Environmental and Natural Resource Economics (The Pearson Series in Economics) by Tietenberg, Thomas H. -- Read -- Imperial Library of Trantor

Index

Half Title Title Page Copyright Page Table of Contents Preface 1 Visions of the Future

Introduction

The Self-Extinction Premise EXAMPLE 1.1 A Tale of Two Cultures

Future Environmental Challenges

Climate Change Water Accessibility

Meeting the Challenges How Will Societies Respond?

The Role of Economics DEBATE 1.1 Ecological Economics versus Environmental Economics The Use of Models EXAMPLE 1.2 Experimental Economics: Studying Human Behavior in a Laboratory

The Road Ahead

The Issues DEBATE 1.2 What Does the Future Hold? An Overview of the Book

Summary Discussion Questions Self-Test Exercise Further Reading

2 The Economic Approach: Property Rights, Externalities, and Environmental Problems

Introduction The Human–Environment Relationship

The Environment as an Asset The Economic Approach EXAMPLE 2.1 Economic Impacts of Reducing Hazardous Pollutant Emissions from Iron and Steel Foundries

Environmental Problems and Economic Efficiency

Static Efficiency

Property Rights

Property Rights and Efficient Market Allocations Efficient Property Rights Structures Producer’s Surplus, Scarcity Rent, and Long-Run Competitive Equilibrium

Externalities as a Source of Market Failure

The Concept Introduced Types of Externalities EXAMPLE 2.2 Shrimp Farming Externalities in Thailand Perverse Incentives Arising from Some Property Right Structures Public Goods Imperfect Market Structures EXAMPLE 2.3 Public Goods Privately Provided: The Nature Conservancy Asymmetric Information Government Failure

The Pursuit of Efficiency

Private Resolution through Negotiation—Property, Liability and the Coase Theorem Legislative and Executive Regulation EXAMPLE 2.4 Can Eco-Certification Make a Difference? Organic Costa Rican Coffee

An Efficient Role for Government Summary Discussion Questions Self-Test Exercises Further Reading

3 Evaluating Trade-Offs: Benefit-Cost Analysis and Other Decision-Making Metrics

Introduction Normative Criteria for Decision Making

Evaluating Predefined Options: Benefit-Cost Analysis Finding the Optimal Outcome Relating Optimality to Efficiency Comparing Benefits and Costs across Time Dynamic Efficiency

Applying the Concepts

Pollution Control Estimating Benefits of Carbon Dioxide Emission Reductions EXAMPLE 3.1 Does Reducing Pollution Make Economic Sense? Evidence from the Clean Air Act EXAMPLE 3.2 Using the Social Cost of Capital: The DOE Microwave Oven Rule Issues in Benefit Estimation Approaches to Cost Estimation The Treatment of Risk Distribution of Benefits and Costs Choosing the Discount Rate EXAMPLE 3.3 The Importance of the Discount Rate

Divergence of Social and Private Discount Rates

DEBATE 3.1 Discounting over Long Time Horizons: Should Discount Rates Decline? A Critical Appraisal

Cost-Effectiveness Analysis Impact Analysis Summary Discussion Questions Self-Test Exercises Further Reading

4 Valuing the Environment: Methods

Introduction Why Value the Environment?

DEBATE 4.1 Should Humans Place an Economic Value on the Environment?

Valuation

Types of Values Classifying Valuation Methods Stated Preference Methods DEBATE 4.2 Willingness to Pay versus Willingness to Accept: Why So Different? EXAMPLE 4.1 Leave No Behavioral Trace: Using the Contingent Valuation Method to Measure Passive-Use Values Revealed Preference Methods EXAMPLE 4.2 Using the Travel Cost Method to Estimate Recreational Value: Beaches in Minorca, Spain Benefit Transfer and Meta Analysis Using Geographic Information Systems to Enhance Valuation EXAMPLE 4.3 Using GIS to Inform Hedonic Property Values: Visualizing the Data Challenges EXAMPLE 4.4 Valuing the Reliability of Water Supplies: Coping Expenditures in Kathmandu Valley, Nepal DEBATE 4.3 Distance Decay in Willingness to Pay: When and How Much Does Location Matter? Valuing Human Life DEBATE 4.4 What Is the Value of a Polar Bear? DEBATE 4.5 Is Valuing Human Life Immoral?

Summary: Nonmarket Valuation Today Discussion Questions Self-Test Exercises Further Reading

5 Dynamic Efficiency and Sustainable Development

Introduction A Two-Period Model Defining Intertemporal Fairness Are Efficient Allocations Fair?

EXAMPLE 5.1 The Alaska Permanent Fund

Applying the Sustainability Criterion

EXAMPLE 5.2 Nauru: Weak Sustainability in the Extreme

Implications for Environmental Policy Summary Discussion Question Self-Test Exercises Further Reading Appendix: The Simple Mathematics of Dynamic Efficiency

6 Depletable Resource Allocation: The Role of Longer Time Horizons, Substitutes, and Extraction Cost

Introduction A Resource Taxonomy Efficient Intertemporal Allocations

The Two-Period Model Revisited The N-Period Constant-Cost Case Transition to a Renewable Substitute Increasing Marginal Extraction Cost Exploration and Technological Progress

Market Allocations of Depletable Resources

Appropriate Property Rights Structures EXAMPLE 6.1 Historical Example of Technological Progress in the Iron Ore Industry Environmental Costs EXAMPLE 6.2 The Green Paradox

Summary Discussion Question Self-Test Exercises Further Reading Appendix: Extensions of the Constant Extraction Cost Depletable Resource Model: Longer Time Horizons and the Role of an Abundant Substitute

7 Energy: The Transition from Depletable to Renewable Resources

Introduction

EXAMPLE 7.1 Hubbert’s Peak

Natural Gas: From Price Controls to Fracking

The Role of Price Controls in the History of Natural Gas Fracking DEBATE 7.1 Does the Advent of Fracking Increase Net Benefits?

Oil: The Cartel Problem

Price Elasticity of Demand Income Elasticity of Demand Non-Member Suppliers Compatibility of Member Interests

Fossil Fuels: National Security Considerations

DEBATE 7.2 How Should Countries Deal with the Vulnerability of Imported Oil? EXAMPLE 7.2 Strategic Petroleum Reserve EXAMPLE 7.3 Fuel from Shale: The Bakken Formation

Electricity: Coal and Nuclear Energy

Coal Uranium

Electricity: Transitioning to Renewables

DEBATE 7.3 Dueling Externalities: Should the United States Promote Wind Power? EXAMPLE 7.4 The Relative Cost-Effectiveness of Renewable Energy Policies in the United States Energy Efficiency EXAMPLE 7.5 Energy Efficiency in Rental Housing Markets

Summary Discussion Questions Self-Test Exercises Further Reading

8 Recyclable Resources: Minerals, Paper, Bottles, and E-Waste

Introduction Minerals An Efficient Allocation of Recyclable Resources

Extraction and Disposal Cost Recycling: A Closer Look Recycling and Ore Depletion EXAMPLE 8.1 Lead Recycling

Factors Mitigating Resource Scarcity

Exploration and Discovery Technological Progress Substitution EXAMPLE 8.2 The Bet

Market Imperfections

Disposal Cost and Efficiency The Disposal Decision Disposal Costs and the Scrap Market Subsidies on Raw Materials Corrective Public Policies EXAMPLE 8.3 An Early Example: Pricing Trash in Marietta, Georgia EXAMPLE 8.4 Does Packaging Curbside Recyling with Incentives Promote Efficiency? DEBATE 8.1 “Bottle Bills”: Economic Incentives at Work? EXAMPLE 8.5 Implementing the “Take-Back” Principle

Markets for Recycled Materials E-Waste Pollution Damage Summary Discussion Questions Self-Test Exercises Further Reading

9 Water: A Confluence of Renewable and Depletable Resources

Introduction The Potential for Water Scarcity The Efficient Allocation of Scarce Water

Surface Water Groundwater

The Current Allocation System

Riparian and Prior Appropriation Doctrines Sources of Inefficiency DEBATE 9.1 What Is the Value of Water?

Potential Remedies

Water Transfers, Water Markets, and Water Banks EXAMPLE 9.1 Using Economic Principles to Conserve Water in California EXAMPLE 9.2 Water Transfers in Colorado: What Makes a Market for Water Work? EXAMPLE 9.3 Water Market Assessment: Australia, Chile, South Africa, and the United States Instream Flow Protection Water Prices EXAMPLE 9.4 Reserving Instream Rights for Endangered Species EXAMPLE 9.5 Water Pricing in Canada Desalination EXAMPLE 9.6 Moving Rivers or Desalting the Sea? Costly Remedies for Water Shortages Privatization DEBATE 9.2 Should Water Systems Be Privatized?

GIS and Water Resources Summary Discussion Questions Self-Test Exercises Further Reading

10 A Locationally Fixed, Multipurpose Resource: Land

Introduction The Economics of Land Allocation

Land Use Land-Use Conversion

Sources of Inefficient Use and Conversion

Sprawl and Leapfrogging Incompatible Land Uses Undervaluing Environmental Amenities The Influence of Taxes on Land-Use Conversion DEBATE 10.1 Should Landowners Be Compensated for “Regulatory Takings”? Market Power Special Problems in Developing Countries DEBATE 10.2 What Is a “Public Purpose”?

Innovative Market-Based Policy Remedies

Establishing Property Rights Transferable Development Rights Grazing Rights EXAMPLE 10.1 Controlling Land Development with TDRs Conservation Easements Land Trusts Development Impact Fees Property Tax Adjustments

Summary Discussion Questions Self-Test Exercises Further Reading

11 Storable, Renewable Resources: Forests

Introduction Characterizing Forest Harvesting Decisions

Special Attributes of the Timber Resource The Biological Dimension The Economics of Forest Harvesting Extending the Basic Model

Sources of Inefficiency

Perverse Incentives for the Landowner Perverse Incentives for Nations

Poverty and Debt Sustainable Forestry Public Policy

EXAMPLE 11.1 Producing Sustainable Forestry through Certification Debt–Nature Swaps Extractive Reserves Conservation Easements and Land Trusts EXAMPLE 11.2 Conservation Easements in Action: The Blackfoot Community Project The World Heritage Convention Royalty Payments EXAMPLE 11.3 Does Pharmaceutical Demand Offer Sufficient Protection to Biodiversity? EXAMPLE 11.4 Trust Funds for Habitat Preservation

Summary Discussion Questions Self-Test Exercises Further Reading Appendix: The Harvesting Decision: Forests

12 Common-Pool Resources: Commercially Valuable Fisheries

Introduction Efficient Allocations

The Biological Dimension Static Efficient Sustainable Yield Dynamic Efficient Sustainable Yield

Appropriability and Market Solutions

EXAMPLE 12.1 Harbor Gangs of Maine and Other Informal Arrangements

Public Policy Toward Fisheries

Raising the Real Cost of Fishing Taxes Catch Share Programs EXAMPLE 12.2 The Relative Effectiveness of Transferable Quotas and Traditional Size and Effort Restrictions in the Atlantic Sea Scallop Fishery DEBATE 12.1 ITQs or TURFs? Species, Space, or Both? Aquaculture DEBATE 12.2 Aquaculture: Does Privatization Cause More Problems Than It Solves? Subsidies and Buybacks Marine Protected Areas and Marine Reserves The 200-Mile Limit Preventing Poaching DEBATE 12.3 Bluefin Tuna: Is Its High Price Part of the Problem or Part of the Solution?

Summary Discussion Questions Self-Test Exercises Further Reading Appendix: The Harvesting Decision: Fisheries

13 Ecosystem Goods and Services: Nature’s Threatened Bounty

Introduction The State of Ecosystem Services Economic Analysis of Ecosystem Services Demonstrating the Value of Ecosystem Services

The Value of Reefs Damage Assessments: Loss of Ecosystem Services EXAMPLE 13.1 The Value of Coral Reefs in the US Virgin Islands Valuing Supporting Services: Pollination EXAMPLE 13.2 Valuing Pollination Services: Two Illustrations Valuing Supporting Services: Forests and Coastal Ecosystems Challenges and Innovation in Ecosystem Valuation

Institutional Arrangements and Mechanisms for Protecting Nature’s Services

Payments for Environmental Services DEBATE 13.1 Paying for Ecosystem Services or Extortion?: The Case of Yasuni National Park

Tradable Entitlement Systems

Wetlands Banking EXAMPLE 13.3 Trading Water for Beehives and Barbed Wire in Bolivia Carbon Sequestration Credits Conflict Resolution in Open-Access Resources via Transferable Entitlements EXAMPLE 13.4 Reducing Emissions from Deforestation and Forest Degradation (REDD): A Twofer? DEBATE 13.2 Tradable Quotas for Whales?

Ecotourism

DEBATE 13.3 Does Ecotourism Provide a Pathway to Sustainability? EXAMPLE 13.5 Local Approaches to Wildlife Protection: Zimbabwe

The Special Problem of Protecting Endangered Species

Conservation Banking EXAMPLE 13.6 Conservation Banking: The Gopher Tortoise Conservation Bank The Agglomeration Bonus Safe Harbor Agreements

Moving Forward Summary Discussion Questions Self-Test Exercises Further Reading

14 Economics of Pollution Control: An Overview

Introduction A Pollutant Taxonomy Defining the Efficient Allocation of Pollution

Stock Pollutants Fund Pollutants

Market Allocation of Pollution Efficient Policy Responses Cost-Effective Policies for Uniformly Mixed Fund Pollutants

Defining a Cost-Effective Allocation Cost-Effective Pollution Control Policies DEBATE 14.1 Should Developing Countries Rely on Market-Based Instruments to Control Pollution?

Cost-Effective Policies for Nonuniformly Mixed Surface Pollutants

The Single-Receptor Case The Many-Receptors Case

Other Policy Dimensions

The Revenue Effect EXAMPLE 14.1 The Swedish Nitrogen Charge EXAMPLE 14.2 RGGI Revenue: The Maine Example Responses to Changes in the Regulatory Environment Price Volatility Instrument Choice under Uncertainty Product Charges: An Indirect Form of Environmental Taxation

Summary Discussion Question Self-Test Exercises Further Reading Appendix: The Simple Mathematics of Cost-Effective Pollution Control

15 Stationary-Source Local and Regional Air Pollution

Introduction Conventional Pollutants

The Command-and-Control Policy Framework The Efficiency of the Command-and-Control Approach DEBATE 15.1 Does Sound Policy Require Targeting New Sources via the New Source Review? DEBATE 15.2 The Particulate and Smog Ambient Standards Controversy Cost-Effectiveness of the Command-and-Control Approach EXAMPLE 15.1 Controlling SO2 Emissions by Command-and-Control in Germany Air Quality

Market-Based Approaches

Smog Trading (RECLAIM) Emissions Charges

Regional Pollutants

EXAMPLE 15.2 The Economics of Adirondack Acidification Control Crafting a Policy EXAMPLE 15.3 The Sulfur Allowance Program after 20 Years EXAMPLE 15.4 Technology Diffusion in the Chlorine-Manufacturing Sector

Summary Discussion Questions Self-Test Exercises Further Reading

16 Climate Change

Introduction The Science of Climate Change Negotiations over Climate Change Policy

Characterizing the Broad Strategies DEBATE 16.1 Should Carbon Sequestration in the Terrestrial Biosphere Be Credited? Game Theory as a Window on Climate Negotiations

The Precedent: Reducing Ozone-Depleting Gases Economics and the Mitigation Policy Choice

Providing Context: A Brief Look at Three Illustrative Carbon Pricing Programs Carbon Markets and Taxes: How Have These Approaches Worked in Practice? Two Carbon Pricing Program Design Issues: Offsets and Price Volatility

Controversy: The Morality of Emissions Trading

DEBATE 16.2 Is Global Greenhouse Gas Trading Immoral?

Policy Timing Summary Discussion Question Self-Test Exercises Further Reading

17 Mobile-Source Air Pollution

Introduction Subsidies and Externalities

Implicit Subsidies Externalities Consequences

Policy toward Mobile Sources

History The US Approach Lead Phaseout Program EXAMPLE 17.1 Getting the Lead Out: The Lead Phaseout Program CAFE Standards DEBATE 17.1 CAFE Standards or Fuel Taxes? Fuel Economy Standards in Other Countries External Benefits of Fuel Economy Standards EXAMPLE 17.2 Car-Sharing: Better Use of Automotive Capital? Alternative Fuels and Vehicles Road Pricing EXAMPLE 17.3 Zonal Mobile-Source Pollution-Control Strategies: Singapore Parking Cash-Outs Pricing Public Transport Feebates Tax Credits for Electric Vehicles Pay-as-You-Drive (PAYD) Insurance Accelerated Retirement Strategies EXAMPLE 17.4 Modifying Car Insurance as an Environmental Strategy EXAMPLE 17.5 The Cash-for-Clunkers Program: Did It Work? EXAMPLE 17.6 Counterproductive Policy Design

Summary Discussion Questions Self-Test Exercises Further Reading

18 Water Pollution

Introduction Nature of Water Pollution Problems

Types of Waste-Receiving Water Sources of Contamination Types of Pollutants DEBATE 18.1 Toxics in Fish Tissue: Do Fish Consumption Advisories Change Behavior?

Traditional Water Pollution Control Policy

Early Legislation Subsequent Legislation The TMDL Program The Safe Drinking Water Act Ocean Pollution

Efficiency and Cost-Effectiveness

Ambient Standards and the Zero-Discharge Goal National Effluent Standards Watershed-Based Trading EXAMPLE 18.1 Effluent Trading for Nitrogen in Long Island Sound Municipal Wastewater Treatment Subsidies Pretreatment Standards Nonpoint Source Pollution Atmospheric Deposition of Pollution The European Experience Developing Country Experience EXAMPLE 18.2 The Irish Bag Levy EXAMPLE 18.3 Economic Incentives for Water Pollution Control: The Case of Colombia Oil Spills from Tankers An Overall Assessment

Summary Discussion Questions Self-Test Exercises Further Reading

19 Toxic Substances and Environmental Justice

Introduction

Nature of Toxic Substance Pollution Health Effects Policy Issues EXAMPLE 19.1 The Arduous Path to Managing Risk: Bisphenol A

Market Allocations and Toxic Substances

Occupational Hazards EXAMPLE 19.2 Susceptible Populations in the Hazardous Workplace Product Safety Third Parties

The Incidence of Hazardous Waste Siting Decisions

History Environmental Justice Research and the Emerging Role of GIS EXAMPLE 19.3 Do New Polluting Facilities Affect Housing Values and Incomes? Evidence in New England The Economics of Site Location EXAMPLE 19.4 Which Came First—The Toxic Facility or the Minority Neighborhood? The Policy Response DEBATE 19.1 Does Offering Compensation for Accepting an Environmental Risk Always Increase the Willingness to Accept the Risk? Creating Incentives through Common Law Statutory Law The Toxic Release Inventory Proposition 65 International Agreements EXAMPLE 19.5 Regulating through Mandatory Disclosure: The Case of Lead

Summary Discussion Questions Self-Test Exercises Further Reading

20 The Quest for Sustainable Development

Introduction Sustainability of Development

Market Allocations Efficiency and Sustainability Trade and the Environment EXAMPLE 20.1 Has NAFTA Improved the Environment in Mexico? Trade Rules under GATT and the WTO DEBATE 20.1 Should an Importing Country Be Able to Use Trade Restrictions to Influence Harmful Fishing Practices in an Exporting Nation? The Natural Resource Curse

The Growth–Development Relationship

EXAMPLE 20.2 The “Natural Resource Curse” Hypothesis Conventional Measures Alternative Measures EXAMPLE 20.3 Happiness Economics: Does Money Buy Happiness?

Summary Discussion Questions Self-Test Exercises Further Reading

21 Visions of the Future Revisited

Introduction Addressing the Issues

Conceptualizing the Problem Institutional Responses EXAMPLE 21.1 Private Incentives for Sustainable Development: Can Adopting Sustainable Practices Be Profitable? Sustainable Development EXAMPLE 21.2 Public–Private Partnerships: The Kalundborg Experience

A Concluding Comment Discussion Questions Further Reading

Answers to Self-Test Exercises Glossary Name Index Subject Index

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