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Natural Resources, the Environment and Agriculture
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  1. Natural Resources,the Environmentand Agriculture Chapter 10

  2. Topics of Discussion • Agriculture and the environment • Economics of the environment • Economics of resources in agriculture • Soil quality and quantity • Economics of soil conservation • Government policies for agriculture, natural resourcs, and the environment

  3. Interactions with natural resources and the environment Page 211

  4. Agriculture and the Environment • Water pollution • Air pollution • Global warming • Other environmental impacts Pages 212-216

  5. Water pollutants range from nutrients to PCBs which are known to cause cancer. Page 213

  6. The greenhouse effect Page 213

  7. Temperature record over the past 150 years Page 215

  8. Efficient level of abatement Page 217

  9. Efficient Property Rights • Enforceability: security of individual rights • Transferability: can be transferred from one individual to another • Exclusivity: all associated benefits and costs are received by only the owner of the asset Pages 217-218

  10. Efficiency and damage from externalities Page 218

  11. Cost Effective Policies • Command-and-Control policies • Taxes and subsidies • Transferable rights Pages 217-218

  12. Cost of abatement if one or both firms abate Page 221

  13. Taxes and subsidies inducements to abate pollution. Page 222

  14. Economics of Soil Use • Soil quality and quantity • Economics of conservation • Characteristics of soil • Present value of soil resources • The Dust Bowl Pages 224-227

  15. Water as an Asset • Surface water • Profitability of water use • Prior appropriation rights • Groundwater • Conditions for efficient use • Rate of recharge for aquifers • Transferable rights Pages 227-229

  16. Marginal revenue and profit from water use for two identical farmers. Page 228

  17. Government Policies • Soil erosion policies and the Conservation Reserve Program • Purpose of the CRP • Direct and indirect effects • Other federal incentive programs • Environmental Quality Incentives Program • Wetlands Reserve Program • Environmental regulations • Endangered Species Act Pages 230-232

  18. Summary • Economists play a role in designing policies at affect the environment and natural resources. • Incentives matter when designing policies at achieve desired objectives. • Agriculture impacts the environment through water pollution, air pollution, global warming among other ways. • Water and soil are assets that have value and net benefits associated with their use. • Government plays an active role in guiding and regulating the use of resources and impact on environment.

  19. Chapter 11 discusses other forms of governmental intervention, including price and income supports…