Environmental Economics for Non-Economists

The following sections are included:

• Foreword

• Preface

• CONTENTS

The following sections are included:

• The Role of Environmental Economics

• Defining the Natural Environment

• Overview of This Book

• References

The following sections are included:

• Objectives

• Introduction

• What is Ecological Economics?

• Economy-Environment Systems
  • A Traditional Economic System
  • An Ecosystem
  • An Economy-Environment System

• Thermodynamics and the Environment
  • The First Law of Thermodynamics
  • The Second Law of Thermodynamics
  • Interpretations of the Second Law of Thermodynamics
  • Implications of the Laws of Thermodynamics for the Economy-Environment System
    • Implications of the First Law
    • Implications of the Second Law

• Modelling Economy-Environment Interactions

• Summary

• Review Questions

• Exercises

• References

The following sections are included:

• Objectives

• Introduction

• The Competitive Market

• Consumer Behaviour and Demand
  • The Individual Demand Curve
  • The Concept of Elasticity
  • Market (Industry) Demand

• Producer Behaviour and Supply

• Market Equilibrium in the Competitive Market

• Consumer and Producer Surplus

• Applications of the Competitive Model
  • The Socially Optimal Level of Forestry
  • The Effect of Pollution Abatement Costs on Employment

• Summary

• Review Questions

• Exercises

• Further Reading

The following sections are included:

• Objectives

• Introduction

• Types of Market Failure
  • Lack of or Weak Property Rights
    • Characteristics of property rights
    • Property rights regimes
  • Public Goods
    • Private and pure public goods
      • Open access and common property goods
      • Semi (or quasi) public goods
      • Congestion goods
  • Market Demand for a Public Good

• Externalities
  • Definition of an Externality
  • Causes of Externalities
  • Classification of Externalities
    • Relevant externalities
    • Pareto relevant externalities
    • Static and dynamic externalities
    • Pecuniary externalities

• Type of Market Structure
  • Resource Allocation in a Perfectly Competitive Market
  • Resource Allocation in a Monopoly

• Approaches to the Solution of Environmental Pollution Problems
  • The Market or Coasian Solution
    • Case 1: The community has the property rights
    • Case 2: The factory has the property rights
    • Limitations of the market solution
      • Zero transactions costs
      • Well-defined property rights
      • Perfect competition
      • Income effects
      • Free-rider effects

• Government Policies
  • Command-and- Control Approaches
  • Market-Based Instruments (MBIs)
    • Charges
    • A charge
    • Subsidies
    • Marketable permits
    • Other MBIs
      • Deposit-refund schemes
      • Ecolabelling and performance rating
  • Other Pollution Abatement Instruments
    • Voluntary incentives
    • Liability legislation
    • Education
    • Zoning, fines and bans

• Summary

• Review Questions

• Exercises

• References

The following sections are included:

• Objectives

• Introduction

• Types of Economic Values

• Non-Market Valuation Methods
  • Stated Preference Methods
    • The contingent valuation method
      • Setting up the hypothetical market
      • Obtaining the bids
      • Estimating mean WTP and/or WTA
      • Estimating the bid (demand) curves
    • Choice experiments
      • Conjoint analysis
      • Choice modelling
      • Biases Associated with Stated Preference Methods
      • Summary of Stated Preference Methods
  • Revealed Preference Methods
    • Travel Cost Method (TCM)
      • Limitations of the TCM
      • Summary of TCM
    • The hedonic price method
      • Summary of the HPM
    • Market value method
    • Market cost method
      • Limitations of Market and Cost Methods
    • Benefit transfer method

• Summary

• Review Questions

• Exercises

• References

The following sections are included:

• Objectives

• Introduction

• Utility, Benefits and Costs
  • Willingness-to-Pay and Consumers Surplus as a Measure of Benefits
  • The Concept of ‘Cost’ in CBA
  • The Concept of Net Social Benefits

• Defining Objectives and Project Scope

• Identifying and Screening the Alternatives

• Identifying the Benefits and Costs
  • Identifying Costs and Benefits in Case Study 1: The Bintuli Wastewater Treatment Project

• Valuing the Costs and Benefits
  • Valuing the Costs
    • Residual (or salvage) values
    • Calculation of residual values
      • The linear method
    • Land and pre-existing buildings and plant
    • Staged construction
    • Working capital
    • Operating costs
    • Implicit costs
    • Valuing costs in Case Study 1: The Bintuli Wastewater Treatment Project
  • Valuing the Benefits
    • User charges
    • Estimation of the economic benefits

• Calculating Discounted Cash Flows and Project Performance Criteria
  • Choice of Discount Rate
  • Period of Analysis
  • Choice of Project Performance Criteria
    • Calculating DCFs and project performance criteria for Case Study 1, Bintuli Wastewater Treatment Project
      • Incremental net benefits

• Concepts of Risk and Uncertainty

• Sensitivity Analysis
  • Break-Even Analysis
  • Switching (Cross-Over) Values
  • Conducting Sensitivity Analysis for Case Study 1, Bintuli Wastewater Treatment Project

• Risk Analysis
  • Conducting Risk Analysis for Case Study 1, Bintuli Wastewater Treatment Project
    • Financial risks
    • Economic risks
    • Environmental risks
    • Conducting the risk analysis
    • Recommendations

• Summary

• Review Questions

• Exercises

• References

• Appendix 6.1 An Application of Cost-Benefit Analysis (with Risk Analysis) to a Climate Change Abatement Strategy
  • Introduction
  • Analysis of the Climate Change Abatement Project Using CBA Without Incorporating Risk
  • Incorporating Risk into the Cost-Benefit Analysis of the Climate Change Abatement Project

• References

The following sections are included:

• Objectives

• Introduction

• Cost Effectiveness Analysis
  • Examples of Cost Effectiveness Analysis
  • Conducting a Cost-Effectiveness Analysis
    • Project definition
    • Choice of method of analysis
    • Identification and valuation of costs
    • Discounted cash flow analysis
    • Calculation of measures of effectiveness
    • Sensitivity analysis
  • Example of a CEA Application: The Cooloombah Wastewater Project
    • Background
    • Project definition
    • Choice of method of analysis
    • Identification and valuation of costs and benefits
    • Discounted cash flow analysis
    • Calculation of measures of effectiveness
    • Recommendation

• Impact Analysis
  • Example of an Impact Analysis in Case Study 1, Bintuli Wastewater Treatment Project
    • Environmental impacts
      • Water quality
      • Flora and fauna
      • Noise and air pollution
    • Economic impacts
    • Social impacts
      • Displacement
      • Gender
      • Cultural

• Stakeholder Analysis
  • Steps in Stakeholder Analysis
    • Identifying the objective of the analysis
    • Developing an understanding of the system and its decision makers
    • Identifying the stakeholders
    • Investigating stakeholder interests
    • Identifying patterns and contexts of interaction between stakeholders

• Summary

• Review Questions

• Exercises

• References

The following sections are included:

• Objectives

• Introduction

• The Multi-Criteria Analysis Approach

• Steps in the MCA Process
  • Identifying the Problem to be Addressed
  • Identifying the Alternatives
  • Identifying the Criteria
  • Scoring the Alternatives in Relation to the Criteria
  • Weighting the Scores According to the Weights Assigned to the Criteria
  • Evaluating the Alternatives
    • Aggregation techniques
    • Lexicographic technique
    • Graphical technique
    • Concensus-maximising technique
    • Concordance methods
    • Multi-attribute utility model
  • Sensitivity and Risk Analyses
  • Ranking the Alternatives and Making a Recommendation

• Limitations of MCA

• Case Study: Application of MCA to Resource Management in Cattle Creek Catchment, Far North Queensland
  • The Problem
  • The MCA Approach
    • Identification of alternatives and criteria
    • Scoring the alternatives
    • Weighting the scores according to the preferences of the stakeholders
    • Evaluating the alternatives
    • Ranking alternatives when the criteria are weighted
  • Conclusion

• Summary

• Review Questions

• Exercises

• References

The following sections are included:

• Objectives

• Introduction

• Growth Pessimists and Optimists
  • The Growth Pessimists
  • The Growth Optimists

• World Population Growth and Trends

• Population Growth and the Environment
  • Population Growth and Land Degradation
    • Direct causes of land degradation
      • Deforestation
      • Inappropriate land management practices
      • Overgrazing
    • Indirect causes of land degradation
      • System of land tenure
      • Population growth and distribution
      • Poverty

• Gender Issues

• Policy Responses to the Population Problem
  • Public Health
  • Education
  • Status of Women
  • Poverty and Income Inequality

• Summary

• Review Questions

• Exercises

• References

The following sections are included:

• Objectives

• Introduction

• Economic and Environmental Trends
  • Economic Trends
  • Environmental Trends

• Energy Consumption, Economic Growth and Welfare

• The Relationship Between Trade and the Environment
  • Theories Explaining the Environmental Kuznets Curve
    • Overlapping-generations models
    • Production/consumption models
    • Political economy models
  • Review of Empirical EKC Studies
  • A Critique of the EKC

• Policy Implications
  • National and Local Level Policy Response
    • Voluntary agreements
    • Voluntary, incentive and community-assistance programs
  • Global Policy Response
    • International financing of conservation projects
    • Debt-for-nature swaps

• Summary

• Review Questions

• Exercises

• References

The following sections are included:

• Objectives

• Introduction

• Defining Sustainable Development

• Conditions for Sustainable Development

• Measuring Sustainable Development
  • The Case for ‘Green’ National Accounting
    • A New System of Environmental Accounting
  • The Uses of Environmental Accounting Data
  • The Limits of Green Accounting
  • The Need for a Broader Set of Indicators

• Operationalising the Concept of Sustainable Development
  • Restructuring Incentives
    • Expanding Market-Based Incentive Mechanisms
    • Increasing Monitoring and Enforcement
    • Increasing Community and Private Sector Participation
    • Increasing Education, Awareness and Training
  • Establishing a New System of Economic Analysis
    • The Safe Minimum Standard of Preservation

• Constraints to the Implementation of Sustainable Development
  • Constraints of Developing Countries
  • Constraints Typical of All Countries
    • Raising Awareness of Environmental Issues
    • Developing Institutional Capacity
    • Funding Constraints
    • Transferring Environmentally-Friendly Technologies

• Summary

• Review Questions

• Exercises

• References

The following sections are included:

• Introduction

• Policy Implications

• References

The following sections are included:

• Index