CONTENTS Preface ... xi Foreword / by Richard B. Norgaard ... xvi About the Author ... xvii About the Contributors ... xx PART Ⅰ : ECONOMIC THEORY, CONCEPTS, AND METHODS ... 1 Chapter 1 : Competition, Monopoly, and Social Welfare ... 3 Introduction : Why Study Economics? ... 3 The Theory of Competitive Markets ... 5 Monopoly Pricing and Economic Rent ... 9 Environmental Externalities, Public Goods, and Economic Welfare ... 13 Questions for Discussion and Analysis ... 18 Appendix A : Glossary of Economic Concepts ... 19 Appendix B : Mathematical Illustration ... 21 Notes to Chapter 1 ... 23 Chapter 2 : Measuring Economic Welfare and Environmental Quality ... 25 GDP, GNP, and IPP : Is World Income Increasing? ... 25 Inflation, Real Income, and the Environmental Kuznets Curve ... 27 Environmental Accounting and the Index of Sustainable Welfare ... 31 Questions for Discussion and Analysis ... 35 Notes to Chapter 2 ... 36 References ... 37 Chapter 3 : Valuing the Environment and Benefit-Cost Analysis ... 39 Preface : One Historical Perspective ... 39 Measuring Environmental Benefits : Prospect Theory and Relative Gain ... 40 Contingent Valuation : The Economic Value of Environmental Benefits ... 42 The Travel Cost Method ... 45 Valuing Environmental Qualitys Impact on Real Estate : The Hedonic Approach ... 47 The Value of Life, Health, Risk, and Safety ... 48 Conclusion and Summary ... 52 Questions for Discussion and Analysis ... 54 Notes to Chapter 3 ... 55 Chapter 4 : Benefit-Cost Analysis and Discounting ... 57 Benefit-Cost Analysis : History and Applicability ... 57 Discounting and Interest Rates ... 58 Present Value or Annual Discounting? ... 60 The "Best" Efficient Level of Pollution Control ... 62 Social Versus Private Discounting ... 62 Eternity Discounting；Inflation and Real Interest Rates ... 66 Summary ... 66 Questions for Discussion and Analysis ... 67 Appendix : Discounting and Interest Rate Relationships ... 68 Notes to Chapter 4 ... 68 Chapter 5 : Equity, Environment, and Economics ... 71 What is, or What Ought to Be? ... 71 Economic Philosophy : Pareto and Compensation, Benefit-Cost Analysis, Rawls, and the Polluter Pays Principle ... 71 The Coase Theorem : Who Pays for Safe Water? ... 73 Environmental Justice and Economics ... 78 Summary ... 80 Questions for Discussion and Analysis ... 81 Notes to Chapter 5 ... 82 Chapter 6 : Economic Theory and Environmental Resources : An Introduction ... 85 Renewable Biological Resources : A Question of Sustainability ... 85 Finite Resources : Use and Depletion ... 93 Optimizing the Balance : Environmental Protection and Degradation ... 100 Summary ... 103 Questions for Discussion and Analysis ... 105 Notes to Chapter 6 ... 106 PART Ⅱ : RENEWABLE ENERGY ECONOMICS AND CONSERVATION ... 109 Chapter 7 : Personal and Household Energy : Economics and Environment ... 111 Introduction : Economics Has Promoted Conservation ... 111 Keeping Warm ... 112 Economics and Lighting ... 118 Economic Obstacles to Cost-Effective Conservation ... 120 Air Pollution and Home Heating ... 122 Questions for Discussion and Analysis ... 123 Appendix ... 124 Notes to Chapter 7 ... 125 Chapter 8 : Renewable Energy Economics / by Matthew Schwartz ; Duane Chapman ... 127 Solar Energy ... 128 Residential Solar Electricity ... 130 Developing Countries and Residential Solar Electricity ... 131 Large Solar and Renewable Electric Plants ... 132 Research or Development? Scale Economy, Technological Innovation, and Policy ... 133 Renewable and Alternative Transportation Fuels ... 135 Ethanol ... 136 Natural Gas ... 138 Electricity ... 138 Alternative Transportation Costs ... 138 Annual Fuel Cost ... 139 Total Annual Cost ... 139 Economic Incentives ... 140 Policies and Economics ... 142 Questions for Discussion and Analysis ... 143 Notes to Chapter 8 ... 143 PART Ⅲ : THE QUESTION OF GLOBAL RESOURCE LIMITATIONS ... 147 Chapter 9 : World Oil : A Strategic Limited Resource? ... 149 The Geologists Approach ... 151 The Economists Approach ... 153 Competition, Monopoly, or a Hybrid? ... 155 The Security Dimension, Hybrid Competition, and Came Theory ... 159 Can the Price of Oil Be Predicted? ... 162 In Conclusion : A Summary and a Very Brief Opinion-Editorial ... 164 Questions for Discussion and Analysis ... 164 Notes to Chapter 9 ... 165 Chapter 10 : The Limits to Growth Question : Industrial Resources Depletion, Recycling, and Population ... 169 The "Limits to Growth" Theory ... 170 Scarcity or Abundance : Metals and Energy Fuels ... 173 Recycling and Waste Disposal Economics ... 177 Population, Economics, and Environment ... 182 Summary and Conclusion ... 185 Questions for Discussion and Analysis ... 186 Notes to Chapter 10 ... 186 PART Ⅳ : RENEWABLE ENVIRONMENTAL RESOURCES : AIR AND WATER QUALITY, AGRICULTURE, AND FORESTRY ... 191 Chapter 11 : Air Pollution Control : Economics and Policy ... 193 A Success Story : Reduced Pollution Emissions ... 193 Concentration Levels and Health Standards ... 194 Improvement in Pollution Concentration and Exposure ... 197 Benefits and Costs of the Clean Air Act ... l99 Regulation and Marketable Permits : The Acid Rain Case ... 202 Conclusion ... 207 Questions for Discussion and Analysis ... 208 Appendix A : Complete Solutions to the Power and Copper SO₂ Reduction Problem ... 209 Notes to Chapter 11 ... 210 Chapter 12 : Water Quality Economics ... 213 Water Quality and the Environmental Kuznets Curve ... 213 Human Health ... 214 Ecosystem Protection and Wetlands ... 216 Economic Benefits of Water Quality Improvement in the Wllamette Basin and in National Water Supply ... 219 Water Quality Economics and Developing Countries ... 221 Conclusion ... 223 Questions for Discussion and Analysis ... 223 Notes to Chapter 12 ... 224 Chapter 13 : Agriculture, the Environment, and Economics(by Brent Sohngen and Duane Chapman) ... 227 Introduction ... 227 The Effect of Air Pollution on Agriculture ... 227 Environmental Impacts of Agriculture ... 228 The Hydrologic Cycle, Soil Erosion, and Nitrogen ... 228 Pesticides and Risk Assessment ... 230 Agriculture and the NIMBY Syndrome ... 233 Food Safety : A Risk Assessment of the Benefits and Costs of Meat Inspection ... 235 Reducing Agricultural Pollution : Policy Approaches in an Economic Framework ... 236 The Conservation Reserve Program ... 237 EQIP : A New Program ... 238 The Coase Theorem in Action : The Example of the New York City Water Supply ... 240 Tradable Water Pollution Permits : The Example of the Tar-Pamlico Basin in North Carolina ... 241 Sustainable Agriculture : What Is It? ... 242 Summary ... 243 Questions for Discussion and Analysis ... 244 Notes to Chapter 13 ... 245 Chapter 14 : Forestry Economics ... 247 What Is Sustainable Yield? ... 249 Profit and Forest Management ... 252 The Eastern Forest ... 256 Commercial Forestry and the Environment : Externalities, Air Pollution, and the Spotted Owl ... 258 Questions for Discussion and Analysis ... 261 Notes to Chapter 14 ... 262 PART V : THE GLOBAL ENVIRONMENT ... 265 Chapter 15 : Biodiversity and Endangered Species ... 267 Introduction ... 267 Scientific Background : The importance of Biodiversity ... 267 The Measurement of Biodiversity；the Definition of Endangered Species ... 269 Economic Assessment of Biodiversity and Protected Species ... 273 Spotted Owl Protection : Economic Dimensions ... 276 Emerging Issues and Conclusion ... 281 Questions for Discussion and Analysis ... 284 Appendix A : Biodiversity Survey : On Class Response ... 284 Notes to Chapter 15 ... 285 Chapter 16 : The Kruger National Park in a New South Africa ... 289 Introduction ... 289 The Positive Ledger : Conservation and Ecosystem Protection ... 289 Ecology and Management ... 290 Economic Problems and Opportunities : Hunting, the Poaching Problem the Ivory Ban ... 295 The Land Question, the Apartheid Legacy, and Livestock ... 299 Fees and Community Development ... 301 Contingent Valuation, Conclusion ... 303 Questions for Discussion and Analysis ... 304 Notes to Chapter 16 ... 304 Chapter 17 : Macroeconomics, Trade, and Environment ... 309 Introduction ... 309 Consumer Prices and Environmental Protection Costs ... 309 The Macroeconomic Approach to the Impact of Environmental Costs ... 312 Climate Change Policy and Macroeconomics ... 315 Trade, Pollution, and the Environmental Kuznets Curve : The Issues ... 316 Conclusion and Summary ... 323 Questions for Discussion and Analysis ... 324 Notes to Chapter 17 ... 325 Chapter 18 : Climate Change : Economics and Policy ... 329 Introduction : Economics, Science, and Uncertainty ... 329 The Nordhaus Geoeconomic Analysis ... 332 The Global Division : Income and Energy Use ... 336 Economic Policies ... 339 The Kyoto Protocol ... 340 Conclusion ... 342 Questions for Discussion and Analysis ... 344 Appendix : Understanding Solar Insolation and Climate Change ... 345 Notes to Chapter 18 ... 345 PART Ⅵ : ECOLOGICAL ECONOMICS, SUSTAINABILITY, AND ENVIRONMENT ... 349 Chapter 19 : Ecological Economics : An Emerging Alternative to Environmental Economics / by Jon Erickson ... 351 The Environment and the Economic Tradition ... 351 Environmental Economics : Running on Faith ... 353 The Evolution of Ecological Economics ... 353 Climate Change ... 356 A New Paradigm : Limits, Sustainable Development, Coevolution ... 360 Limits to Growth ... 361 Sustainable Development ... 363 Lessons from Coevoltion ... 365 Concluding Remarks : Choices and Change ... 367 Questions for Discussion and Analysis ... 368 Notes to Chapter 19 ... 368 Chapter 20 : Sustainability, Economy, and Environment / by Richard C. Bishop ; Richard T. Woodward ... 373 Sustainability in a Hardtack World ... 374 SustainabiIity in the Real World ... 379 Global Warming ... 383 Endangered Species ... 388 Sustainability and Economics : Final Thoughts ... 393 Questions for Discussion and Analysis ... 394 Notes to Chapter 20 ... 394 Appendix : An Economic Perspective on the Evolution of Environmental Legislation and Policy / by Andreo Kreiner ... 397 Index ... 403