Resource and Environmental Economics

The following sections are included:

• Preface

• Contents

The following sections are included:

• Introduction

• How are the Subjects of Economics, Natural Resource Economics, Environmental Economics and Ecological Economics Related to One Another?
  • The subject matter of economics
  • The nature and coverage of natural resource economics, environmental economics and ecological economics

• Further Observations on the Development of Economic Thought about the Significance of Natural Resources and Environmental Conditions
  • Changing emphasis on the relevance of natural resources for economic growth and scarcity
  • Changing emphasis on the significance of material versus nonmaterial goods for economic welfare

• Notes on the Coverage in this Book of Modern Issues in Resource and Environmental Economics

• Concluding Comments

• Keywords

• Questions for Review and Discussion

• Readings and References

The following sections are included:

• Introduction

• Neoclassical Economics and Environmental and Resource Economics

• New Institutional Economics

• Behavioral and Psychological Economics

• Conventional (Old) Institutional Economics

• The Austrian School of Economics

• Game Theory and Some of Its Applications to Environmental Conflict
  • A prisoners' dilemma problem
  • A game involving a battle of the sexes — further application
  • Games against nature and environmental outcomes

• Evolution, Coevolution and Limits to Economic Growth Imposed by Natural Resource and Environmental Constraints
  • Evolutionary economics and the environment
  • Coevolution of economic practices, social systems and environmental conditions
  • Limits to economic growth

• Concluding Comments

• Keywords

• Questions for Review and Discussion

• Readings and References

The following sections are included:

• Introduction

• Identifying Economic Failures and Measuring Economic Loss
  • Pareto optimality
  • Taking account of future economic scarcity
  • Pareto's criterion and the criterion of a potential Paretian improvement

• Markets and Economic Failure
  • Economic failure generally
  • Externalities, particularly environmental spillovers
  • Uncertainty and market failure
  • Public goods, mixed goods and quasi-public goods
  • Open-access commodities and those for which there is excludability but no rivalry
  • Monopolies

• Political and Administrative Mechanisms and Economic Failures
  • Failure of majority voting to bring about a Paretian optimum
  • Special interest pressure groups
  • Prevalence of myopic and reactive rather than pro-active behavior by governments
  • Failures in public administration

• Conclusions

• Keywords

• Questions for Review and Discussion

• Readings and References

The following sections are included:

• Introduction: General Views about Property Rights, Justice and Economic Efficiency

• Private Property Rights and Other Forms of Property Rights

• Private Property Rights and the Efficient Operation of Market Systems

• The Economics of Creating Private Property

• Common Property

• Open-Access Resources
  • The nature of open-access resources
  • Inefficiency of open-access resource use — resource misallocation
  • Failure to achieve adequate conservation of natural resources when there is open-access
  • Perverse responses to market signals and biodiversity loss as a result of open-access
  • Another perspective on the over exploitation of natural resources when open-access occurs
  • Limitations in applying this model in less developed countries
  • Other economic failures associated with open-access resources

• The Taking of Property Rights and Natural Resource Interests

• Concluding Comments

• Keywords

• Questions for Review and Discussion

• Readings and References

The following sections are included:

• Introduction

• Taxes or Charges on Pollution Emissions and on Waste Disposal
  • A simple model
  • Limitations of the simple model and their policy consequences
    • Lack of attention to dynamics and user costs
    • External environmental impacts modeled as a global or localized pure public bad
    • Income distribution consequences of environmental regulation are not assessed
    • Uncertainty about the costs and benefits of environmental regulation and about how external economic effects should be evaluated
    • Government regulators may not always try to adopt efficient economic pricing of pollution emissions via taxes or charges and therefore, transaction costs of regulation could be high
    • A system of taxes or charges on adverse environmental externalities encourages research and innovations designed to reduce negative environmental spillovers
    • Government taxes or charges on pollution emissions may be inflexible

• Tradable Permit Systems for Pollution Emissions and Waste Disposal

• Subsidies for Pollution Reduction

• The Policy of Clearly Defining Property Rights Combined with Bargaining or the Legal Settlement of an Environmental Dispute

• Administrative Rules or Fiat as an Environmental Control Measure

• Zoning of Polluting Activities Having External Environmental Consequences
  • Introduction
  • Zoning of incompatible activities
  • Cases where external pollution damage depends only on the distance between emitters and potential receptors
  • Should polluting activities be concentrated by location or dispersed?
  • Geographical influences

• The Economic Incidence of Environmental Regulations
  • Introduction
  • Implications of the Pigovian approach to environmental policy
  • The incidence of non-Pigovian policies for environmental regulation

• Regulating the Use of Open-Access Resources
  • Introduction
  • Taxes and charges as a means to govern the use of shared natural resources
  • The use of tradable permits
  • Subsidies to refrain from resource use
  • The creation of private property rights
  • Administrative or communal rules
  • Zoning and shared natural resources

• Regulating the Use of Shared Natural Resources that Supply Mixed Goods

• Concluding Comments

• Keywords

• Questions for Review and Discussion

• Readings and References

The following sections are included:

• Introduction

• The Basic Ideas Behind Social Cost–Benefit Analysis
  • A simple illustration
  • Some complications

• Normative and Philosophical Matters as well as a Measurement Issue
  • Ethical and normative assumptions underlying economic valuation
  • A measurement issue

• Steps in Applying Social Cost–Benefit Analysis to the Valuation of Environmental Spillovers and to the Valuation of Natural Resources
  • Identifying and measuring impacts
  • Identifying the economic nature of the components of environmental spillovers and of natural resources
  • Confidence in estimates of economic value and sensitivity of returns

• Allowing for the Time Dimension in the Process of Valuation

• Cases in which Market-Based Valuation of Environmental Spillovers and Natural Resource Use is Possible
  • Simple market-based valuations
  • A more complicated case involving a change in the market price of a product adversely affected by an environmental externality
  • Valuing marketed natural resources that do not generate significant environmental spillovers

• Introduction to Methods of Valuing Nonmarketed Commodities

• The Travel Cost Method of Economic Valuation
  • Background about this method
  • Procedures for applying the travel cost method of valuation
  • Some limitations of the travel cost method

• Hedonic Pricing as a Valuation Method

• Contingent Valuation — A Stated Preference Approach
  • The basics of contingent valuation
  • Variations in procedures for estimating contingent values — single bids, multiple bids, bounded bids
  • Issues raised by procedures used to estimate contingent values

• Choice Modeling — Stated Preferences Based on Attributes or Characteristics of Commodities

• Other Evaluation and Valuation Methods
  • Multi-attribute choice models
  • Citizens' juries
  • Cost-effectiveness analysis
  • Cost of replacement of a natural resource as an evaluation technique

• Concluding Comments

• Keywords

• Questions for Review and Discussion

• Readings and References

The following sections are included:

• Introduction

• Why has Environmental and Economic Sustainability Become an Important Issue?
  • Human dependence on natural resources
  • Historical impacts of humans on natural environments and resources as a reason for concern
  • Interdependence between economic systems and natural resource systems
  • Environmental Kuznets curves
  • Export of polluting economic activities

• Types of Material Resources, Particularly Natural Resources, and Their Implications for Economic Sustainability
  • A classification of material resources
  • Biological resources and economic sustainability
  • Replenishable nonbiological natural resources and those not subject to significant depletion
  • Nonrenewable nonbiological resources which are depletable, for example, minerals
  • Physical man-made capital and human capital

• Microeconomic Phenomena Resulting in a Lack of Economic Sustainability

• Sustainable Development

• Concluding Comments

• Keywords

• Questions for Review and Discussion

• Readings and References

The following sections are included:

• Introduction

• General Impacts of Agricultural Development on the Environment and on the Availability of Natural Resources
  • Broad environmental concerns
  • Demand for agricultural production expected to increase substantially

• Market Failures Involving Agriculture and Their Implications for the Environment and Resource Use
  • Background
  • Environmental spillovers and agriculture
  • Use by agriculturalists of open-access natural resources
  • Consequences of agricultural development for the supply of commodities with public goods attributes

• Factors Leading to a Lack of Agricultural Sustainability
  • Market factors as a source of lack of agricultural sustainability
  • Lack of agricultural sustainability due to factors other than market failures

• Impacts of Agricultural Policies on the Environment and Natural-Resource Use
  • Adverse environmental externalities from agriculture and government subsidies for agricultural production
  • Favorable environmental spillovers from agriculture and public policy
  • Agricultural policy and the conservation of natural resources

• Concluding Comments

• Keywords

• Questions for Review and Discussion

• Readings and References

The following sections are included:

• Introduction

• Scarcity and the Demand for the Available Quantity of Freshwater

• Economic Failures in Allocating Scarce Water Resources
  • Background
  • The most economic allocation of water in any time period
  • The intertemporal allocation of water

• Mechanisms for the Management of the Available Quantity of Water
  • Background
  • Administrative control of the quantity of water used by different entities or for different purposes
  • Administered prices for water-use
  • Tradable permit systems for water-use

• Transboundary Use of Water

• Water for Nature Conservation and for Nonmarketed Uses

• Water Pollution and Water Quality
  • General aspects
  • Controlling water pollution and managing water quality

• The Economics of Investments to Supplement Available Water Supplies
  • General Aspects
  • Water recycling and desalinization
  • Diversion of water and the pooling of water resources
  • The provision of dams and weirs

• Concluding Comments

• Keywords

• Questions for Review and Discussion

• Readings and References

The following sections are included:

• An Introduction to the Relationship between Biodiversity and Economics

• The Concept of Biodiversity and the Measurement of Biodiversity

• Why Does Biodiversity have Economic Value?

• Factors Causing Changes in Biodiversity
  • General aspects
  • Nonanthropogenic causes of alterations in biodiversity
  • Anthropogenic (mainly economic) impacts on the biological diversity of wild organisms
  • Anthropogenic impacts on the biodiversity of cultured organisms

• Policies to Promote Biodiversity Conservation
  • An overview
  • Restriction of market operations as a conservation measure
  • Encouraging market operations in order to conserve species
  • Measures designed to make biodiversity conservation independent of market forces
  • An overall perspective

• Human Development of the Genetic Stock Including Genetically Engineered Organisms
  • General features
  • Property rights in genetic material and in methods of engineering genetic material

• Concluding Observations

• Keywords

• Questions for Review and Discussion

• Readings and References

The following sections are included:

• Introduction

• Sources of Energy Supply and Issues Involved in Managing this Supply
  • The basics
  • The composition of energy supplies used by humans in electricity and heat production and consumption
  • Some of the issues involved in managing energy supplies

• Global Reduction in Air Quality — Ozone Layer Depletion and Global Warming
  • General observations
  • Do global reductions in air quality due to human activity provide incentives for collective regulatory action?
  • Ozone layer depletion
  • Global warming — its basic causes and its predicted consequences

• The Economic Impacts of Global Warming and Policies to Address It
  • Estimating the economic costs of global warming and the net benefits of controlling it
  • International agreements and global warming

• Economic Methods of Regulating Greenhouse Gas Emissions and Global Warming
  • Mitigation versus adjustment and other general issues
  • Taxes on greenhouse gas emissions
  • Tradable permits for greenhouse gas emissions
  • Who pays for reductions in emissions of greenhouse gases?

• Local and Regional Air Pollution, Including Regional Transboundary Pollution
  • Background
  • Local air pollution
  • Regional air pollution including transboundary or transfrontier air pollution

• Concluding Comments

• Keywords

• Questions for Review and Discussion

• Readings and References

The following sections are included:

• Introduction

• Why should Wastes and Economic Products be Recycled? What Factors Influence the Extent of Recycling?
  • Reasons for recycling
  • A simple model of the private economics of recycling

• Adjusting the Simplified Recycling Model to Allow for Market Failures

• Some Additional Factors That Ought to Be Taken into Account in Modeling the Economics of Recycling
  • Introductory observations
  • Markets for recyclable wastes
  • Decisions of individuals about supplying wastes for recycling
  • Some additional factors that influence the extent of recycling

• The Management of the Disposal of Garbage (Trash) by Local Governments
  • Marginal cost pricing of garbage disposal
  • Limitations of the above model
  • Institutional measures to increase the economic efficiency of garbage disposal, for example, contracting out

• “Substitutes” for Recycling and Waste Creation

• Policy Perspectives
  • Some relevant observations
  • Why might consumers have limited control over the type and amount of wastes generated by their purchases?
  • To what extent should the producers of products be made responsible for the wastes generated by their products rather than consumers or other buyers of these products?

• Concluding Comments

• Keywords

• Questions for Review and Discussion

• Readings and References

The following sections are included:

• Introduction

• Basic Considerations in the Economic Assessment of Environmental Health Policies
  • The necessity of economic trade-offs
  • Factors that can be controlled to influence environmental health and their economic implications

• Economic Failures and Environmental Health
  • Environmental spillovers or externalities
  • Public goods or bads and environmental health
  • Ignorance, behavioral variations and public health concerns

• Production Functions, the Cost Effectiveness of Environmental Health Interventions and Maximization of Net Benefits
  • Single output–single variable input production functions
  • Isoquants — production functions involving multiple inputs
  • Isocosts
  • Cost effectiveness
  • Expansion paths, total costs and health benefits

• Assignment of Monetary Benefits to the Valuation of the Avoidance of Ill-Health
  • Monetary values facilitate social cost–benefit analysis
  • The economic value of expected longevity
  • The economic value of avoiding morbidity
  • Quality-adjusted-life years (QALYs)
  • Further evaluation considerations

• Chemical and Physical Substances in the Environment and the Economic Consequences of Their Health Impacts — Empirical Applications
  • The purpose of this section
  • Air quality in Los Angeles
  • The economic costs of air pollution in the USA
  • Pollution of water and air by the release of cadmium from a smelter in China
  • Water pollution in South Asia by arsenic
  • Additional observations on water quality and health

• Economic Considerations and Ecological and Biological Influences on Environmental Health
  • Background
  • Economic assessment of vaccination programs — existing analysis
  • A different possibility to the Brent model — a case in which eradication is an economic option
  • Adverse health externalities — excessive use of antibiotics and measures to reduce contagion of diseases

• Concluding Observations

• Keywords

• Questions for Review and Discussion

• Readings and References

The following sections are included:

• Index