Term
|
Definition
| 70% of Africa is under the age of 30. Soon a lot of young people will be entering the workforce. More labour intensive forms of agriculture can absorb this shock. In order to avert a huge unemployment problem, we need to have a strong non-farm industry to absorb the rest of the shock. Secondary education demands will skyrocket. Having an educated workforce will be good. |
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Term
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Definition
| An example of present generations saving for future generations. The Alaskans government requires that 25% of all oil revenue go to a fund to be used at some point in the future. |
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Term
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Definition
| An example of the tragedy of the commons. Bison used to form massive herds in North America. They are slow to reproduce, and have a stolid temperament. They were hunted nearly to extinction in the 1800's. Were an open access resource. |
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Term
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Definition
| An indirect revealed preferences valuation method. Calcultes the expenses to citizens to avoid pollution (home air cleaners, bottled water). |
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Term
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Definition
| The rules of the game. If you change the height of the basketball hoop, you change what is needed to excel at basketball. If the hoop was lower, shorter players would be better than tall players. |
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Term
| Before Euro-American bison market |
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Definition
| Prior to the 1800's, Native American tribes had organization and strictly regulated rules about harvesting bison. |
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Term
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Definition
| A form of contingent valuation where similar examples from other situations are used to determine a value. Accuracy is compromised. |
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Term
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Definition
| The number of species and genetic diversity. A public good. It is decreasing. The private sector will undersupply it. |
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Term
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Definition
| Started in the late 19th century. Bison are now owned privately. |
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Term
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Definition
| A close substitue to cattle hide. Robe is not required on the hide for it to have value. Had a market from 1871 to 1884. Market emerged when railroads reached into bison regions. Hides can be harvested at any time of the year. The bison were hunted nearly to extinction during this period. |
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Term
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Definition
| The skin and hair of the American bison. Had a market from 1820 to 1880. It can only be harvested in the late falll/early winter, when the bison have thick hair. Herds are scattered during this time, making extraction expensive. Harvest was stable due to this restriction. |
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Term
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Definition
| A solution to externality issues. One party pays another party to put up with the externality, or pays the externality causer to lessen the externality. Who pays who is a matter of property rules. |
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Term
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Definition
| When property rights belong to individuals. The pursuit of profit drives the economy. This is not necessarily inconsistent with the needs of society as a whole. |
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Term
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Definition
| A group of suppliers that purposefully restrict production to raise prices, giving an effect similar to a monopoly. |
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Term
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Definition
| A solution for pollution externalities. The polluting firm will determine an optimal level of pollution management with this new cost. The optimum level of pollution will not be zero. |
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Term
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Definition
| Pollution of greenhouse gasses is causing atmosphere heat to go up. Will cause bad things for human health, cause rising sea leveles, more intense weather systems, and disaplacement of ecosystems. Effects will become more intense over the next century. Developing countries will be hit the hardest, while developed countries will be contributing most to it. Deforestation contributes to climate change. Costs of climate change are international, but the costs of reducing climate change are national. This causes an inefficiency. |
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Term
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Definition
| None are perfect. All of them over-estimate. |
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Term
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Definition
| A system where nothing goes in or out. The earth is a closed system for material, but not for energy. Incomiming meteorites and outgoing spacecraft are small enough to be considered negligible. Anything taken from the environment is returned as wastes. |
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Term
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Definition
| Idea by R.H. Coase. As long as negotiation costs are low and the number of parties small, parties can self-negotiate externality issues and reach an efficient allocation. |
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Term
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Definition
| A method of determining intangible costs. A combination of engineering and survey approach. Survey determines the available technologies and unusual circumstances, engineering determines the truthful costs of those technologies and circumstances. |
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Term
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Definition
| Non-exclusive, divisible. |
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Term
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Definition
| When more than one person owns property. Can be successful in some cases. |
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Term
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Definition
| There are many buyers and many sellers. No one's actions have any significant effect on market prices. To achieve this, governments must apply anti-monopoly policies. |
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Term
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Definition
| Two goods where if the price of one goes up, demand for the other goes down. |
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Term
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Definition
| An indirect stated preference valuation method. A survey where respondents choose between various states of the world presented with attributes and prices. |
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Term
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Definition
aka Consumer net benefits
The area of net benefits over the price line, under the demand curve, and to the left of the quantity line. |
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Term
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Definition
| A direct, stated method of determining nonuse values. Includes surveys. The problem is that people may give biased answers. |
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Term
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Definition
| An example of the self-extinction premise. An ancient Mayan city. Their population exceeded the carring capacity of their land. Humans remains show evidence of widespread infant mortality and malnutrition. |
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Term
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Definition
The most popular way to value the environment. Responds to the concerns of those who not believe in anthropomorphic valuation of the environment.
1. Identify affected categories
2. Estimate the physical relationship between an action and the damage
3. Estimate the response of the affected parties towards averting or mitigating damages.
4. Place a monetary value on the damages
Every step is difficult and has many pitfalls and different methods to do it. |
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Term
| Cost-effectiveness analysis |
|
Definition
An alternative to benefit/cost analysis. A maximum level of damage is decided upon. Then the minimum costs to provide this level are found through optimization procedure.
Problem: not all cost-effectiveness outcomes are efficient. |
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Term
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Definition
| A component of a discount rate. The rate of return when no risk is involved. |
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Term
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Definition
| Founded by Norwegian philosopher Arne Naess. Nature has an intrinsic value independent of humans. Humans should only use the environment for our survival, no more. |
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Term
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Definition
| A graph showing how much of a thing will be bought at any given price. |
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Term
|
Definition
Factors that change the demand curve:
Change in number of buyers
Change in buyers' tastes
Change in income
Change in price of related goods (substitutes, complements) |
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Term
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Definition
| A method of valuation that looks at observed values. |
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Term
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Definition
Can change the outcome of a decision. The topic of many debates, such as on climate change action. Too low of a discount rate results in approving too many projects.
Consists of:
1. Cost of capital
2. A risk premium. |
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Term
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Definition
| Converted the future benefits and costs into present value. |
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Term
| Discrepancy between WTP and WTA |
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Definition
| When measured with surveys, people are more willing to accept compensation for a loss than they are to pay to not have the loss. The discrepancy is larger when it is a public good. |
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Term
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Definition
| A policy which results in maximized net benefits for every possible outcome. Risk is irrelevant. |
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Term
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Definition
| Static efficiency over a period of time. Maximizes present benefits at all points. |
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Term
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Definition
| An example of the self-extinction premise. An island off the coast of Chile. Evidence of an advanced society (large statues), but their population exceeded the carrying capacity of the island. People were driven to cannibalism and war before they died out. |
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Term
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Definition
| Uses a variety of methodologis, including neoclassical economics. |
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Term
| Efficient property right structure |
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Definition
| Property has exclusivity, transferability, and enforceability. |
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Term
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Definition
| One of the characteristics of efficient property rights structure. All property rights are secure from involuntary seizure or encroachment by outside parties. |
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Term
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Definition
A method of determining intangible costs. All expenses are carefully cataloged, using the lowest cost technology available.
Problem: the firm may have an unusual or unexpected circumstance that increases costs. |
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Term
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Definition
| Energy that cannot be used to do work. Every time energy is transferred, some entropy is created. No energy transfer is 100%. |
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Term
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Definition
| Emphasises maximizing human welfare, using incentives to modify human behaviour. |
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Term
| Environmental quality standard |
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Definition
| A minimum level of environmetal cleanliness enforced by policies. Supply and demand situation is used to determine the optimal level of cleanliness. Optimal level will not be zero. Those who pay for the clean-up may not benefit from it. |
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Term
| Environmental sustainability |
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Definition
| Extract at or below the rate at which nature can replenish a resource. Physical flow of natural capital is maintained, rather than the value of capital. |
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Term
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Definition
| Used in benefit/cost analysis. Maximization of net benefits occurs when marginal benefit equals marginal costs. |
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Term
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Definition
| In 1965 she wrote a piece opposing the ideas of Thomas Malthus. She said that as popuation rises, people will be innovative and find ways to make more food. The non-farming sectors will fuel the economy. In reality, these effects plateau after a population density of 500 - 600 per square km of arable land. At this density, intensification of agriculture becomes unsustainable. |
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Term
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Definition
| The estimate of benefits and costs before the fact. Never as accurate as ex post. |
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Term
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Definition
| The benefits and costs, after the fact. |
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Term
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Definition
| One of the characteristics of efficient property rights structure. All the benefits and costs of property accrue to the owner of the property. |
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Term
| Expected present value of net benefits |
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Definition
| In a risky situation, the weighted (by their probability) net benefits of a decision. Always choose the decision with the highest expected present value. This method assumes that society is risk-neutral. |
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Term
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Definition
| A departure from efficiency. When the welfare of one agent depends on the actions of another. Can be negative, positive, or pecuniary. May be solved with a bribe. |
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Term
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Definition
| An oil tanker that had a huge oil spill in 1989. The oil company had to pay $2.5 billion for the damages. They had to value the environment to determine this number. |
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Term
| First Eqimarginal Principle |
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Definition
| Net benefits are maximized when the marginal benefits from an allocation are equal to the marginal costs. |
|
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Term
| First Law of Thermodynamics |
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Definition
| Energy and matter cannot be created or destroyed. |
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Term
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Definition
|
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Term
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Definition
| A person who benefits from a non-exclusive good without paying for it. |
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Term
|
Definition
| Some polltion will only effect people of the future. What discount rate should we apply on these future costs? Any reasonable rate reduces the costs to almost nothing. If we truly care about future generations, a 0% discount rate should be used. |
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Term
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Definition
An idea by James Lovelock.
The earth is a complex living creature with many complex feedback loops, capable of finding a type of homeostasis, regardless of human activities. |
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Term
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Definition
| The genetic variety within a species. Enhances opportunities for breeding projects. |
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Term
| Geographic Information System (GIS) |
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Definition
| A mapping system that can have many layers. Used in hedonic property valuation. This software is needed to analyse the huge amount of data. |
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Term
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Definition
| A departure from efficiency. When the government is to blame for an economic inefficieny. |
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Term
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Definition
| In 2004/2005, Ontario decided that they would disallow agricultural land owners to remove thier land from agricultural use. The idea was to slow urban sprawl, but property values plummeted. Option value was lost. |
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Term
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Definition
| Developed by John Hartwick. Constant consumption of a resource is possible if all the scarcity rent is invested in capital. Future generations are left at least as well off as the present generation. If principle is declining, allocation is unsustainable. |
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Term
| Health effects of pollution |
|
Definition
It is impossible to determine exactly what they are because:
1. It is unethical to perform experiments on humans, so only animals can be used.
2. Data using animals only shows the health effects onaimals.
3. It is difficult to disentangle damage from other causes out of statistical analysis. |
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Term
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Definition
| Includes hedonic property value and hedonic wages. Carefully compares the prices of similar products, and tries to determine what qualities alter the cost. May include many factors. |
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Term
|
Definition
| An indirect revealed preference valuation method. GIS used to determine it. Uses simple regression to tease out the value of environmental components in property values. All other things being equal, property values are lower in polluted areas or areas near superfund sites. |
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Term
|
Definition
| An indirect revealed preference valuation method. Uses multiple regression to tease out the value of risk compensation in salaries. All other things being equal, people who work in polluted and/or risky jobs are paid more. |
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Term
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Definition
| When the respondent to a survey says their willingness to pay is one way, but in reality it is lower. Because it is only hypothetical money, the WTP is inflated. |
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Term
|
Definition
| An alternative to benefit/cost analysis. Doesn't apply monetary value. Doesn't optimize. A policy maker simply evaluates a series of options and makes a decision accordingly. |
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Term
| Improperly defined property rights |
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Definition
| A departure from efficiency. |
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Term
|
Definition
| A method of valuation that looks at extrapolated values. |
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Term
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Definition
| A graph showing how much of a thing an individual person would purchase at various prices. |
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Term
|
Definition
| One person's consumption of a good doesn't effect another person's consumption. |
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Term
|
Definition
| When the respondent to a survey doesn't have enough information to answer the survey accurately. |
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Term
|
Definition
| Benefits that cannot be easily assigned a monetary value because data is not available or unreliable. The value used to have varying degrees of effect on the decision outcome. Ignoring intangible benefit biases the results. |
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Term
|
Definition
| The phenomenon of people reaching social efficiency while trying to maximize their own benefits. |
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Term
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Definition
| When a peice of land is developed, it reates jobs, homes, goods, and wealth for humans. It degrades the ecosystem, often irreversibly. |
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Term
|
Definition
| An unfortunate busniess in Africa. A village is in communal ownership of a piece of land. An investor offers to buy the land fro the chief. They use guns and threats to force him/her to "sell" the land legally, then take over. Yields enormous profits for the investor. |
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Term
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Definition
| In Africa they are usually created by foreign investments in land. In some cases it has a spillover effect that benefits the community. In some cases it does not. |
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Term
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Definition
| A personal preference of one thing over another. |
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Term
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Definition
| Rules that require that firms that emit externalities give compensation to damaged parties after the fact. Requires expensie, case-specific investigation, has a high transaction cost. |
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Term
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Definition
| Says that environmental issues are no longer a problem. |
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Term
|
Definition
| When all costs are variable. |
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Term
|
Definition
aka Marginal opportunity cost curve.
The additional cost of producing the last unit. |
|
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Term
|
Definition
| The opportunity cost of the resource being saved for the future. The distance between the intersecion of two demand periods and the quantity axis. In the absence of scarcity, marginal user cost is zero. |
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Term
|
Definition
| When the demand is exactly the same as supply. Consumer and producer surplus are both maximized. This is efficient. |
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Term
|
Definition
| The sum of all the individual demand curves in a society. |
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Term
|
Definition
| A direct preference method of determining values. |
|
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Term
|
Definition
| Try to potimize everyone's individual lexicographic preferences. |
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Term
|
Definition
| In Africa, they are urban investors who bough land and are hiring other people to cultivate it for profits. These people have political leverage, and can effect policy making more so than a smallholder farmer could. |
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Term
|
Definition
| The analysis of analyses. A form of contingent valuation where the results of past studies are used to estimate the value. Accuracy is compromised. |
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Term
|
Definition
| When there is only one seller. An imperfect market structure. |
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Term
| National Environmental Policy Act of 1969 |
|
Definition
| Signed by President Nixon. Requries that all federal agency proposals with an effect on the environment include a report on quantified impact and alternatives to the action. |
|
|
Term
| National Oceanic Atmospheric Aministration (NOAA) |
|
Definition
| After the Exxon Valdez incident, they conducted research into the validity of nonuse value. |
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Term
|
Definition
|
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Term
|
Definition
aka External diseconomy
When the affected party is damaged by the externality. Externality is generally oversupplied. Price of product is too low. |
|
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Term
|
Definition
| When a first thing causes a second thing that causes less of the first thing. Eventually winds down and stops. |
|
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Term
|
Definition
| The triangle between the demand curve, supply curve, and cost axis. |
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Term
|
Definition
| Cannot prevent someone else from benefitting from it once it is paid for. |
|
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Term
|
Definition
| The value placed on an environmental resource even if it will never or can never be used. The value is simply for the "resource"'s existance. |
|
|
Term
|
Definition
| Describes what ought to be. Opinions and personal values. |
|
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Term
|
Definition
| A possible solution to rising energy costs due to carbon emission regulations. |
|
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Term
| Office of Management and Budget |
|
Definition
| In 1970 they standardized the rules about what discount rates could be used. |
|
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Term
|
Definition
Organization of Petroleum Exporting Countries
An oil cartel. |
|
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Term
|
Definition
aka Res nullius
When no one owns a thing. Resources are claimed on a first come first serve basis. Causes the tragedy of the commons. Generally over-harvested. A cause for allocation inefficiency. External costs include contemporaneous and integrational external costs. |
|
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Term
|
Definition
| A system where things may come in or out. The earth is an open system for energy. The sun radiates the Earth, depositing energy. |
|
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Term
|
Definition
| The cost for using resources in an alternative way. The benefts lost when the resources are foregone in another use. |
|
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Term
|
Definition
| The process in cost-effectiveness analysis where the east cost way towards a goal is determined. |
|
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Term
|
Definition
| The value placed on an environmental resource to reserve the ability/right to use it at some point in the future. |
|
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Term
|
Definition
Named after the Swiss-Italian economist Vilfredo Pareto. Allocations where there is no other feasible allocation that would benefit more people without deleterious bad effects on other people.
All the goods a person prefers must be available to be bought. All of the markets for these goods must be competitive. Dependent on the initial arrangement of goods. |
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Term
|
Definition
| When an externality is transmitted through prices. |
|
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Term
|
Definition
| Buildings, equipment, roads, et cetera. |
|
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Term
|
Definition
| A solution to negative externalities. A tax that causes firms to lessen production and the externality. |
|
|
Term
|
Definition
| Describes what was, what is, and what will be. Facts only. |
|
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Term
|
Definition
| aka External economy. When the affected barty benefits from the externality. Externality is generally undersupplied. |
|
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Term
|
Definition
When a first thing causes a second thing that then causes more of the first thing. Just keeps inreasing and increasing.
Example: greenhouse effect. As the atmosphere warms up, more methane is released into the atmsophere. |
|
|
Term
| Potential compensation criterion |
|
Definition
If some people are worse off because of a decision, the people who are better off could fully compensate them and still themselves be better off. If this fact is true, the decision is good.
As to wheather the loosing party should be compensated is a matter of normative economics. |
|
|
Term
|
Definition
The value today of investment.
PV = Bn / (1 + r)n |
|
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Term
|
Definition
Effects that are directly and obviously correlated to an action.
Example: cleaning a lake results in increased recreational activities in the lake. |
|
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Term
|
Definition
| When one person owns property |
|
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Term
|
Definition
| The area in net benefits below the price line. |
|
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Term
|
Definition
aka Producer net benefits
The area under the price line and above the supply curve, to the let of the quantity. In the long run, equal to profits plus rent. If new firms can enter and exit without raising the prices, producer surplus is zero. |
|
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Term
|
Definition
| A bundle of entitlements that define the owner's right, privileges, and limitations. |
|
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Term
|
Definition
| Court-decided rules that determines the initial rights to a resource. Determine who pays who in a bribe. Negotiation costs may be high. Without negotiation, the party who can most easily sieze property rights does so. |
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Term
|
Definition
| Non-exclusive, indivisible. A departure from efficiency. |
|
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Term
|
Definition
| When organizations use politics to create inefficiencies that benefit them, often at the expense of society. Often goes unnoticed due to voter ignorance. |
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Term
|
Definition
| Preferences determined based on actual observable costs and benefits. Use value preferences. |
|
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Term
|
Definition
| When there are range of outcomes from a decision. To determine what the correct decision is, a benefit/cost analysis may be performed on all possible outcomes. The decision with maximum net benefits should be chosen. For irreversible decisions, the decision should be postponed as long as possible to give time to gain information. |
|
|
Term
|
Definition
| A person who will not take a fair bet. The kind of person who would buy insurance. |
|
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Term
|
Definition
| A person who will take a fair bet. The kind of person who would gamble. |
|
|
Term
|
Definition
| A person who is indifferent betwen taking and not taking a fair bet. |
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Term
|
Definition
| Part of a discount rate. An additional cost to compensate for risk. |
|
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Term
|
Definition
| An idea by David Ricardo. The producer surplus that persists in a long-run competitive market. |
|
|
Term
| Second equimarginal principle |
|
Definition
| Used in cost-effectiveness analysis. The least-cost means of achieving a goal will be met when marginal cost of all possible means of achievement are equal. |
|
|
Term
| Second law of thermodynamics |
|
Definition
| Entropy always increases with every energy transfer. |
|
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Term
|
Definition
The effects of a primary effect.
Example: cleaning a lake results in increased recreational activities, which result in increased employment around the lake. |
|
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Term
|
Definition
| The idea that when an empire is built, it sows the seeds of its own demise. Societies don't react in time for a disaster, and/or their reaction just makes the disaster worse. |
|
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Term
|
Definition
| When at least one cost is fixed. |
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Term
|
Definition
| In Africa, they are farmers with tiny plots of land. 70% of farmers. They sell almost nothing. Using the land to feed their families, getting income from off-farm employment. |
|
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Term
|
Definition
| When property rights are owned by the state. Doesn't always serve society's interests. |
|
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Term
|
Definition
| When the structure of the survey biases the answer. |
|
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Term
|
Definition
| When the government owns property. Exists in varying degrees in capitalist countries. |
|
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Term
|
Definition
| Preferences determined based on indirect costs and benefits. Nonuse value preferences. Can be determined through contingent valuation. |
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|
Term
|
Definition
aka Efficiency
An allocation of resources where net benefits are maximized. |
|
|
Term
|
Definition
| The value of something right now. The present value of flow. If maximized, there is efficiency. |
|
|
Term
|
Definition
| When a respondent to a survey answers untruthfully in a way to strategically control the outome of the survey. |
|
|
Term
|
Definition
| A form of sustainability according to the Hartwick Rule. Counts only natural capital. Doesn't allow for as much extraction of natural resources as weak sustainability. |
|
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Term
|
Definition
| Two goods where if the price for one goes up, the demand for the other goes up. |
|
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Term
|
Definition
| A toxic waste site. Poses a threat to the land around it. Property values are diminished. Distance from these sites increases the property value, according to hedonic property value. |
|
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Term
|
Definition
Factors that shift the supply curve:
Change in number of suppliers
Change in price of inputs
Technological advances
New regulations |
|
|
Term
|
Definition
A way to determine intangible costs. Simply ask those who bear the costs how much the cost is.
Problem: there may be incentive to inflate costs and change a decision in their favour. |
|
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Term
|
Definition
| Makes sure that extraction of a resource can be stable over time. |
|
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Term
|
Definition
| Future generations should be left no worse of than current generations. When you use a discount rate, these criterion are not met. |
|
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Term
|
Definition
| Where both parties in an externality issue have initial rights. They will usually be able to work out an efficient compromise. |
|
|
Term
|
Definition
| Benefits that can be easily assigned a monetary value. |
|
|
Term
|
Definition
| Within one lifetime, average income is rising extremely quickly. Countries are doubling their wealth in just 10 years time. |
|
|
Term
|
Definition
| An organization which protects habitats of endangered or significant species. An example of a private sector providing biological diversity. Doesn't supply an efficient amount (undersupplied). |
|
|
Term
|
Definition
| In 1798 he published "An Essay on the Principle of Population". Predicted that human population will exceed the Earth's carrying capacity, resulting in death and starvation. However, Malthus' calculations used the technological level that was present in his time period. Knowledge of technological advancement may have changed his prediction. |
|
|
Term
|
Definition
| Money is valued differently in the future than in the present. Present money is worth more. Discounting determines the value of money in the future. |
|
|
Term
| Total willingness to pay (TWP) |
|
Definition
| The sum of use value, option value, and nonuse value. |
|
|
Term
| Tragedy of the open access resource |
|
Definition
aka Tragedy of the commons
When parties exploit at an amount that increases their own personal benefits, but decreases the net benefits to society. Taking a bigger piece of a smaller pie. |
|
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Term
|
Definition
| The cost of lawyer's fees, court time, et cetera, that are involved in a decision. If the transaction costs are larger than the costs of the inefficiency, it is better to stay inefficient. |
|
|
Term
|
Definition
| One of the characteristics of efficient property right structure. All property rights are transferable from one party to another by voluntary exchange. |
|
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Term
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Definition
| An indirect, revealed preference valuation method. The amount of money visitors pay to travel to sites to see it. The value of the site can be determined from this. |
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Definition
| The simplest model for finding dynamic efficiency. Looks at the allocation between two time periods. |
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| The direct use of an environmental resource. The monetary value is fairly easy to determine. |
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Definition
A human life is not priceless; scarce resources are used to preserve it. The value attched to a decrease in the risk of death. The amount an individual would be willing to pay per unit of reduction of risk adds up to about $5 million per person.
Ethics becomes an issue. Some would argue that the nonuse value of a human life is infinity dollars. |
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Definition
| The monetary benefits the environment gives us, or the monetary costs that would arise from destroying parts of the environment. Difficult to assess because the environment has no market value. If it is nt valued, the default value will be set at $0. |
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Definition
| A concept by John Rawls. A hypothetical meeting of people from all time periods. The veil prevents them from knowing what time period they will have to live in. They make decisions about allocation of resources through time. Make more conservative decisions for the risk that they will have to live in a future time period. |
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Definition
Moderate water stress = over 20% of available renewable fresh water is being used.
Severe water stress = over 40%.
By 2025, two thirds of the world will be under water stress. |
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Definition
| A form of sustainability according to the Hartwick Rule. Counts physical and natural capital. Allows for more extraction of natural resources than with strong sustainability. |
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| Willingness to accept (WTA) |
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Definition
| The amount of money an individual would demand when deprived of the last unit of a good. |
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| The amount of money an individual will pay for the last unit of a good. The area underneath the demand curve. |
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Definition
| In 1996 they decided that between 1990 and 2015 they would halve the number of hungry people, or halve the world % of hungry people. The latter is more feasible. |
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Definition
| Say that environmental issues are still a problem. |
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| An international law stating that any country with an ocean coast is entitled to fishing and management rights 200 miles out to sea. |
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| The formation of new forests on land that was not previously forested. |
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| The largest user of water. |
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| A huge rainforested area in Brazil. The single richest region of the tropical biome. Subject to deforestation and loss of biodiversity. |
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Definition
| How benefits of forests are worked into the system. Marginal benefit of delaying harvest is increased. Marginal benefits may never be equal to opportunity cost. This would result in the forest never being harvest. |
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Definition
| A solution to fisheries being open-access resources. Fish are kept in confined areas. Yields are higher. More control of fish. Only works for certain species. Problems with externalities such as diseases. |
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Definition
| A source of groundwater. Bowl shaped, so as water is depleted, the edges run dry first. |
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Definition
| Where the city of Guelph gets it water. Guelph residents use an average of 177 L of water a day. |
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Definition
| A restricted transfer inefficiency in water systems. A rule where if an offstream water user fails to use water on a regular basis, they will lose water rights. Creates and incentive to over-use. |
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Definition
| Used as a source of new genes for breeding projects. Most pharmaceuticals originate from tropical plants. It is decreasing. Species extinction is irreversible. Can be caused by deforestation. |
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Definition
aka Tiered
An agricultural water pricing scheme. The majority of water costs are bore by urban populations, who then benefit from cheaper foods. Complicated implementation. Good efficiency. Demand is easily controlled. |
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Term
| Boil-water advisory (BWA) |
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Definition
| Issued to the public when the water is contaminated or water quality is questionable. Water must be brought to a rolling bol for a minimum of one minute in order to be consumable. |
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Definition
| A solution to fishery over-exploitation. The government pays fishermen to not fish. |
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Definition
| Has 20% of the world's total freshwater resources. Most of this is in the northern regions and is unavailable to populations in the south. |
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Term
| Carbon sequestering credits |
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Definition
| A solution to climate change. Credits are given for planting trees. Problems include determining exactly how much carbon is sequestered and if it will be permanent. |
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| Conservation easement & land trusts |
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Definition
| A solution to declining biodiversity. Money is given to developing countries for the explicit purpose of conservation activities. |
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Term
| Contemporaneous external cost |
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Definition
| One of the external costs of an open access resource. Borne by current generations. Too much effort is put into fishing. |
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Definition
| An inefficiency in forestry. When forests are owned for a set amount of time, an efficient harvesting time may not be used. |
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Definition
| The decision to convert a forest to another land use. |
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Definition
| A solution to declining biodiversity. A non-government organization pays off the debts of a developing country and in return the ountry practices conservation activities. |
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Definition
| Countries with larger debts tend to over-exploit their resources. |
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Definition
| A volumetric water pricing scheme. The price of water decreases in blocs as water consumption increases. Places undue hardship on small use low-income households. |
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Definition
| The destruction of forests. Intensifies climate change. Decreases biodiversity. Increases soil erosion and desertification. Excessive deforestation rates are inefficiencies caused by biases in profit-maximizing decisions. |
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Term
| Dynamic efficient sustainable yield |
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Definition
| The yield that maximizes the present net benefit, taking into account discounting. |
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Definition
1. Marginal benefit of all uses is equalized.
2. Can deal with fluctuations in water supply. |
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Definition
| On average it is 0.51. It has a higher elasticity in arid climates. |
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Definition
| A solution to declining biodiversity. Establishment of reserves where indigenous people can engage in traditional hunting-gathering activities. |
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Definition
| A water pricing scheme. A flat fee is charged for water access. No efficiency; marginal cost is zero. Does not require a meter. Houses with this pricing scheme use more water. |
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Definition
| A water pricing scheme. An unchanging rate is charged for water. |
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Definition
| Having more than 50% of employment from forest-based activities. 300 communities in Canada are forest dependent. |
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Definition
| Canada has 10% of the world's forest cover, 20% of the world's temperate rainforests, and 30% of the world's boreal forests. In Ontario, 91% of forests are provincially owned, 1% federally, and 8% privately. Provide products and services. Wood for building, fuel, and paper. Cleanse air of pollution. Wildlife habitat (endangered species, white-tailed deer). Watershed filtering. Tourism. |
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Definition
| A territory for scallop harvesting on the border between Canada and the US. The two countries have different policies on scallop harvest. Canada had older, larger scallops because they limited entry, and operators joined together in fishing corporations. |
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Definition
| An inefficiency in water systems. |
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Definition
| Freshwater collected in aquifers. Renewed very slowly by percolation. 1.5 billion people rely on groundwater for survival. Has a high marginal use value. Collectiing results in land subsistence. It is an open-access resource, so it is often over-harvested. 90% of the world's readily available freshwater sources are groundwater. Only 2.5% of this is renewable. An efficient allocation takes into account competing uses, intergenerational effects, an the fact that groundwater is non-renweable. |
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Definition
| The decision to harvest trees. |
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Definition
| A system of continuous water circulation in the environment. A huge amount of water, but only 2.5% of freshwater. Of this, less than 1% is available for human consumption. |
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Term
| Individual transfer quotas (ITQs) |
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Definition
| A solution to fishery over-exploitation. Entitles the holder to catch a specified share of a specified species of fish. The sum of all the shares is the efficient harvest. Quota is freely transferable between fishermen. The total available catch may be inaccurately estimated, resulting in over-fishing. Fishermen may jettison fish in order to maximize profits, killing the fish. |
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Term
| Inefficiency in water systems |
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Definition
1. Restrictions on water transfer.
2. Water prices too low. |
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Term
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Definition
aka Faustmann model
Formulate by Martin Faustmann in 1859. A model where trees are replanted directly after harvest in an infinite cycle. Efficient harvest time is the optimal rotation. There is an opportunity cost of the foregone time that coul have been used to grow the next cycle. Harvest time is shorter than in a single-harvest model. |
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Definition
| An agricultural water pricing scheme. Prices are attached to water-related agricultural proucts such as fertilizers in the form of taxes. Very easy to implement. Medium efficiency. Demand is easily controlled. |
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Definition
aka Non-consumptive use
Water is not used up. Swimming, boating, fishing. Water is still available after use. May be considered to be not a beneficial use, so water rights may be taken away. |
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Term
| Integrational external cost |
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Definition
| One of the external costs of an open access resource. Borne by future generations. Overfishing reduced the stocks, lowering future profits. |
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Term
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Definition
| A resource where the size of the stock is determined by the actions taken by society. The normal incentives of an individual often coincide with neither efficiency nor sustainability. |
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Definition
| A volumetric water pricing scheme. Price of water increase as water consumption increases. Promotes water conservation. |
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Definition
| The gradual settling and sinking of land. Caused by underground water movement, especially from removal of groundwater. 80% of land subsistence is caused by humans. |
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Definition
| An inefficiency in forestry. Harvest costs are too low, resulting in inefficient rate of harvest. |
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Term
| Marine protected area (MPA) |
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Definition
| A solution to fishery over-exploitation. Protects species, habitats, and the environment. Fish may swim out of the MPA and be harvested. Yield is increased, but the increase is delayed. |
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Term
| Maximum sustainable yield population (S*) |
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Definition
| The population size that yields the maximum growth. The largest catch that can be perpetually maintained. Non synonymous with efficiency unless the cost of fishing is zero (which it never is). |
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Term
| Minimum viable population (S) |
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Definition
| The population size at which growth is negative. Deaths outweigh births. An unstable equilibrium. Values below S also result in population decline. |
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Term
| Natural equilibrium (S bar) |
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Definition
| The population sie that would persist in the absence of outside influences. Reductions from natural mortality are offset by the birth rate. A stable equilibrium. |
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Definition
aka Depletable resource
A resource that has a growth rate not significant on a relevant time scale. Example: water in aquifers with little or no recharge. |
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Definition
aka Consumptive use
Water is used up. Minicipal drinking water systems, agriculture. |
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Definition
| The efficient time of harvest in an infinite-harvest model. It is when the marginal benefit of another year's growth is equal to the marginal opportunity cost. Determined by planting and harvesting costs. As these costs increase, the optimal rotation gets longer. |
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Definition
| An agricultural water pricing scheme. Prices are based on the output a farmer produces. Easily implemented, medium efficiency. Demand is easily controlled. |
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Definition
| When the demand for water is higher than normal. All water utilities must provie water demand at all times, ignoring money and environmental coosts. Generally in the summer it is hotter and there is less precipitation, so water demand is higher during these times. Infrastructure must be able to handle these peak demands. |
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Definition
| An agricultural water pricing scheme. Water is charged based on the area of irrigated land and the type of crop. Very easy to implement. No efficiency; the marginal cost of water is zero. Difficult to control demand. |
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Definition
| A form of forestry that may be both efficient and sustainable. Fast-growing trees are used. However, there is poor biodiversity. Plantations may require fertiliers and pesticides. |
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Definition
| The illegal harvest of fish against the rules set up to prevent fishery over-exploitation. Hard to enforce rules in fisheries. |
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Definition
| A restricted transfer inefficieny in water systems. The government creates a hierarchy in water uses. Uses deemed more valuable are given priority rights to water. |
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Term
| Prior appropriation doctrine |
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Definition
| A property right system that followed riparian rights. The person to first arrive at water has "senior" rights, and following users have "junior" rights. |
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Term
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Definition
| An inefficiency in forestry. Foresters do not consider the environmental benefits of the forest, thus do not maximize social net benefits, only private benefits. |
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Term
| Raising the real cost of fishing |
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Definition
| A solution to over-exploitation of fisheries. Rules that make fishing more expensive. Certain technologies are banned. Fishing is only allowed during certain time periods. Benefits are lost. Hard to know exactly how much the cost of fishing is increased. |
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Definition
| The replanting of forests that were deforested. |
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Definition
| A resource that has a significant rate of growth on a relevant economic time scale in which planning and management are meaningful. Exmple: streams maintained by the water cycle. |
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Definition
| Water from consumptive uses returning to the water source by the hydrologic cycle. |
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Definition
| A process that turns sea water into fresh water. Used to be prohibitively expensive, but new technology has made it cheaper. Sea water is pressurized and prumped through a series of membranes. |
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Definition
| Property rights to water that are tied to land rights. Owners of land adjacent to bodies of water have the rights to the water. Used during the early settling of the US. |
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Definition
| A solution to declining biodiversity. When a forest has a species that can provide pharmaceuticals, the govenmetn can charge royalties for the use of the pharmaceuticals. An incentive to practice conservation activities. |
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Definition
| A model for fish populations. Does not take into account water temperature or age structure of populations. More useful for long-term problems. |
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Definition
| A volumetric water pricing scheme. Price changes by time period. Prices are the highest during peak season. Promotes water conservation during these times. This is an efficient practice. |
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Term
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Definition
| Water systems would be more efficient if sewage take-away service was charged separately from water costs. |
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Definition
| A model where trees are harvested only once. Efficient harvest time is not affected by planting or harvesting costs. The land has no opportunity cost. |
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Term
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Definition
| An equilibrium where movement away from equilibrium triggers forces that restore equilibrium. |
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Definition
| The value of an existing forest. Older trees are more valuable. |
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Definition
| Freshwater in rivers, lakes and reservoirs. Flows on the earth's surface. Global collection is expected to rise. Marginal use value is very low, because natural phenomenon will replenish the water. An efficient allocation takes into account competing uses and year to year variation. |
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Term
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Definition
| It is possible for efficient forestry to co-exist with sustainability defined as non-declining welfare (weak sustainability). Not possible to co-exist if sustainability is defined as protecting forests and harvesting only at the growth rate (environmental sustainability). |
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Definition
| When the yield equals the growth rate of the population. This can be maintained forever. It is any point on thhe graph between S and S bar. |
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Term
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Definition
| A solution to fishery over-exploitation. The cost of fishing is raised with a tax. No benefits are lost bbecause the money goes into tax dollars. Very easy to control how much the cost of fishing is increased. |
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Term
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Definition
| Absorb CO2, a greenhouse gas. Can grow for up to 25 years in a forestry. Harvested trees are a salable commodity. Un-harvested trees have capital value. Very slow growth rate. Growth follows a sigmoid curve. Growth is effected by environmental factors. |
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Term
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Definition
| An agricultural water pricing scheme. Volumetric pricing, plus a monthly flat fee. Complicated implementation that requires information on amount of water used by each farmer. Measuring devices can be expensive. High efficiency, demand is easily controlled. Rarely used in developing countries. |
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Term
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Definition
| A volumetric water pricing scheme. Price for water is constant over all levels of consumption. |
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Term
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Definition
| A water property rights system that followed prior appropriation doctrine. The state owned all the water rights and had a centralized bureaucracy that administered it. Built waterways and dams to control its flow. |
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Term
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Definition
| An agricultural water pricing scheme. Complicated implementation that requires information on amount of water used by each farmer. Measuring devices can be expensive. High efficiency, demand is easily controlled. Rarely used in developing countries. |
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Definition
| A town which had a tap water E. coli contamination problem in 2000. Seven people died, and 2300 people were seriously ill. The problem was caused by falsified records by Stan and Frank Koeble and the process of bureaucracy not acting quickly enough. |
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Definition
| It is cheaper than diamonds, but more valuable. An essential element of life. Humans depend on it for replacing body fluids, and for food production. |
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Definition
| Water evaporates or transpirates into the atmosphere then precipitates and runs or percolates into the ocean. |
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Definition
| An agricultural water pricing scheme. Requires good pre-established institutions to work. Good efficiency. |
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Term
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Definition
| Too low, causing inefficiency. Because 1. Water is an essential commodity, 2. Prices based on average, not marginal costs, 3. Marginal scarcity rent not included in price, 4. Marginal user cost not included in price, 5. Regulations on water price are implemented because it would be very easy for water companies to monopolize and collect inflated prices. Low water prices lead to water waste. |
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Term
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Definition
| Quantity is not the only issue with water. Some water sources are contaminated with chemicals, radioactive material, salt, or bacteria. Limits the potable water supply. |
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Term
| World Heritage Convention |
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Definition
| An organization that buys land then resells it to owners that will practice conservation activities. |
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