Term
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Definition
| not having enough of something |
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Term
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Definition
| the opportunity cost of using resources (land, labour, capital, natural resources) in a particular way s the highest valued alternative use to which those resources might have been put and thus which society forgoes by using the resources in the specified way. opportunity costs include monetary costs (e.g. materials, energy) and non-monetary costs (e.g. the value of one's time spent in the activity in question instead of doing something else). the non-monetary costs must be converted to dollar values by imputing a price to the activity. this is called shadow pricing. social opportunity costs are the opportunity costs incurred by a society regardless of to who they accrue. |
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Term
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Definition
| the incremental benefits (in dollar terms) of increasing some good or service by one unit. marginal benefits are also the derivative of a total benefit function. |
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Term
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Definition
| the incremental costs (in dollar terms) of increasing the output of a good or service by one unit. marginal costs are also the derivative of a total cost function. |
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Term
| equity (or distributional) issues |
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Definition
| concern about how a public policy or other economic decision affects people with different levels of income: examining who gets the benefits and who pays the costs. equity may be viewed horizontally- ensuring the people with the same income levels are treated equivalently by a policy, or vertically- examining how people with different levels of income are affected by the policy |
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Term
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Definition
| an externality (or external effect) exists when markets fail to incorporate the social costs or benefits a person or firm's actions have on others. externalities arise because of open access to environmental resources and the characteristic of joint consumption. an external cost in the case of the environment is damage resulting from environmental impacts that are not taken into account by the firms, public agencies, or consumers whose decisions produce them. an example is waste water. external benefits are the benefits accruing to people other than the direct buyers or recipients of a good. the classic example is a public good (such as air quality). Once it is made available to one person, all people in the community automatically receive the same level. |
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Term
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Definition
| a property right gives the holder the right to do certain things with a tangible asset. In enviro econ, the asset is typically a type of natural resource- land, water, or the atmosphere. characteristics of property rights include whether or not they are exclusive, transferable, divisible, and protected by law. a private prop. right is exclusive ("i own this land and you do not") and typically transferable (to others). an example of a private prop. right is one's title to land. common property means that a group of individuals collectively has the right to exclusive use of a natural resource. the lack of prop. rights is called open access and it means that no one has exclusive right to the natural resource- no one can be excluded from using that resource (e.g. the atmosphere) |
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Term
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Definition
| private costs are the market value of labour, raw materials, machinery, energy, and so on that firms incur in producing goods and services. they are the costs that appear of a profit-and-loss statement of the firm. |
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Term
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Definition
| social costs are the costs that occur to society as a result of production and consumption of goods and services. the social costs of interest to enviro econ are pollutants and other forms of enviro degradation that are the by-products of production and consumption activities of society |
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Term
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Definition
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Term
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Definition
| the study and modelling of the linkages between economic and ecological systems |
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Term
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Definition
| a broad definition of capital that includes everything the economy can invest in- physical capital to produce goods and services, education, infrastructure, and renewable & non-renewable natural resources including environmental resources |
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Term
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Definition
| a sustainable economy is one in which investment in social capital allows the economy to grow so that people are at least as well off in the future as they are in the present, while ensuring the health of ecological systems |
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Term
| production possibility frontier (PPF) |
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Definition
| a production possibility frontier is a graphical depiction of the choice faced by a community between two desirable alternatives. these alternatives may be two different goods. it is used to illustrate the trade-offs between having more market goods vs. higher levels of enviro quality. because of resource scarcity the community can have more of one thing only by giving some of the other. |
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Term
| community indifference curve (CIC) |
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Definition
| the choice society makes on alternative bundles of goods available in the economy. each indifference curve represents a constant level of utility for combinations of commodity bundles. one of these bundles may be environmental quality |
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Term
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Definition
| if a person's income rises by one percent, they will consume at least one percent more of an income elastic good. consumption of the good rises at least proportionately with increases in income. |
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Term
| environmental kuzents curve (EKC) |
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Definition
| a statistical relationship between an indicator of environmental quality and gross domestic product. the relationship can be an inverted-U shape that indicates that as per capita income as a country grow, environmental quality may initially decline, but as per capita income rises further, environmental quality begins to increase reflecting a country's growing demand for higher levels of enviro quality |
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Term
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Definition
| a normal good is one whose consumption rises when income rises. it is a good that has a positive income elasticity of demand. |
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Term
| pollution haven (& halos) |
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Definition
| a pollution haven is a region or country where regulators deliberately have lax enviro policies to try to attract industry to their region. a pollution halo is just the opposite: a high level of enviro quality is desired in the region to attract people and industry to the region. |
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Term
| cost effectiveness (analysis) |
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Definition
| a cost effectiveness analysis takes a policy target as given then examines the total costs of different alternatives that reach the target. a policy is cost effective if it achieves the target at the lowest possible costs to society (i.e. it satisfies the equi-marginal principle) |
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Term
| cost effectiveness (analysis) |
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Definition
| a cost effectiveness analysis takes a policy target as given then examines the total costs of different alternatives that reach the target. a policy is cost effective if it achieves the target at the lowest possible costs to society (i.e. it satisfies the equi-marginal principle) |
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