Environmental Economics

Title
Contents
SECTION ONE INTRODUCTION
	1 What Is Environmental Economics?
		Economic Analysis
		The Importance of Incentives
		Incentives: A Household Example
		Incentives and Global Warming
		The Design of Environmental Policy
		Macroeconomic Questions: Environment and Growth
		Benefit–Cost Analysis
		Valuing the Environment
		Suburban Sprawl
		International Issues
		Globalization and the Environment
		Economics and Politics
		Summary
	2 The Economy and the Environment
		Natural Resource Economics
		The Fundamental Balance
		The Environment as an Economic and Social Asset
		Terminology
		Emissions, Ambient Quality, and Damages
		Types of Pollutants
		Cumulative vs. Noncumulative Pollutants
		Local vs. Regional and Global Pollutants
		Point-Source vs. Nonpoint-Source Pollutants
		Continuous vs. Episodic Emissions
		Environmental Damages Not Related to Emissions
		Summary
		Questions for Further Discussion
SECTION TWO ANALYTICAL TOOLS
	3 Benefits and Costs, Supply and Demand
		Willingness to Pay
		Demand
		Aggregate Demand/Willingness to Pay
		Benefits
		Cost
		Opportunity Cost
		Private and Social Costs
		Cost Curves
		The Shapes of Cost Curves
		Technology
		The Equimarginal Principle
		Marginal Cost and Supply
		Summary
		Questions for Further Discussion
	4 Economic Efficiency and Markets
		Economic Efficiency
		Efficiency and Equity
		Markets
		Markets and Social Efficiency
		External Costs
		Open-Access Resources
		External Benefits
		Public Goods
		Summary
		Questions for Further Discussion
	5 The Economics of Environmental Quality
		Pollution Control—A General Model
		Pollution Damages
		Damage Functions
		Damage Functions: A Closer Look
		Damages and Uncertainty
		Damages and Time
		Abatement Costs
		Abatement Cost Functions
		Abatement Cost Functions: A Closer Look
		Aggregate Marginal Abatement Costs
		The Socially Efficient Level of Emissions
		Changes in the Efficient Level of Emissions
		Enforcement Costs
		The Equimarginal Principle Applied to Emission Reductions
		Trade-offs and Politics
		Summary
		Questions for Further Discussion
SECTION THREE ENVIRONMENTAL ANALYSIS
	6 Frameworks of Analysis
		Impact Analysis
		Environmental Impact Analysis
		Economic Impact Analysis
		Regulatory Impact Analysis
		Cost-Effectiveness Analysis
		Damage Assessment
		Benefit–Cost Analysis
		The Basic Framework
		Scope of the Program
		Discounting
		Choice of Discount Rate
		Discounting and Future Generations
		Distributional Issues
		Risk Analysis
		Risk Assessment
		Risk Valuation
		Risk Management
		Summary
		Questions for Further Discussion
	7 Benefit–Cost Analysis: Benefits
		The Damage Function: Physical Aspects
		Measuring Damage Costs Directly
		Health Costs
		The Effects of Pollution on Production Costs
		Materials Damage
		Problems with Direct Damage Approaches
		Willingness to Pay
		Willingness to Pay: Revealed Preference Methods
		The Value of Human Health as Expressed in Averting Costs
		The Value of Human Life as Expressed in Wage Rates
		Valuing Children’s Health
		The Value of Environmental Quality as Expressed in House Prices
		The Value of Environmental Quality and Intercity Wage Differentials
		The Value of Environmental Amenities as Expressed in Travel Costs
		Willingness to Pay: Stated Preference Methods
		Valuing an Environmental Amenity
		Valuing Health Outcomes
		Problems of CV Analysis
		Problems in Benefit Estimation
		Discounting
		Willingness to Pay vs. Willingness to Accept
		Nonuse Values
		Summary
		Questions for Further Discussion
	8 Benefit–Cost Analysis: Costs
		The Cost Perspective: General Issues
		The With/Without Principle
		No-Cost Improvements in Environmental Quality
		The Distribution of Costs
		Concepts of Cost
		Opportunity Costs
		Environmental Costs
		Enforcement Costs
		Costs of Single Facilities
		Costs of a Local Regulation
		Costs of Regulating an Industry
		An Example
		Sources of Cost Data
		Misrepresentation of Costs
		Actual vs. Minimum Pollution Control Costs
		The Effect of Output Adjustments on Costs
		Long-Run Technical Change and Pollution-Control Costs
		Costs at the National Level
		Future Costs and Technological Change
		Summary
		Questions for Further Discussion
SECTION FOUR ENVIRONMENTAL POLICY ANALYSIS
	9 Criteria for Evaluating Environmental Policies
		Efficiency
		Cost Effectiveness
		Fairness
		Environmental Justice
		Incentives for Technological Improvements
		Enforceability
		Materials Balance Issues
		Moral Considerations
		Government Failure
		Summary
		Questions for Further Discussion
	10 Decentralized Policies: Liability Laws, Property Rights, Voluntary Action
		Liability Laws
		The Principle
		Common Law
		Statutory Law
		Property Rights
		The Principle
		Rules and Conditions
		Transactions Costs
		The Absence of Markets
		Markets for Green Goods
		Voluntary Action
		Moral Suasion
		Informal Community Pressure
		Summary
		Questions for Further Discussion
	11 Command-and-Control Strategies: The Case of Standards
		Types of Standards
		Ambient Standards
		Emission Standards
		Technology Standards
		Standards Used in Combination
		The Economics of Standards
		Setting the Level of the Standard
		Uniformity of Standards
		Standards and the Equimarginal Principle
		Standards and Incentives
		Short Run
		Long Run
		Political-Economic Aspects of Standards
		The Economics of Enforcement
		Enforcing Emission Standards
		Enforcing Technology Standards
		General Issues
		Summary
		Questions for Further Discussion
	12 Incentive-Based Strategies: Emission Charges and Subsidies
		Emission Charges
		The Basic Economics
		The Level of the Charge
		Emission Charges and Cost-Effectiveness
		Emission Taxes and Nonuniform Emissions
		Emissions Charges and Uncertainty
		Emission Charges and Tax Revenues
		Emission Charges and the Incentives to Innovate
		Emission Charges and Enforcement Costs
		Other Types of Charges
		Distributional Impacts of Emission Charges
		Abatement Subsidies
		Deposit-Refund Systems
		Summary
		Questions for Further Discussion
	13 Incentive-Based Strategies: Transferable Discharge Permits
		General Principles
		The Initial Rights Allocation
		Establishing Trading Rules
		Reducing the Number of Permits
		Nonuniform Emissions
		CAPs and Problems of Competition
		CAP Programs and Enforcement
		Voluntary Trading
		CAPs and the Incentive for R&D
		CAP and Uncertainty
		Summary
		Questions for Further Discussion
SECTION FIVE ENVIRONMENTAL POLICY IN THE UNITED STATES
	14 Federal Water Pollution–Control Policy
		Types of Water Pollutants
		Federal Policy: A Brief History
		Technology-Based Effluent Standards
		Efficiency and Cost-Effectiveness of TBESs
		Experience with TBESs
		TBESs and Incentives
		TBESs and Enforcement
		The Municipal Wastewater Treatment Plant Subsidy Program
		The Safe Drinking Water Act (SDWA)
		Coastal Water Pollution
		Recent Policy Innovations in Water Pollution Control
		Nonpoint-Source Water Pollution Control
		Total Maximum Daily Load (TMDL) Program
		Emission Trading in Water Pollution Control
		Summary
		Questions for Further Discussion
	15 Federal Air Pollution Control Policy
		Federal Air Pollution Control Laws: A Brief Sketch
		National Ambient Air Quality Standards
		Stationary-Source Control
		Technology-Based Effluent Standards
		Cost-Effectiveness of the TBES Approach
		New Directions in Stationary-Source Control
		The CAP Program of the
		CAA
		How It Works
		The Role of the EPA
		Has It Worked?
		Other CAP Programs
		Mobile-Source Air Pollution Control
		New-Car Emission Standards
		Lead Trading and the Switch to Lead-Free Gas
		The 1990 Clean Air Act
		Clean Cars
		Incentive Issues in Mobile-Source Programs
		Summary
		Questions for Further Discussion
	16 Federal Policy on Toxic and Hazardous Substances
		Economic Issues in Laws Governing Chemicals in Production and Consumer Products
		The “Balancing” Issue
		Uniform Standards
		Differentiated Control
		The Economics of Pest Resistance
		Economic Issues in Federal Policy on Toxic Emissions
		Instrument Choice
		Waste Reduction
		The Management of Hazardous Wastes
		Economic Issues in Handling Current Hazardous Waste
		Incentive-Based Possibilities
		Environmental Justice
		Radioactive Wastes
		Cleaning Up after the Cold War
		Economic Issues in Handling Legacy Hazardous Waste Sites
		Financing Hazardous Waste Site Cleanups
		How Clean Is Clean?
		Brownfields
		Natural Resource Damages (NRD)
		Summary
		Questions for Further Discussion
	17 State and Local Environmental Issues
		Environmental Federalism
		Constitutional Issues
		Efficiency Issues
		Race to the Bottom?
		Policy Innovations at the State Level
		Municipal Solid Waste
		The Nature of the Problem
		Technical Options for Reducing MSW
		Current Policy
		The Economics of Recycling
		Producer Use of Recycled Material
		Consumer Recycling Decisions
		Producer Take-Back Programs
		Land-Use Control Policies
		The Economic Logic of Land-Use Decisions
		Policy Options
		The Regulatory Takings Issue
		Summary
		Questions for Further Discussion
SECTION SIX INTERNATIONAL ENVIRONMENTAL ISSUES
	18 Comparative Environmental Policies
		International Comparisons of Environmental Quality
		Interpreting Differences in Environmental Performance
		Environmental Policy in Other Countries
		National Styles in Environmental Policy
		Guiding Principles of Pollution Control
		Instrument Choices
		Environmental Analysis
		Environmental Policy in Transition Countries
		Developments in Environmental Accounting
		Summary
		Questions for Further Discussion
	19 Economic Development and the Environment
		General Considerations
		Environmental Degradation in Developing Economies
		Economy and Environment
		A Static View
		Sustainability
		Long-Run Relationships
		The Pollution-Haven Hypothesis
		Environmental Policy Choices in Developing Countries
		Benefit–Cost Analysis
		Reducing Environmental Disincentives of Current Policies
		Institutional Policy: Property Rights
		Population Policy as Environmental Policy
		What Types of Environmental Policies?
		The Role of the Developed Countries
		Technology Transfer
		Debt-for-Nature Swaps
		Environmental Values in International Aid Institutions
		Summary
		Questions for Further Discussion
	20 The Global Environment
		Stratospheric Ozone Depletion
		The Physical Problem
		Damages from Ultraviolet Radiation
		Policy Responses
		The Economics of CFC Controls
		Global Warming
		The Physical Problem
		Human and Ecosystem Impacts
		Scientific Uncertainties and Human Choice
		Technical Responses to the Greenhouse Effect
		Reducing Domestic GHG Emissions
		Incentive-Based Approaches for Reducing Greenhouse Gas Emissions
		International Efforts in Global Warming
		The Kyoto Protocol
		A New Global Greenhouse Agreement?
		Biological Diversity
		Summary
		Questions for Further Discussion
	21 International Environmental Agreements
		General Issues
		The Economics of International Agreements
		Bilateral Agreements
		Multilateral Agreements
		The Distribution of Costs
		International Agreements in Practice
		Cost-Effectiveness in Multinational Agreements
		International Trade and the Environment
		Free Trade vs. Environmental Trade Restrictions
		Trade Restrictions to Advance International Environmental Goals
		Summary
		Questions for Further Discussion
APPENDIX Abbreviations and Acronyms Used in the Book
NAME INDEX
SUBJECT INDEX