Environmental and Natural Resource Economics: A Contemporary Approach

by Harris, Jonathan M.

• ISBN13: 9780618133925
• ISBN10: 0618133925
• Edition: 1st
• Format: Paperback
• Copyright: 2002-03-22
• Publisher: South-Western College Pub

Summary

Environmental and Natural Resource Economics engages students in standard economic theory through the lens of environmental issues such as global climate change and overpopulation. This broad, balanced approach combines traditional microeconomic analysis with a detailed examination of macro-level ecological problems that require local, national, and global policy solutions.The Second Edition includes new appendices, updated case studies, and the inclusion of current economic data. Numerous examples, graphs, key terms, and end-of-chapter questions help students review and assimilate core concepts.

Table of Contents

Preface
PART ONE Introduction: The Economy and the Environment	1	(34)
Changing Perspectives on the Environment	3	(14)
Economics and the Environment	3	(1)
Two Approaches	4	(2)
The Traditional Economic Approach	5	(1)
The Ecological Economics Approach	5	(1)
A Framework for Understanding the Ecological Perspective	6	(3)
The Circular Flow Model	6	(2)
Points of Contact Between Economic and Ecological Flows	8	(1)
The Economic Valuation Approach	9	(1)
The Ecological Economics Approach	9	(1)
Environmental Microeconomics and Macroeconomics	9	(4)
Microeconomic and Valuation Techniques	10	(1)
Environmental Macroeconomics	11	(2)
Implications of Ecologically Oriented Economics	13	(1)
A Look Ahead	13	(4)
Summary	14	(1)
Key Terms and Concepts	14	(1)
Discussion Questions	15	(1)
References	15	(1)
Web Sites	16	(1)
Resources, Environment, and Economic Development	17	(18)
A Brief History of Economic Growth and the Environment	17	(3)
Measuring Growth Rates	18	(1)
Factors Essential to Economic Growth	18	(1)
Growth Optimists and Pessimists	19	(1)
The Limits to Growth Model	20	(2)
A Summary of Recent Growth	22	(1)
The Future of Economic Growth and the Environment	23	(5)
Population Growth	24	(1)
Rising Resource Use	25	(1)
Increasing Energy Use	26	(1)
Dwindling Resources	26	(1)
Pollution	27	(1)
An Ecological Approach to Economic Growth and the Environment	27	(1)
Sustainable Development	28	(7)
Sustainable Development Versus Standard Views of Economic Growth	28	(1)
Population and Sustainable Development	29	(1)
Agriculture and Sustainable Development	29	(1)
Energy and Sustainable Development	30	(1)
Sustainable Management for Natural Resources	30	(1)
Summary	31	(1)
Key Terms and Concepts	32	(1)
Discussion Questions	32	(1)
References	33	(1)
Web Sites	34	(1)
PART TWO Economic Analysis of Environmental Issues	35	(84)
The Theory of Environmental Externalities	37	(24)
External Costs and Benefits	37	(4)
Accounting for Environmental Costs	38	(2)
Internalizing Environmental Costs	40	(1)
Positive Externalities	41	(1)
Internalizing Environmental Benefits	41	(1)
The External Costs of Motor Vehicle Use	42	(3)
Welfare Analysis of Externalities	45	(3)
Welfare Analysis Without Externalities	46	(1)
Welfare Analysis with Externalities	46	(1)
Optimal Pollution	46	(2)
Property Rights and the Coase Theorem	48	(4)
Pigovian Tax	48	(1)
The Coase Theorem	48	(1)
Applying the Coase Theorem	49	(3)
Limitations of the Coase Theorem	52	(2)
The Free Rider Effect	53	(1)
The Holdout Effect	53	(1)
Public Choice Versus Private Choice	53	(1)
Property Rights and Environmental Regulation	54	(7)
The Coase Theorem and Equity	55	(1)
Summary	56	(1)
Key Terms and Concepts	57	(1)
Discussion Questions	58	(1)
Problems	58	(1)
References	59	(1)
Web Sites	60	(1)
Resource Allocation Over Time	61	(15)
Allocation of Nonrenewable Resources	61	(9)
Equilibrium in the Current Time Period	62	(1)
Balancing Present and Future Periods	63	(3)
Dynamic Equilibrium for Two Periods	66	(2)
User Costs and Resource Depletion	68	(2)
Hotelling's Rule and Time Discounting	70	(6)
Summary	73	(1)
Key Terms and Concepts	74	(1)
Discussion Questions	74	(1)
Problem	74	(1)
References	75	(1)
Web Sites	75	(1)
Common Property Resources and Public Goods	76	(17)
Common Property, Open-Access, and Property Rights	76	(6)
The Economics of a Fishery	77	(2)
Incentives for Overfishing	79	(2)
Policies for Fishery Management	81	(1)
The Environment as a Public Good	82	(6)
The Economics of Rainforest Conservation	84	(2)
Social Demand for Rainforest Preservation	86	(2)
The Global Commons	88	(5)
Summary	89	(1)
Key Terms and Concepts	90	(1)
Discussion Questions	90	(1)
Problems	91	(1)
References	92	(1)
Web Sites	92	(1)
Valuing the Environment	93	(26)
Cost-Benefit Analysis	93	(2)
Estimating Value	94	(1)
Techniques of Valuation	95	(3)
Contingent Valuation	95	(1)
Demand-Side Methods	96	(1)
Supply-Side Methods	97	(1)
Valuing Human Health and Life	98	(1)
Balancing Present and Future: The Discount Rate	99	(2)
Applying the Discount Rate	99	(2)
The Discount Rate	101	(3)
The Social Discount Rate	103	(1)
Dealing with Risk and Uncertainty	104	(3)
Defining Risk and Uncertainty	104	(1)
Calculating Expected Value	105	(2)
Comparing Costs and Benefits	107	(1)
Cost-Benefit Analysis of Arsenic in Drinking Water	108	(3)
Conclusion: How Useful Is Cost-Benefit Analysis?	111	(1)
Valuing the Global Ecosystem	112	(7)
The Positional Analysis Alternative	114	(1)
Summary	114	(1)
Key Terms and Concepts	115	(1)
Discussion Questions	116	(1)
Problem	116	(1)
References	117	(1)
Web Sites	118	(1)
PART THREE Ecological Economics and Environmental Accounting	119	(54)
Ecological Economics: Some Basic Concepts	121	(15)
Natural Capital	121	(3)
Accounting for Changes in Natural Capital	122	(1)
The Dynamics of Natural Capital	123	(1)
Issues of Macroeconomic Scale	124	(4)
Measuring the Relationship Between Economic and Ecological Systems	126	(2)
Long-Term Sustainability	128	(8)
Policy Choices and Discounting the Future	129	(2)
Complexity, Irreversibility, and the Precautionary Principle	131	(1)
Summary	131	(1)
Key Terms and Concepts	132	(1)
Discussion Questions	132	(1)
References	133	(2)
Web Sites	135	(1)
National Income and Environmental Accounting	136	(23)
Greening the National Income Accounts	136	(8)
Estimating Sustainable Economic Welfare	139	(5)
Green Accounting in the Philippines	144	(2)
Application of Environment and Resource Accounting	146	(3)
Measures of True Income	148	(1)
Measuring Well-Being: Social and Ecological Dimensions	149	(1)
Incorrect Accounting Leads to Incorrect Policies	150	(9)
Summary	153	(1)
Key Terms and Concepts	154	(1)
Discussion Questions	154	(1)
Problems	155	(1)
References	156	(2)
Web Sites	158	(1)
Modeling Economic and Ecological Systems	159	(14)
Energy and Resource Flow Analysis	159	(4)
Energy Flows and the Economic Production System	161	(2)
Input-Output Analysis	163	(3)
Modeling National and Global Systems	164	(2)
Economic and Ecological Modeling	166	(7)
Modeling Individual Processes	167	(1)
Modeling Complete Systems	168	(2)
Summary	170	(1)
Key Terms and Concepts	171	(1)
Discussion Questions	171	(1)
References	171	(1)
Web Sites	172	(1)
PART FOUR Population, Agriculture, and the Environment	173	(56)
Population and the Environment	175	(26)
The Dynamics of Population Growth	175	(8)
Predicting Future Population Growth	178	(5)
The Theory of Demographic Transition	183	(3)
Population Growth Impact	185	(1)
U.S. Population Continues to Grow	186	(1)
Population Growth and Economic Growth	187	(3)
Does Population Growth Promote or Retard Economic Growth?	188	(2)
Ecological Perspectives on Population Growth	190	(4)
The Impacts of Population, Affluence, and Technology	192	(2)
Humanity's Ecological Footprint	194	(2)
Population Policies for the Twenty-First Century	196	(5)
Summary	197	(1)
Key Terms and Concepts	198	(1)
Discussion Questions	198	(1)
References	199	(1)
Web Sites	200	(1)
Agriculture, Food, and Environment	201	(28)
Feeding the World: Population and Food Supply	201	(3)
Trends in Global Food Production	204	(5)
Land Use and Equity Issues	206	(3)
Projections for the Future	209	(4)
Future Yield Requirements	212	(1)
Agriculture's Impact on the Environment	213	(7)
Soil Erosion and Degradation	213	(1)
The Economics of Erosion and Erosion Control	214	(1)
Fertilizer Use	215	(1)
Environmental Effects of Fertilizer Use	216	(1)
Pesticide Use	217	(2)
Irrigation and Water Resources	219	(1)
Genetically Modified Foods: A Controversial Technology	220	(1)
Sustainable Agriculture for the Future	221	(8)
Policies for Sustainable Agriculture	223	(1)
Summary	224	(1)
Key Terms and Concepts	225	(1)
Discussion Questions	226	(1)
References	226	(2)
Web Sites	228	(1)
PART FIVE Energy and Resources	229	(96)
Resources: Scarcity and Abundance	231	(22)
The Supply of Nonrenewable Resources	231	(3)
Physical Supply and Economic Supply	232	(2)
Economic Theory of Nonrenewable Resource Use	234	(4)
Long-Term Trends in Nonrenewable Resource Use	236	(2)
Global Scarcity or Increasing Abundance?	238	(7)
Internalizing Environmental Costs of Resource Recovery	240	(5)
The Economics of Recycling	245	(8)
Policies to Promote Recycling	247	(2)
Summary	249	(1)
Key Terms and Concepts	250	(1)
Discussion Questions	251	(1)
References	251	(1)
Web Sites	252	(1)
Energy: The Great Transition	253	(24)
Energy and Economic Systems	253	(1)
Economic and Ecological Analyses of Energy	254	(4)
Economic Perspectives on Energy Supply	255	(2)
Economic and Thermodynamic Efficiency	257	(1)
Energy Trends and Projections	258	(8)
Patterns of Energy Use	259	(4)
The Future of World Oil Production	263	(3)
The Economics of Alternative Energy Futures	266	(3)
The Central Role of Energy Prices	267	(2)
Policies for Future Energy Development	269	(1)
Nuclear Power: Coming or Going?	270	(3)
Energy Policy Options for Developing Nations	272	(1)
Implicit Discount Rates and Energy Efficiency	273	(4)
Summary	273	(1)
Key Terms and Concepts	274	(1)
Discussion Questions	275	(1)
References	275	(1)
Web Sites	276	(1)
Renewable Resource Use: Fisheries	277	(21)
Principles of Renewable Resource Management	277	(2)
Ecological and Economic Analyses of Fisheries	279	(6)
Deriving an Economic Analysis from Biological Principles	281	(4)
The Economics of Fisheries in Practice	285	(2)
Policies for Sustainable Fisheries Management	287	(5)
Demand-Side Issues: Changing Consumption Patterns	289	(1)
Aquaculture: New Solutions, New Problems	290	(2)
Scientists Criticize Salmon Aquaculture	292	(6)
Summary	293	(1)
Key Terms and Concepts	294	(1)
Discussion Questions	294	(1)
Problems	295	(1)
References	296	(1)
Web Sites	297	(1)
Ecosystem Management: Forest and Water Systems	298	(27)
The Economics of Forest Management	298	(4)
Forest Loss and Biodiversity	302	(2)
Loss of Biodiversity	304	(2)
Economic and Demographic Pressures on Forests	305	(1)
Institutional Failures in Forest Management	306	(2)
Policies for Sustainable Forest Management	308	(3)
Supply-Side: Property Rights and Pricing Policies	308	(1)
Demand-Side: Changing Consumption Patterns	309	(2)
Forest Carbon Storage Valuation in Zimbabwe	311	(1)
Water: Depletion and Renewal	312	(5)
Increasing Supply: Aquifers and Dams	313	(3)
Demand: Always More Water?	316	(1)
Policies for Sustainable Water Management	317	(1)
Conclusion: Reconciling Economic and Ecological Principles	318	(1)
Water Scarcity, Pollution, and Politics in Mexico	319	(6)
Summary	320	(1)
Key Terms and Concepts	321	(1)
Discussion Questions	322	(1)
Problems	322	(1)
References	323	(1)
Web Sites	324	(1)
PART SIX Pollution: Impacts and. Policy Responses	325	(78)
Pollution: Analysis and Policy	327	(24)
The Economics of Pollution Control	327	(3)
How Much Pollution Is Too Much?	327	(1)
Picking a Pollution Control Policy	328	(1)
Marginal Costs and Benefits of Pollution Control	328	(2)
Pollution Control Policies: Standards, Taxes, Permits	330	(5)
Transferable Pollution Permits	332	(3)
Pollution Control Policies in Practice	335	(3)
Sulfur Dioxide Emissions Trading	338	(1)
Policy Choice: Pollution Taxes Versus Tradable Permits	339	(3)
Structuring Pollution Control Policies	341	(1)
The Impact of Technological Change	342	(1)
Grandfathering and Air Pollution Control	342	(2)
Cumulative and Global Pollutants	344	(1)
Has Ozone Pollution Peaked?	345	(6)
Summary	347	(1)
Key Terms and Concepts	348	(1)
Discussion Questions	349	(1)
Problem	349	(1)
References	349	(1)
Web Sites	350	(1)
Industrial Ecology	351	(23)
Economic and Ecological Views of Production	351	(2)
Making Wastes into Inputs	352	(1)
Closing the Loops: The Potential of Industrial Ecology	353	(2)
Beverage Bottle Recycling	355	(5)
Making Agriculture Compatible with Natural Ecosystems	357	(3)
Industrial Ecology on a Global Scale	360	(2)
Integrated Farming Systems in Asia	362	(4)
Measuring the Impacts of Global Growth	364	(2)
Policies to Promote Industrial Ecology	366	(2)
The Kalundborg Industrial Ecosystem	368	(6)
Summary	370	(1)
Key Terms and Concepts	371	(1)
Discussion Questions	371	(1)
References	371	(1)
Web Sites	372	(2)
Global Climate Change	374	(29)
Causes, and Consequences of Climate. Change	374	(1)
What Is the Greenhouse Effect?	375	(4)
Trends and Projections for Temperature Change	376	(3)
Pacific Islands Disappear as Oceans Rise	379	(1)
Economic Analysis of Climate Change	380	(4)
Cost-Benefit Studies of Global Climate Change	382	(2)
Analyzing Long-Term Environmental Effects	384	(3)
Economists' Statement on Climate Change	387	(1)
Policy Responses to Climate Change	388	(6)
Policy Tools: Carbon Taxes	388	(4)
Policy Tools: Tradable Permits	392	(1)
The Economics of Tradable Carbon Permits	393	(1)
Policy Tools: Subsidies, Standards, R&D, and Technology Transfer	393	(1)
The Kyoto Process	394	(9)
Summary	398	(1)
Key Terms and Concepts	399	(1)
Discussion Questions	399	(1)
Problems	400	(1)
References	401	(1)
Web Sites	402	(1)
PART SEVEN Environment, Trade, and Development	403	(40)
World Trade and the Environment	405	(19)
Environmental Impact of Trade	405	(4)
Comparative Advantage and Environmental Externalities	406	(2)
Environmental Effects of Expanding Resource Exports	408	(1)
Trade and Environment: Policy and Practice	409	(3)
Product and Process Issues	410	(2)
Trade Agreements and the Environment	412	(2)
The World Trade Organization Approach	413	(1)
The Environmental Kuznets Curve Debate	414	(4)
The North American Free Trade Agreement (NAFTA) Approach	416	(1)
The European Union Approach	417	(1)
Multilateral Environmental Agreements (MEAs)	417	(1)
Strategies for Sustainable Trade	418	(6)
``Greening'' Global Environmental Organizations	418	(1)
Local, Regional, and Private Sector Policies	419	(1)
Summary	420	(1)
Key Terms and Concepts	421	(1)
Discussion Questions	421	(1)
References	422	(1)
Web Sites	423	(1)
Institutions for Sustainable Development	424	(19)
The Economics of Sustainable Development	424	(2)
China and the Future of the Global Environment	426	(3)
New Goals and New Production Methods	428	(1)
Reforming Global Institutions	429	(1)
Community Resource Management in India	430	(4)
Promoting Environmentally Sustainable Development	433	(1)
The Global Environmental Facility	434	(2)
Local Development Projects	435	(1)
Sustainable Urban Management in Curitiba, Brazil	436	(1)
Policies for Sustainable Development	437	(6)
Specific Policy Proposals	438	(1)
Summary	439	(1)
Key Terms and Concepts	440	(1)
Discussion Questions	440	(1)
References	441	(1)
Web Sites	442	(1)
Glossary	443	(13)
Index	456