Economics and the Environment

Cover......Page 1
Title Page......Page 5
Copyright......Page 6
Contents......Page 7
Preface......Page 13
1.0 Introduction......Page 18
1.1 Four Questions......Page 19
1.2 How Much Pollution Is Too Much?......Page 23
1.3 Is Government Up to the Job?......Page 28
1.4 How Can We Do Better?......Page 29
1.5 Can We Resolve Global Issues?......Page 31
1.6 Summary......Page 33
Part I How Much Pollution Is Too Much?......Page 38
2.0 Introduction......Page 39
2.1 Utility and Utilitarianism......Page 40
2.2 Social Welfare......Page 42
2.3 Summary......Page 45
3.0 Introduction......Page 48
3.1 The Open Access Problem......Page 50
3.2 The Public Goods Problem......Page 55
3.3 Is Sustainable Business a Solution?......Page 58
3.4 Summary......Page 59
4.1 Efficiency Defined......Page 64
4.2 Efficient Pollution Levels......Page 67
4.3 Marginals and Totals......Page 71
4.4 The Coase Theorem Introduced......Page 73
4.5 Air Pollution Control in Baltimore: Calculating the Efficient Standard......Page 74
4.6 The Ethical Basis of the Efficiency Standard......Page 75
4.7 Real-World Benefit-Cost......Page 76
4.8 Summary......Page 80
5.0 Introduction......Page 90
5.1 Use, Option, and Existence Value: Types of Nonmarket Benefits......Page 91
5.2 Consumer Surplus, WTP, and WTA: Measuring Benefits......Page 92
5.3 Risk: Assessment and Perception......Page 95
5.4 Measuring Benefits I: Contingent Valuation......Page 98
5.5 Measuring Benefits II: Travel Cost......Page 102
5.6 Measuring Benefits III: Hedonic Regression......Page 103
5.7 The Value of Human Life......Page 104
5.8 Summary......Page 107
6.0 Introduction......Page 117
6.1 Engineering Costs......Page 118
6.2 Productivity Impacts of Regulation......Page 120
6.3 Employment Impacts of Regulation......Page 123
6.4 General Equilibrium Effects and the Double Dividend......Page 129
6.5 A Final Look at Benefit-Cost Analysis......Page 130
6.6 Summary......Page 133
7.0 Introduction......Page 140
7.1 Defining the Right to Safety......Page 141
7.2 The Safety Standard: Inefficient......Page 143
7.3 The Safety Standard: Not Cost-Effective......Page 145
7.4 The Safety Standard: Regressive?......Page 146
7.5 Siting Hazardous Waste Facilities: Safety versus Efficiency......Page 149
7.6 Summary......Page 152
8.0 Introduction......Page 157
8.1 Sustainability: Neoclassical and Ecological Approaches......Page 158
8.2 Future Benefits, Costs, and Discounting......Page 162
8.3 An Example of Discounting: Lightbulbs......Page 164
8.4 Savings, Investment, and Market Interest Rates......Page 166
8.5 The Social Discount Rate and Dynamic Efficiency......Page 167
8.6 Discounting Climate Change......Page 170
8.7 Ecological Economics, Strong Sustainability, and the Precautionary Principle......Page 171
8.8 Strong Sustainability in Practice: Endangered Species, EIS, and Reach......Page 173
8.9 Summary......Page 175
9.0 Introduction......Page 182
9.1 Malthus and Ecological Economics......Page 183
9.2 Modern Debates: Limits to Growth and Planetary Boundaries......Page 186
9.3 Measuring Strong Sustainability: Impacts and Footprints......Page 189
9.4 Measuring Weak Sustainability: Net National Welfare and Inclusive Wealth......Page 193
9.5 Natural Capital Depreciation......Page 198
9.6 Are We Achieving Sustainability?......Page 201
9.7 Discounting, Sustainability, and Investing for the Future......Page 206
9.8 The Ecological-Neoclassical Debate in Context......Page 208
9.9 Summary......Page 209
10.0 Introduction......Page 217
10.1 Nonrenewable Resources and the Hotelling Model......Page 219
10.2 Testing the Nonrenewable Resource Model......Page 225
10.3 "Peak Oil''......Page 226
10.4 Renewable Resources......Page 230
10.5 Renewable Resource Policy: Fisheries and Endangered Species......Page 236
10.6 Ecosystem Services and Natural Capital......Page 240
10.7 Summary......Page 243
11.0 Introduction......Page 251
11.1 Money and Happiness......Page 252
11.2 Social Norms and the Rat Race......Page 253
11.3 Positional Goods and Consumption Externalities......Page 257
11.4 Welfare with Social Consumption......Page 259
11.5 Controlling the Impact of Consumption......Page 261
11.6 Summary......Page 264
Part II Is Government Up to the Job?......Page 269
12.0 Introduction......Page 271
12.1 The Process of Environmental Regulation......Page 272
12.2 Regulation under Imperfect Information......Page 274
12.3 Bureaucratic Discretion and Political Influence......Page 276
12.4 Who Wins the Influence Game?......Page 278
12.5 Political Reform of Regulation......Page 281
12.6 Better Information, More Democracy......Page 283
12.7 Summary......Page 285
13.0 Introduction......Page 290
13.1 Cleaning the Air......Page 291
13.2 Fishable and Swimmable Waters......Page 296
13.3 Hazardous Waste Disposal on Land......Page 298
13.4 Chemicals and Pesticides......Page 301
13.5 Endangered Species Protection......Page 304
13.6 Summary......Page 306
14.0 Introduction......Page 310
14.1 Accomplishments of Environmental Regulation......Page 311
14.2 Monitoring and Enforcement: Political Constraints......Page 315
14.3 The Appeal of Incentive-Based Regulation......Page 318
14.4 Beyond Regulation? Promoting Clean Technology......Page 320
14.5 Summary......Page 323
Part III How Can We Do Better?......Page 328
15.0 Introduction......Page 329
15.1 The Cost-Effectiveness Rule......Page 330
15.2 IB Regulation and Cost-Effectiveness......Page 334
15.3 IB Regulation and Technological Progress......Page 337
15.4 Potential Problems with IB Regulation......Page 339
15.5 Summary......Page 346
16.0 Introduction......Page 362
16.1 Lead and Chlorofluorocarbons......Page 363
16.2 Trading Urban Air Pollutants......Page 364
16.3 Marketable Permits and Acid Rain......Page 368
16.4 Carbon Trading in the Northeast and California......Page 372
16.5 Two Failed U.S. Efforts: Mercury and Carbon......Page 375
16.6 The European Emissions Trading System......Page 378
16.7 Pollution Taxes and Their Relatives......Page 380
16.8 Summary......Page 384
17.0 Introduction......Page 390
17.1 Path Dependence and Clean Technology......Page 391
17.2 Clean Technology Defined......Page 393
17.3 If You're So Smart, Why Aren't You Rich?......Page 396
17.4 Picking the Winning Path......Page 400
17.5 Promoting Early-Stage Clean Technologies......Page 401
17.6 Promoting Late-Stage Clean Technologies......Page 404
17.7 Clean Technology: Two Case Studies......Page 408
17.8 Summary......Page 413
18.0 Introduction......Page 419
18.1 Technology Options: Electricity and Heat......Page 420
18.2 Policy Options: Electricity and Heat......Page 427
18.3 Technology Options: Transport......Page 433
18.4 Policy Options: Transport......Page 438
18.5 Slowing Global Warming at a Profit?......Page 442
18.6 Summary......Page 444
Part IV How Can We Solve Global Challenges?......Page 449
19.0 Introduction......Page 451
19.1 Poverty and the Environment......Page 453
19.2 The Population Picture in Perspective......Page 457
19.3 An Economic Approach to Family Size......Page 459
19.4 Controlling Population Growth......Page 461
19.5 Consumption and the Global Environment......Page 466
19.6 Envisioning a Sustainable Future......Page 469
19.7 Summary......Page 472
20.0 Introduction......Page 476
20.1 The Political Economy of Sustainable Development......Page 477
20.2 Ending Environmentally Damaging Subsidies......Page 479
20.3 Establishing and Enforcing Property Rights......Page 481
20.4 Regulatory Approaches......Page 484
20.5 Sustainable Technology: Development and Transfer......Page 489
20.6 Resource Conservation and Debt Relief......Page 492
20.7 Trade and the Environment......Page 497
20.8 Summary......Page 502
21.0 Introduction......Page 508
21.1 Agreements as Public Goods......Page 509
21.2 Monitoring and Enforcement......Page 510
21.3 The Ozone Layer and Biodiversity......Page 512
21.4 Stopping Global Warming: Theory......Page 517
21.5 Stopping Global Warming: Reality......Page 521
21.6 Summary......Page 523
Selected Web Sites......Page 528
Author Index......Page 531
Subject Index......Page 535