1. Introduction 1 Definitions and Concepts of

Transcript:1. Introduction 1 Definitions and Concepts of:
1. Introduction 1 Definitions and Concepts of basic terms The emergence of resource and environmental economics Why Study Environmental Economics 2 1.1. Definitions and Concepts of basic terms Natural resources: Are those sources and powers of nature that are or can be used by human individuals for production or consumption. Found in nature and include arable land, oil, minerals, rivers, forests, air quality and oceans. Have the potential to support a variety of primary (extractive), secondary (manufacturing) and even tertiary (service) industries. 3 Natural resources can be classified in various ways 4 Renewable resources Flow Resources Stock Resources Non renewable / exhaustible/ depletable resources Natural resources Flow resources: The level of use today does not itself have any implications for the availability of tomorrow. Examples, solar radiation and the power of the wind. Stock resources: Plant & animal populations and mineral deposits, have the characteristic that today’s use has implications for tomorrow’s availability. renewable resources: Are biotic, plant and animal populations, and have the capacity to grow in size over time, through biological reproduction. non-renewable resources: Are abiotic, stocks of minerals, and do not have that capacity to grow over time. 5 non-renewable resources are sometimes referred to as ‘exhaustible’, or ‘depletable’, resources. This is because there is no positive constant rate of use that can be sustained indefinitely – eventually the resource stock must be exhausted. Renewable resources are exhaustible if harvested for too long at a rate exceeding their regeneration capacities. In considering the efficiency and optimality of stock resources use, we must take account not only of use at a point in time but also of the pattern of use over time. 6 Common pool resources: Rival in consumption but not excludable. E.g., Common grazing land, ground water, public forest, rivers, fisheries People can use common resources without paying, so they tend to overuse them. Therefore, governments try to limit the use of common resources. 7 Public goods Are goods that are non rival in consumption and/or their benefits are non-excludable E.g: roads, education... Characteristics Non-rival: my consumption does not diminish what is available for you. Non-excludable: A good is non excludable if once produced, no one can be excluded from enjoying its benefits. 8 Pollution: Any chemical or physical change in the environment due to waste emission harmful to any living organism. Given that not all emissions of waste damage the environment. 9 Externalities: Unintentional side