Environmental Economics Overview
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Questions and Answers

What is a characteristic of good Marine Spatial Planning for MPAs?

  • It should ensure areas are adequately large to support species. (correct)
  • It should avoid creating new protected areas.
  • It should limit stakeholder involvement.
  • It should focus only on popular species.

    • An effective outcome should describe how the program will be accomplished.

    False

    Name one of the activities managed in Fiji’s Locally Managed Marine Areas (LMMA).

    community-based fishing

    Marine spatial planning can help create different zones for different __________.

    <p>stakeholders</p> Signup and view all the answers

    Match the following types of marine areas with their descriptions:

    <p>No-Take Zones = Areas where fishing is prohibited Locally Managed Marine Areas = Community-driven marine management Zoning Plans = Strategies to organize marine activities Marine Protected Areas = Designated regions for conservation efforts</p> Signup and view all the answers

    What model suggests that society will experience resource depletion within less than 100 years without major changes?

    <p>Pessimist model</p> Signup and view all the answers

    The strong vision of sustainability allows for perfect substitutability between environmental, economic, and social capitals.

    <p>False</p> Signup and view all the answers

    What term describes the value people assign to goods even if they never use them?

    <p>Non-use value</p> Signup and view all the answers

    The economic consideration of costs that includes resources traded on markets is known as ________ costs.

    <p>Private</p> Signup and view all the answers

    Match the following visions of sustainability with their characteristics:

    <p>Strong vision = No substitution possible Weak vision = Perfect substitutability Pessimist model = Resource depletion within 100 years Optimistic model = Human resourcefulness prevails</p> Signup and view all the answers

    Which economic approach favors strong sustainability and natural capital preservation?

    <p>Ecological economics</p> Signup and view all the answers

    According to the optimistic model, pollution levels have declined alongside population and income increases.

    <p>True</p> Signup and view all the answers

    What is the name of the method that can be used to determine how much individuals are willing to pay for environmental goods when no market exists?

    <p>Contingent valuation</p> Signup and view all the answers

    The ________ curve reflects the relationship between economic development and environmental concern.

    <p>Environmental Kuznets</p> Signup and view all the answers

    What is the primary aim of Marine Spatial Planning (MSP)?

    <p>To protect habitats and biodiversity while minimizing human impact</p> Signup and view all the answers

    All levels of protection in MPAs allow for the same amount of extractive activities.

    <p>False</p> Signup and view all the answers

    What is one key component that MSP integrates to identify MPA sites?

    <p>Ecological data</p> Signup and view all the answers

    A broad statement of what the MPA is trying to achieve is referred to as a ______.

    <p>goal</p> Signup and view all the answers

    Match the following terms with their definitions:

    <p>Goal = A qualitative outcome that is difficult to measure Objective = A specific, measurable outcome Stakeholder input = Contributions from individuals or groups affected by MSP Ecological data = Information related to living organisms and their environment</p> Signup and view all the answers

    What is vital for each level of protection in an MPA?

    <p>Effective design, compliance, and enforcement</p> Signup and view all the answers

    Marine Spatial Planning only considers ecological factors.

    <p>False</p> Signup and view all the answers

    What is the relationship between conservation goals and societal needs in MSP?

    <p>Fostering sustainable coexistence</p> Signup and view all the answers

    Marine Protected Areas (MPAs) are established to protect __________ and __________.

    <p>biodiversity, habitats</p> Signup and view all the answers

    Match the marine activities with their nature regarding MPA protection levels:

    <p>Fishing = Extractive activity Tourism = Potentially disruptive activity Conservation efforts = Non-extractive activity Research = Permitted under regulated conditions</p> Signup and view all the answers

    What is the primary purpose of a cap and trade market?

    <p>To reduce greenhouse gas emissions</p> Signup and view all the answers

    Companies that emit less than their allowance can sell their surplus permits.

    <p>True</p> Signup and view all the answers

    Who sets the emissions cap in a cap and trade market?

    <p>A regulatory authority</p> Signup and view all the answers

    In a cap and trade system, companies must purchase additional permits if they exceed their ______.

    <p>limits</p> Signup and view all the answers

    Match the following terms related to cap and trade with their definitions:

    <p>Carbon credits = Permits that allow a company to emit a specific amount of GHGs Emissions allowances = The maximum amount of GHGs that can be emitted Regulatory authority = Entity that sets the emissions cap Surplus permits = Permits that can be sold if emissions are below the allowance</p> Signup and view all the answers

    Which of the following is NOT a characteristic of a cap and trade market?

    <p>It allows unlimited emissions without penalties</p> Signup and view all the answers

    Carbon markets and carbon taxes are always managed by the same entities.

    <p>False</p> Signup and view all the answers

    What is a common characteristic of the CAC approach in environmental policy?

    <p>It mandates behavior through enforcement.</p> Signup and view all the answers

    Emission standards do not affect the number of pollution sources allowed.

    <p>True</p> Signup and view all the answers

    What is a Pigouvian tax?

    <p>A tax set at the optimal marginal cost for each unit emitted to minimize costs associated with emissions.</p> Signup and view all the answers

    Incentive-based policies include taxes, subsidies, and __________.

    <p>transferable permits</p> Signup and view all the answers

    Match the following pollution control mechanisms with their characteristics:

    <p>CAC approach = Mandated behavior through legal enforcement Pigouvian tax = Tax for each unit of pollution emitted Subsidy = Payment for reducing emissions Technology standard = Mandates specific practices for pollution control</p> Signup and view all the answers

    What is one disadvantage of using standard regulations in environmental policy?

    <p>They can be expensive and complicated to enforce.</p> Signup and view all the answers

    Subsidizing emissions reductions has a uniform impact across all competitors.

    <p>False</p> Signup and view all the answers

    Name one type of incentive-based policy used in environmental control.

    <p>Tax or subsidy or transferable permit</p> Signup and view all the answers

    The __________ principle states that each source should reduce emissions until its marginal abatement cost equals the tax charge.

    <p>equimarginal</p> Signup and view all the answers

    Which of the following is NOT a feature of incentive-based policies?

    <p>They are imposed directly by law.</p> Signup and view all the answers

    Study Notes

    Environmental Economics Key Points

    • Environmental economics is the application of economic principles to understand and protect the environment.
    • It involves using economic tools to value intangible aspects of the environment which are not typically assigned a monetary value.
    • The goal is to guide decision-makers on how to protect the environment, by aligning with the consumer's concerns.
    • It addresses market failures in a way that encompasses the environment, also known as externalities which are lessened.

    Incentives

    • Punitive ecology is a top-down approach to force people to change, through Pigouvian taxes (or financial incentives) to control people and their behavior.
    • Subisidies to incentivize positive externalities, such as renewable energy are also a possibility.
    • France-relance 2030 is a government program designed to encourage environmentally friendly technology and renovations in buildings and university campuses.

    Sustainable Development

    • There are three pillars - economic, social, and environment - in sustainable development with a focus on finding an optimal development of resources that are created with society in mind.
    • The development of resources should not always be correlated to growth; a circular economy is a more regenerative option rather than the linear take-make-dispose approach. The reuse of materials rather than depletion of resources is essential.

    Policy Tools and Incentives

    • Nudges = encouraging people to make a decision unconsciously, by using monetary or actions.
    • Government decisions top-down/ centralised, such as taxes on plastic bags to influence consumer behavior.
    • Eg. Norway CO2 emission tax for carbon transport to ships to reward ships that are emitting less.

    Use value, Option value, Altruistic value, and other concepts

    • Use value: value people derive from the direct use of a good
    • Option value: keeping a resource available for if needed at a point in the future
    • Altruistic value: value placed on a good regardless of personal use but for the sake of others.
    • Marginal cost: per unit, more production decreases the unit cost
    • Cost assessment: use a before/after comparison to assess costs

    Circular economy and thermodynamics

    • Circular economy = maintains development on the long term and tries to control populations by using policies.
    • This idea is a response to the finite nature of resources and the need to reuse them to maintain resource/energy use by considering thermodynamic laws
    • Links to thermodynamics: wastes produced from consumption lose energy, therefore recycling practices are essential.

    Thermodynamics

    • First law: Energy and matter cannot be created or destroyed.
    • Second law: Over time, the availability of usable energy decreases
    • Concept of spaceship economy: Earth is a closed system with limited resources and space, requiring sustainable management.

    Economic concepts

    • Externalities: costs/action on the environment that aren't included in the price of the product.
    • Externalities can be social ie production of laptops having social externality through child labour
    • Willingness-to-pay: Customer's value on what they are ready to pay for a product/service
    • Use value: Derived value from the direct use of the good
    • Option value: Value for maintaining a good /resource for uncertainty about future use
    • Altruistic value: Value for others' use

    Policy Tools and Approaches

    • Decentralized policies: eg. liability laws, property rights and voluntary initiatives. Encourage self-regulations
    • Command-and-control policies: Standards or norms that dictate specific environmental performance levels or practices. Often involve strict enforcement.
    • Incentive-based policies: eg. Taxes, subsidies, and transferable permits that provide economic incentives for sustainable practices. Alter the economic landscape, incentivizing good choices.

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    Description

    This quiz covers key concepts in environmental economics, including the application of economic principles to environmental protection. It addresses market failures and explores various incentives such as punitive ecology and subsidies aimed at promoting positive environmental outcomes. Additionally, it touches on sustainable development initiatives.

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