Environmental Economics, Policy, and Law
Ecological Economics Natural Resource Nonrenewable resource -present supplies are becoming exhausted by human standards and will be gone.. soon. Yikes! Renewable Resources -but if we rip apart habitats we disrupt self renewing biological cycles. Yikes!
-Article written in 1968 by biologist Garret Hardin. -resources are being destroyed or degraded because people care
more about the interest of -Hardin described an open access system- no rules to manage
resource use. (ex. Native American -communal resource management systems- resources managed by a community for long-term sustainability- can work IF collectively enforced and community anticipates continually living on the land which will be then be passed onto their children.
Classical Economics The theory is built on the idea that a free capitalistic market is the best method to govern our financial well-being... maybe. Law of Supply and Demand. As supply (how much product is available) increases its demand (the amount of product the consumers will buy) decreases and the price of the good also decreases. As supply decreases, the demand increases and its price increases. Kind of like a school dance when too many students of the same sex show up. Market equilibrium is when the demand for a good equals its supply. Supply and demand are inversely proportionate. GNP- Gross National Product. A nations' wealth is measured by the sum total of all the goods and services it provides. GDP- Gross Domestic Product. The amount of goods and services produced only within its national boundaries within a year.
Natural Resource Management Cost Benefit Analysis (CBA) Often the true cost of using environmental resources are "externalized" meaning the price of permanently distroying nature and polluting our air, water and soils are not taken into consideration when goods are valued on the market. Note with neither of the above calculations are the natural resources (biodiversity, fresh air), human capital (fair wages) or social capital (indigenous societies) taken into consideration.
Marginal Costs Fixed costs- the costs paid to make a product or provide a service that does not change as production increases. For instance, the mortagage on a property. Variable costs- costs that increase as the number of products produced increases, such as for raw materials to manufacture a product. Marginal costs- the cost of making one additional unit of product or service. The total cost per item when one more item is produced. The marginal cost increases as more units are produced, but as more products are made the cost goes down for the consumer. Margin of diminishing returns- additional benefits gained by the buyer by procuring one more unit of product or service. ex. eating TWO bowls of ice cream or having two oil changes back to back. What is the added value of having that second helping or service? Internal Costs- immediate costs that are experienced to manufacture a product. External Costs- costs to people or society that are not experienced by the company and are NOT passed down on to the consumer directly. External costs are felt by someone but NOT those that turn the resources into a profit or those that establish the price of the product. Ligitation is one way to INTERNALIZE the external costs. ex. Erin Brockovich. So are laws and taxes. ex. Surface mining control and reclamation act (SMCRA) and cigarette taxes. To internalize external costs means that the consumer is paying for the full cost of the product or the TRUE Cost. Also called the full-cost analysis or true-cost pricing.
Pollution Tax Green Business -new approach to business to how we can achieve both environmental protection and social welfare. -promotes eco-efficiency, clean production pollution prevention,
industrial ecology, natural Green Consumers |