Natural Resource and Environmental Economics

by Prato, Tony

• ISBN13: 9780813829388
• ISBN10: 0813829380
• Edition: 1st
• Format: Hardcover
• Copyright: 1999-05-12
• Publisher: Wiley-Blackwell

Summary

Utilizes basic concepts of economics and finance to explain the relationship of the economy to the ecosystem, seeing the ecosystem as imposing biophysical constraints on economic growth. Means of sustainable economic development and sustainable resource use are stressed.Background material and alternative, more efficient, problem-solving approaches are included.

Author Biography

Dr. Tony Prato is professor of resource economics and management, and director of the Center for Agricultural, Resource and Environmental Systems at the University of Missouri-Columbia. He has written extensively on the assessment and management of natural resources. Prato is the recipient of numerous awards and distinctions and has taught and/or conducted research in the United States, the People's Republic of China, Thailand, New Zealand and Australia. His experience in the field includes service with the US Department of Energy and the US Department of Agriculture.

Table of Contents

Preface	xi	(2)
Acknowledgments	xiii
1. Importance of Natural Resources and Environment	3	(24)
Nature and Importance of Problems	3	(7)
Global Warming	4	(1)
Ozone Depletion	5	(2)
Acid Deposition	7	(1)
Conservation of Biological Diversity	8	(2)
Temporal, Scientific and Policy Aspects	10	(1)
Contributing Factors	11	(6)
Population	11	(2)
Per Capita Resource Use	13	(1)
Environmental Damages	14	(1)
Technology	15	(2)
Approaches to Resource and Environmental Issues	17	(2)
Role of Economics	19	(2)
Reductionist versus Holistic Science	20	(1)
Summary	21	(1)
Questions for Discussion	22	(1)
Further Readings	23	(1)
Notes	23	(4)
2. Economic and Financial Concepts in Resource Management	27	(28)
Consumption and Demand Theory	27	(6)
Utility Function and Indifference Map	28	(1)
Constraints	29	(2)
Household Equilibrium	31	(2)
Production and Supply Theory	33	(10)
Production Function and Isoquant Map	34	(1)
Constraints	35	(2)
Efficient Input Use	37	(1)
Firm's Input Demand Curve	38	(2)
Efficient Output	40	(3)
Market Equilibrium	43	(6)
Market Demand and Supply	44	(4)
Example of Market Equilibrium	48	(1)
Present Value	49	(2)
Summary	51	(1)
Questions for Discussion	52	(1)
Further Readings	53	(2)
3. Historical Views of Natural and Environmental Resource Capacity	55	(18)
Economic Views	55	(5)
Classical Economics	55	(4)
Neoclassical Economics	59	(1)
Conservationism	60	(2)
Contemporary Views	62	(1)
Limits to Growth	62	(1)
Other Factors	63	(2)
Indicators of Resource Capacity	65	(3)
Physical Measures	65	(2)
Economic Measures	67	(1)
Environmental Resources	68	(1)
Summary	68	(2)
Questions for Discussion	70	(1)
Further Readings	70	(1)
Notes	71	(2)
4. Economy and Environment	73	(18)
Circular Flow Economy	73	(2)
Material Balances	75	(3)
Ecological Economics	78	(2)
Sustainable Development	80	(6)
Sustainable Resource Use	83	(3)
Summary	86	(1)
Questions for Discussion	87	(1)
Further Readings	87	(1)
Notes	87	(4)
5. Property Rights and Externalities	91	(20)
Markets and Efficient Property Rights	91	(4)
Markets	91	(2)
Efficient Property Rights	93	(2)
Transaction Costs	95	(1)
Market Failures	96	(4)
Common Property and Open Access Resources	97	(3)
Public Goods	100	(1)
Externalities	100	(4)
Types of Externalities	101	(1)
Examples of Externalities	102	(2)
Externalities and Property Rights	104	(4)
Assignment of Property Rights	105	(2)
Government Intervention	107	(1)
Summary	108	(1)
Questions for Discussion	109	(1)
Further Readings	110	(1)
Notes	110	(1)
6. Natural Resource Decisions	111	(14)
Natural Resource Management	111	(4)
Types of Resources	115	(3)
Exhaustible Resources	115	(1)
Renewable Resources	116	(2)
Static Efficiency	118	(5)
Pure Competition	118	(4)
Imperfect Competition	122	(1)
Summary	123	(1)
Questions for Discussion	123	(1)
Further Readings	124	(1)
Note	124	(1)
7. Exhaustible Resource Use	125	(32)
Market Dynamics	125	(2)
Net Social Benefit	127	(1)
Two-Period Dynamic Efficiency	128	(11)
Case 1: Two-Period Efficiency with Constant Oil Demand	129	(4)
Case 2: Two-Period Efficiency with Variable Oil Demand	133	(6)
Multiple-Period Efficiency	139	(4)
Equilibrium Conditions	139	(1)
Time Path of Prices and Extraction	140	(3)
Underlying Factors	143	(10)
Technological Progress	143	(1)
Imperfect Competition	143	(1)
External Costs	144	(3)
Discount Rate	147	(2)
Recycling	149	(4)
Exploration and Development	153	(1)
Summary	153	(1)
Questions for Discussion	154	(1)
Further Readings	154	(1)
Notes	155	(2)
8. Renewable Resource Management	157	(32)
Simplifying Assumptions	158	(1)
Natural Growth	159	(3)
Static Efficiency	162	(11)
Private Property	163	(1)
Examples	164	(3)
Common Property	167	(4)
Multiple Objective Management	171	(2)
Dynamic Efficiency	173	(9)
Objectives and Constraints	174	(1)
Necessary Conditions	175	(7)
Renewable Resource Policies	182	(3)
Tax on Harvest	182	(2)
Access Fees, Effort Restrictions and Other Approaches	184	(1)
Summary	185	(1)
Questions for Discussion	186	(1)
Further Readings	187	(1)
Notes	187	(2)
9. Economics of Environmental Pollution	189	(54)
Residual Emissions, Pollution and Pollution Damages	190	(4)
Expanded Material Balances Model	191	(3)
Efficient Reduction in Environmental Pollution	194	(16)
Static Efficiency with Pure Competition	195	(11)
Static Efficiency with Imperfect Competition	206	(1)
Dynamic Efficiency	207	(3)
Establishing Property Rights for Environmental Resources	210	(1)
Pollution Abatement Policies	211	(25)
Point Source Pollution	211	(18)
Nonpoint Source Pollution	229	(7)
Summary	236	(2)
Questions for Discussion	238	(1)
Further Readings	239	(1)
Notes	240	(3)
10. Natural and Environmental Resource Accounting	243	(22)
Accounting Deficiencies	244	(6)
Defensive Expenditures	245	(1)
Resource Capacity	246	(3)
Residual Pollution Damages	249	(1)
Resource Accounting Methods	250	(7)
Physical Accounts	250	(2)
Monetary Accounts	252	(5)
Satellite Accounts	257	(1)
Resource-Specific Accounting	257	(2)
Implications for Sustainable Development	259	(1)
Summary	260	(1)
Questions for Discussion	261	(1)
Further Readings	262	(1)
Notes	262	(3)
11. Benefit-Cost Analysis of Resource Investments	265	(36)
Socially Efficient Investment	266	(4)
Net Social Benefit	266	(1)
Timber Harvesting Example	267	(3)
Special Topics in Investment Analysis	270	(13)
Continuous versus Discrete Time	271	(1)
Investment Evaluation Period	271	(1)
Efficiency and Equity Implications of the Discount Rate	272	(1)
Selection of Discount Rate	273	(6)
Capital and Operating Costs	279	(1)
Economic versus Financial Feasibility	279	(1)
Local versus Global Efficiency	280	(1)
Independent versus Interdependent Investments	280	(1)
Capital Rationing	281	(1)
Primary and Secondary Benefits and Costs	281	(1)
Risk and Uncertainty	282	(1)
Alternative Investment Evaluation Criteria	283	(7)
Payback Period	283	(1)
Average Rate of Return	284	(1)
Net Present Value	285	(1)
Annual Net Benefit	286	(1)
Benefit-Cost Ratio	286	(1)
Internal Rate of Return	287	(1)
Example	287	(3)
Evaluation of Independent and Interdependent Investments	290	(6)
Independent Investments	290	(1)
Interdependent Investments	291	(3)
Evaluation of Multiple Resource Investments	294	(2)
Summary	296	(1)
Questions for Discussion	297	(1)
Further Readings	298	(1)
Notes	299	(2)
12. Nonmarket Valuation of Natural and Environmental Resources	301	(34)
Importance of Nonmarket Valuation	301	(4)
Efficient Use of Exhaustible Resources	302	(2)
Natural and Environmental Resource Accounting	304	(1)
Resource Protection Policies	304	(1)
Efficient Resource Investment	304	(1)
Theoretical Basis for Nonmarket Valuation	305	(6)
Willingness to Pay and Accept Compensation	305	(1)
Valuing Changes in Resource Price	306	(3)
Valuing Changes in Resource Quality	309	(1)
Inequality between Willingness to Pay and Willingness to Accept Compensation	310	(1)
Use and Nonuse Values	311	(3)
Use Value	311	(1)
Option Value	312	(2)
Existence Value	314	(1)
Bequest Value	314	(1)
Estimation of Nonmarket Values	314	(15)
Indirect Market Methods	315	(7)
Direct Valuation Methods	322	(7)
Summary	329	(2)
Questions for Discussion	331	(1)
Further Readings	331	(1)
Notes	332	(3)
Index	335