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Environmental Economics - Coggle Diagram
Environmental Economics
Unit 1. The environment and the economy
Environmental issues
Pollution
Air
Water
Soil
Deforrestation
Biodiversity loss
Greenhouse emmision
CO2
N2
CH4
Ozone layer depletion
Radioactive waste
The environment
Offers goods
Renewable
Solar, wind and water energy
Fish
Forrest
If cut down slowly, it reappears automatically
Depletable
Non renewable (fossil fuels)
Gas
Oil
Coal
Uranium
Gold :red_cross:
Yes it's non renewable, but it's not a fossil fuel
COP = conference of the parties Started in 1995
Laws
Thermo Dynamics
Energy can not be created or destroyed (it simply changes shape or form).
Enthropy
All physical processes create useful and useless energy
Perfect recycling doesn't exist
Solar energy is also not 100% renewable
Flow resources
Wind energy
Solar energy
Biosphere
Global ecosystem (self organized system)
Contains the ozon layer
Organisms
Different streams of Economy
Ways to categorize
Persistant vs passing
Concentrated vs spread out
Biotic (alive) vs non biotic (like rocks or water)
Stable vs non stable
Atmosphere and sea level fairly stable
Principles of thermodynamics
1st principle = the conservation law: energy cannot be created nor destroyed
2nd principle
= law of enthropy: all physical processes create useful and useless energy
Unit 2. Neoclassical economics as a foundation for environmentaleconomics
Classical
created by the physiocrats from France
Renescant wealth
Growth and GDP was considered good and with infinite possibilities
Real classical
Post physiocratic 19th century
Capital
Shifted from land to labour and capital
Neoclassical
Supply and demand
Before 1960s
concern for coal
utilitarianism as a philosophy
Consumption of goods brings pleasure and hapiness
After 1960s
Technology was considered our savior
No worries about unrenewable resources :warning:
Rebound effect
The more accesable tech becomes, the more people depend on it and even though the efficiency increases, the environment is doing worse
Cars
Phones
Environmental
Pareto optimum
To further increase utility of one person without decreasing another person's
Relies on neoclassical economic models, aiming to integrate environmental costs into market systems and optimize resource use within existing economic structures.
Key concepts
Market-Based Solutions: Emphasizes market-based approaches like carbon pricing, taxes, and tradable permits to address environmental issues.
Externalities: Focuses on correcting market failures caused by externalities (e.g., pollution) through regulation or incentives.
Unit three is def an explanation of Environmental Economics
Cost-Benefit Analysis: Utilizes cost-benefit analysis to evaluate the economic efficiency of environmental policies and projects.
After 1960s the influence started getting bigger
Utilitarianism
maximize well being
Marginal revolution
Equilibrium
Qd = Qs
Surplus
In the 19th century prices were made based on how much labor went into the product.
Now they also consider how much more they'll enjoy or benefit from having a little bit more of it.
Utility
Cardinal
Exact ratio
Measuring throug imaginary units
Ordinal
When you can put it into an
order
but you can't really compare it
:pencil2:what do like most?
Elephant 2. Giraffe 3. Tigre
Marginal
Adding more products doesn't mean their value remains as high
Example with apples
Monetary value
Money
Ecological Economists
- offered a holistic, interdisciplinary approach, emphasizing sustainability and the economy's integration with ecological systems.
Biosphere is included in the market
When it comes to waste and pollution you must
Reduce
Or compensate
Go deeper into the interdisciplenary nature of Economy and Ecology. It's all considered as one system
They try to change systems of thinking
How :question:
Justice and social equity
:pencil2: Donut Economy
Unit 9 and 10 are Ecological ways of thinking
After 1980s
Unit 3. THE ENVIRONMENTAL DEGRADATION OF TOURISMDESTINATIONS AS A MARKET FAILURE
Market Failure
Externalities
Negative
Positive
Measured in physical units
Pareto relevant
Public goods
Everybody can make use of it (non-excludable)
:pencil2:Light - National Defens
Non
Rivalrous
Places on the beach / bus :pencil2:
Open acces resources
Everybody makes use of the same goods
Only people that pay taxes really deserve it
Free rider
Rivalrous
: The use of the resource by one individual reduces its availability to others.
Non Excludable
Definition = inefficient distribution of goods and services in the free market
There is no market for Environmental processes :red_flag:
:unlock:Environmental tax
How to ensure Pareto Optimum?
Natural goods are valued based on their ability to generate wealth. If there's no desire for it, there is no price
Environmental functionns and services
categories of ecosystem services
Provisioning
Cultural
Regulation
Supporting
Bleh
Health
Secuirity
Satisfaction of basic human needs
Social cohesion
Interactions between nature and the economy
Waste disposal
Natural resources
Recreation
Ecological definition: Nature is an integrated and highly sensitive system supporting all forms of life
David Pierce 1976 :unlock:
Unit 4. The economic value of natural tourist attractions
In order to design Environmental Policy Analysis :goal_net:
The government can decide the opitum Social and Marginal revenues are high, whereas the costs are low
How to deal with the land
Fertilizers
Water sources
Air quality has to be managed by all of us
Positive Externalities
When you give something to the envrionment
Compensation
Social margins
Cost
Revenue
Unit 5.
Unit 6. Cost Benefit Analysis
Decision making tool
2 types
Cost
Social
Financial
Benefit
Social
Financial
Different perspectives
Pareto
No individual should have negative consequences otherwise it shouldn't be implemented
Practically impossible :lock:
Kaldor Hicks
Total has to be positive in order to go along with the project
General good profits from it :check:
Public perspective
Used for consequences of whole society
What is the use of discounting the future?
The concept is similar to inflation
Public
Economic
Social CBA
Private CBA
Financial CBA
Unit 7. Critical reflections on monetary valuation
Prices
They only reflect the marginal utility :lock:
So if something is useless to people, it doesn't get assigned a market value, even though it might be useful to the ecosystem
This is applicable for both positive and negative externalities
Criticism by Ecological E. on Environmental E.
Can economic rationality be extended to something as complex as nature?
Planetary boundaries
Boundaries already crossed
Nitrogen cycle, identified in 2009
Climate change
Bioshpere integrity
Freshwater change
Fresh
Green
Landmass change
Biochemical flows
Novel entity
Not yet crossed
Ocean acidification
atmospheric aerosal loddiny
Stratoshperic ocean depletion
Thresholds is the limit of sustainability
Feedback loop
When they affect each other
Perma frost
Methane gets released
Glacier melting
looses white color and reflection
Donut Economy
Rational Economic man
Unit 8 - Environmental Policy tools
Strongly related to article of Carbon Credits
For a vacation, your Carbon Emmission can be calculated
Net
Subtracted by your normal emmission back home
Gross
Pollution doesn't have a market price :lock:
Pigouvian tax
A Pigouvian tax is a tax imposed on activities that generate negative externalities, which are harmful effects experienced by others that are not reflected in the cost of the activity. The goal of the tax is to correct these market failures by making the cost of the activity reflect its true social cost.
Social optimum
Environmental Economics uses
market based tools
to incentivize civilians to minimize negative externalities
:pencil2: Pollution tax
Compensation
First the Carbon Offset has to be verified by an external company
REDD
Then a external company is hired to plant trees
VERRA
A company like Shell pollutes too much and wants to compensate
Greenwashing :!?:
In order to emit, one must get a
emission permit
Unit 9 - Growth and conversation in Tourism Destinations
Decontemination
Kuznets curve
Shows that at a certain point of wealth the inequality starts to decline
And after a longer period of wealth they start to produce in other countries
Also money can be invested in Education
At the latest stage: Social safety nets, progressive taxation, and other redistributive policies also help reduce inequality.
The initial benefit is only for a small group of people because new industries and economic opportunities typically benefit a small segment of the population initially, often those who are already better off or have specific skills.
Debates
It was evident that the US used too much fuel after the report of
energy and society from 1955
In 1960s more different views were highlited
Fossil fuels will lead to a phase of decline
solar energy is the future
1972 -
limits to growth
book was publised
Six variables were investigated
Population
level of natural resources
Pollution
Capital
Captial investment in Agriculture
Quality of life
Conclusion
Instead of focussing on grwoth we should preserve our natural resources and focus in distributing wealth more evenly
1987 - two limits to growth
a) Biophysical limits arising from the thermodynamicslaws and the fragility of ecosystems.
b) Social limits relating to desirability (rather thanfeasibility) of growth:
Transmaterialization
How many tonnes of fossil fuels have to be burnt in order to create the material that you need
Digital infrastructure
Electric cars
Are made up much more resource demanding material then traditional car, even though once driving they are more sustainable, the initial pollution of the production is very high
involves the equivalent of about 2-5 tonnes of fossil fuel :black_flag:
The minerals are also taken into consideration
Non renewable
Won through mining activities
Different perspectives on growth and the trajectory of the economy and the environment
Optimist
Economy has always been dynamic
Pessimist
World is going to shit
Oppurtunist
We will find solutions
Technocrat
If we invest in research and development we might find a technical solutions
Unit 10 - Sustainability in tourism destinations
Sustainable growth, without compromising the future!
Causes deteriorating the planetary resource base
1) Economic growth (in the form of energy and materialconsumption)
2) Population growth
3) Increasing inequality in international income andwealth distribution
A system is sustainable when these operations are followed
1) Deciding which system (sub-systems/characteristics ofthese) are to be preserved over time.
2) Setting the time scale: how long the living conditions ofthese systems are to be maintained (sustained).
3) Specify when to assess whether this system (subsystems/their characteristics) has survived or endured.
Precautionary approach
Carrying capacity
How many living beings can an ecosystem provide for
If this boundary is crossed, it will have consequences :!: