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Chapter 27

Chapter 27. Dollars and Environmental Sense: Economics of Environmental Issues. The Economic Importance of the Environment. Environmental Economics The study of relationships of the importance of the environment to the economy Includes:

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Chapter 27

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  1. Chapter 27 Dollars and Environmental Sense: Economics of Environmental Issues Botkin and Keller Environmental Science 5e

  2. The Economic Importance of the Environment • Environmental Economics • The study of relationships of the importance of the environment to the economy • Includes: • The impact of environment as a result of economic activity • Regulation of the economy and economic processes • The objective of balancing environmental and economic goals of society • Development of economic policy to minimize environmental degradation • Finding solutions to environmental problems Botkin and Keller Environmental Science 5e

  3. The Environment as a Commons • Commons: • Land or another resources owned publicly with public access for private uses Botkin and Keller Environmental Science 5e

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  6. Externalities • Externality (Indirect Cost) • An effect not normally accounted for in the cost-revenue analysis of producers and often not recognized by them as part of their costs and benefits • Direct Costs • Those borne by the producer and passed directly on to the user or purchaser Botkin and Keller Environmental Science 5e

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  8. Risk-Benefit Analysis • Def: The riskiness of a present action in terms of its possible outcomes • The relation between risk and benefit affects our willingness to pay for an environmental good Botkin and Keller Environmental Science 5e

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  10. Evaluation of environmental intangibles is becoming more common in environmental analysis • When quantitative, such evaluation balances the more traditional economic evaluation and helps separate facts from emotion in complex environmental problems Botkin and Keller Environmental Science 5e

  11. How Do We Achieve an Environmental Goal? • Moral suasion • Direct controls • Market processes • Government investment • Many controls have been applied to the use of desirable resources and the control of pollution Botkin and Keller Environmental Science 5e

  12. Marginal Costs and the Control of Pollutants • Marginal Costs: the cost to reduce one additional unit of pollutant • 3 methods of direct control of pollution • Setting maximum levels of emission • Requiring processes and procedures • Charging fees for emission Botkin and Keller Environmental Science 5e

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