Environmental Economics, Policy, and Law


Ecological Economics

Natural Resource

  • anything with potential use in creating ________ or giving satisfaction.

Renewable vs. Nonrenewable Resources

Nonrenewable resource

  • resources that cannot be _________ (in a human time scale) because they take long periods of time to generate by earth's geological development or they are _______: the minerals, fossil fuels and _______.
  • present supplies are becoming exhausted by human standards and will be gone.. soon. Yikes!

Renewable Resources

  • things that can be __________ or replaced (usually refers to energy resources) such as _________, biological organisms, fresh _________, fresh ______, wind, and used cooking oil!!!
  • But if we rip apart habitats we disrupt self renewing biological cycles. Yikes!

*Tragedy of the ______________*

  • Article written in 1968 by biologist Garret Hardin.
  • resources are being __________ or degraded because people care more about the interest of ____________ than they do about _________ interests. People who use or destroy more than their ______ share of common property.
  • Hardin believed there was a need for a _________ managed open access system. (ex. Native American Indians management of rice beds and hunting grounds, Maine lobster fisheries)
    • Communal resource management systems- resources managed by a community for long-term sustainability- can work IF collectively ___________ and community anticipates continually living on the land which will be then be passed onto their _________.


Classical Economics

  • The theory is built on the idea that a ________ ____________ market is the best method to govern our financial well-being... maybe.
  • Law of Supply and _________. As supply (how much product is available) increases its demand (the amount of product the consumers will buy) ________ and the price of the good also _________. As supply decreases, the demand _________ and its price __________. Kind of like a school dance when too many students of the same sex show up.
  • Market ______________ is when the demand for a good equals its supply. Supply and demand are __________ proportionate.



One problem with the global economy is that in the interest of lowering the cost of production of an item, companies purchase supplies and man power in the _________ cost location.

  • Outsourcing and the flattening of the world.

Marginal Costs

  • _________ costs- the costs paid to make a product or provide a service that does ______ change as production increases. For instance, the mortagage on a property.
  • _________ costs- costs that _________ as the number of products produced _________, such as for raw materials to manufacture a product.
  • _________ costs- the cost of making one __________ 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 ___________ for the consumer.


Natural Resource Management

    Cost __________ Analysis (CBA) compares the costs and benefits of a project over time. All the components are quantified and analyzed.

      • This concept is used to evaluate ________ projects to access the capital costs in order to gain benefits.
      • It assigns ________ to resources and evaluates whether the pollution cost of a project is "__________" the social benefits.
      • Legislators use this process to determine whether a given undertaking is a "good idea" by how cost ________ it is and what benefits it will create vs how much pollution damage for instance.


Internal vs. External costs

  • Internal Costs- ___________ costs that are experienced to manufacture a product.
  • External Costs- costs to _________ or society that are not experienced by the company and are _______ 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. ___________ is one way to INTERNALIZE the external costs. ex. Erin Brockovich. So are laws and _________. 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 _______ Cost. Also called the full-cost analysis or true-cost pricing.
    • Nature is often seen as a negative externality by business- meaning the toll on nature by development and industry is _________ priced into the value of the product made.

    Often the true cost of using environmental resources are "_____________" 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.

    The true value of the health of natural resources such as biodiversity, human capital (fair wages) or social capital (loss of indigenous societies) are not considered ______________.