energy or energy efficiency; they make sense when private lenders are unwilling to extend loans
Renewable portfolio standard
can indirectly contribute to reduced greenhouse gas emissions by mandating that a minimum percentage of electricity come from qualified renewable sources
Tax credits
commonly used in the United States and create incentives that are similar to rebates or subsidies
Compensation ratio (or functional equivalency ratio)
determines the number of created or restored wetland acres necessary to mitigate for the loss of one acre of natural wetland Determined on a case-by case basis and typically more than one acre of credit is required for each acre of lost wetland. proper ratio is based on the functional capacity of the impacted wetland along with a weighting factor for the relative importance of each function
three pillars of sustainability
economy, democracy (community), and environment
offsets
emission reduction projects undertaken at sources not covered by a cap-and-trade program. An offset mechanism allows regulated firms to offset their emissions by purchasing emission reduction credits generated through projects not covered by the cap. Offsets lower the overall cost of complying with the cap by bringing in new, lower-cost emission reduction opportunities
ejido
farm cooperative program, which redistributed much of the country's land from the wealthy landholders
Economic systems featuring highly unequal distributions of wealth and income:
frequently result in the political disenfranchisement of the poor, which is inconsistent with the requirement for democratic process in a sustainable society.
Remittance
funds forwarded from one person to another. In the context of migrant workers, remittances are funds that usually flow from migrants back home to help support dependent family members
Command-and-control regulation
government regulation that specifies how pollution is to be reduced, oftentimes through the application of uniform standards for firms.
renewable energy credits
green tags or tradable renewable certificates represent proof that one megawatt-hour of electricity was generated from an eligible renewable energy resource incentivize investment in renewable energy by providing an additional payment for electricity generated from qualified renewable sources
voluntary offsets
greenhouse gas reductions that cannot be used to comply with mandatory reduction obligations, and are traded in markets such as the Chicago Climate Exchange and a less organized over-the-counter (OTC) market.
Benefits of command and control
have fewer political hurdles, easier to implement. does not directly tax or otherwise assign a price to pollution. Moreover, many people do not pursue highly cost effective voluntary measures that are in their own best interest, such as for energy efficiency, which provides another argument for standards
Environmental Kuznets Curve (EKC)
hypothesized relationship between per-capita income and the intensity of resource usage and/or pollution emissions. Hold that resource depletion or pollution emissions intensity first increases and then eventually declines as per-capita GDP increases, and thus has an inverted U-shape
Lorenz Curve
illustrates income inequality in a population. Constructed on a diagram where the X axis represents the percentage of people in a population, arrayed from lowest to highest income, while the Y axis represents the percentage of the group's total income received by each percentile of the population arrayed on the X axis. If there were perfect income equality in the population, then the Lorenz curve would be a 45 degree straight line. With substantiated inequality, the Lorenz curve takes the shape of a parabola.
equimarginal principle
in any optimization process involving allocation among alternatives, an optimal allocation occurs where the relevant marginal values of the alternatives are equal
time inconsistency
in economics, a situation in which the preferences of policymakers (or society) change over time such that the preferred policy at one point in time is inconsistent with what is preferred at another point in time
safety valve
in the context of a cap-and-trade program, a safety valve increases the supply of allowances when a sharp increase in demand creates a price spike. Safety valves that set an effective allowance price ceiling are designed as cost-containment mechanisms. When the price ceiling is reached, the cap-and-trade program acts like a pollution tax
pure rate of time preference
in the context of an individual's decision regarding when to consume a good or service, the pure rate of time preference is the rate at which the individual discounts future utility relative to current utility
leakage
in the context of pollution regulation, leakage refers to firms moving production away from the regulated area and exporting goods back into the regulated area
pattern of trade
in the context of trade, the pattern of trade describes which trading party produces a category of good or service sold to another trading party
Exploitation
is more likely to result when there is a substantial asymmetry in local power and a failure to recognize local property rights regimes and the right to local self-governance.
technology-based standards
mandate certain production technologies or equipment that firms must use in order to comply with environmental regulation.
performance-based standards
mandate uniform emissions standard for all regulated firms, but unlike with technology-based standards, firms are given some choice over how the target is actually met
food insecurity
may refer to the instability of national or regional food supplies over time, or the inability of individuals or households to secure adequate food
national treatment
nondiscriminatory trade policy commitment implying that a government cannot treat foreign exporting firms any less favorably than its own domestic firms
Rebate programs
oftentimes funded by public goods charges to energy consumers and serve as a subsidy for qualified renewable energy-efficient investments
Limits (Bruntland Commission)
on the ability of the environment to meet present and future needs
Tradable allowance systems
one type of market-based instrument that is embedded in the structure of an overall emissions reduction program, but which allows the degree of abatement to vary across sources in a manner that reduces overall compliance costs. They regulate the quantity of emissions but do not force the use of a particular technology or mandate a uniform performance standard.
law of comparative advantage
originally developed by david ricardo, this law argues that countries specialize in those productive activities where their opportunity cost is lower than that of the other potential trading partners
chermatistics
process of managing economic affairs in such a way as to maximize the value of the decision maker's financial wealth as measured in money
ecolabels
programs designed to inform potential consumers of the contents or ingredients of a good, or the process and production methods used to produce a good. Ecolabels are most effective when an independent third party agency established the standards and evaluates the extent to which products adhere to those standards. Examples include certifications to the organic food and clothing, "fair trade" coffee, and sustainably harvested lumber and wood products
Subsidies
provide an incentive to increase that which is being subsidized. Can be used to promote renewable energy or energy efficiency by incentivizing R&D, capital investment, or ongoing production or consumption. Does not assign a price to greenhouse gas emissions
oikonomia
refers to a household management, which in people than we associate with modern households, and elements of a multi-generational perspective
dematerialization
refers to a process of reducing the thorughhput of physical resources and energy required to produce a given dollar of gross domestic product
environmental taxes
regulate the price of emissions and give firms an incentive to reduce their tax liability by reducing their emissions, thus reducing emissions indirectly. pollution taxes approximate the marginal social cost of production and make cleaner alternative technologies more price competitive create a dynamic incentive for research and development in ways to reduce the cost of cleaner technologies
Incentive Regulation
regulatory schemes that use prices, taxes, subsidies, and other instruments to align individual incentives with the goals of public policy. This form of regulation controls pollution indirectly through incentives rather than by way of direct controls such as emissions caps and technology-forcing rules
Article XX of GATT
shall not be construed as preventing the adoption or enforcement by any contracting party of measures 1) necessary to protect human, animal, or plant life or health 2) relating to the conservation of exhaustible natural resources, if such measures are made effective in conjunction with restrictions on domestic production
double dividend
society receives the environmental improvement and the revenue-recycling effect
acid rain
sulfur dioxide and nitrogen oxide emissions react with water droplets oxygen and various oxidants in the atmosphere usually in cloud layers to form solutions of sulfuric and nitric acid. Rainwater, snow, fog, and other forms of precipitation bring these acidic solutions into soil, streams, lakes and rivers, lowering the pH of these soils and water bodies and damaging terrestrial and aquatic ecosystems
Slum
synonymous with shantytown, informal settlement, or squatter housing, a slum refers to a community in which residents lack one or more of the following: durable housing, sufficient living area, access to improved water, access to sanitation,and secure land tenure
Urban planning
that clusters housing and commercial development near public transit corridors can reduce greenhouse gas emissions by reducing the demand for transportation fuel
"Single user" wetlands mitigation banks
the developer banks its own credits
Needs (Bruntland Commission)
the essential needs of the world's poor, which are seen as having overriding priority
thoroughput
the flow of materials through an economy, starting with raw materials inputs, followed by their conversion into products and services, and ultimately their transformation into wastes of various kinds
Revenue recycling effect
the gain from this can offset some of the economic costs of environmental regulation. Revenue recycling results in a double dividend
opportunity cost of capital
the opportunity cost of a firm's capital investment is the risk-adjusted return that could be earned by investing the money in some other income-generating asset, like stocks, bonds, or alternative projects.
relative price
the price of one thing (usually a good) in terms of another in a barter transaction
social rate of time preference
the rate at which society is willing to substitute present for future consumption of natural resources. A common proxy measure is the rate of productivity growth in an economy, based on the idea that productivity growth is the opportunity cost of, say, investment in ecological restoration
economic growth
the rate of increase in real (inflation-adjusted) gross domestic product (GDP)
dependency ratio
the ratio of the number of dependents (younger than 15 or the older than 64) to the number of working-age people (age 15-64) in a population
ecological tax reform
the reform of public finance in which taxes are shifted from productive activities such as income and employment to destructive activities such as pollution emissions and the depletion of natural resources
revenue recycling
the revenue from a pollution tax can be used to cut other distorting taxes such as social security taxes and corporate income taxes. Reducing these taxes increases the level of employment and investment and thereby produces an economic gain. This gain is called the revenue-recycling effect.
tax base
the set of resources that is available for taxation
poverty
the state of being physiologically, economically, or socially deprived of the circumstances required to meet basic needs, and lacking access to the resources necessary to improve that situation
natural capital
the stock of natural resources, together with the components and the structural relationships in Earth's ecosystems, which taken together serve as the foundation for life on Earth. From the stock of natural capital flows the annual harvest of natural resources,ecosystem services, sink functions, and other gifts of nature
microfinance
the supply of relatively small loans and other basic financial services to poor and unempowered people who lack access to conventional banking services. Grameen-style microcredit oftentimes takes the form of revolving credit provided to small groups, with the social cohesion of the group substitutin for an absence of collateral
total fertility rate
the total number of children the average woman in a population is likely to have, based on current birth rates, throughout her reproductive lifetime
demographic transition
the transition from high birth rates and death rates to low birth and death rates that occurs as a result of the economic and social development of a country from a traditional agrarian society to a modern post-industrial economy
Without financial incentives, ______________
these ecosystem services may be lost as privately owned lands are sold or converted to development
land tenure
traditional or customary institutions governing land use or occupancy, applying to individuals and groups. Standing in contrast to "Western" property rights systems that commodity land through ownership and the right of alienation. May be formal and officially recognized, or informal and accepted as an unspoken long-term customary practice
