Ch02.ppt

Environmental EconomicsECON 260Ch. 02Linkages between the Economy and the Environment: A Taxonomy

IntroductionThe interaction between nature (natural resources) and economy (economic activities) can be divided into two areas of study.

The first area of study, referred to as natural resource economics, examines the role of the nature in providing resources ( raw materials, energy, and so on) for economic activities. The second area of study, referred to as environmental economics, examines the impact of economic activity on the quality of natural environment.

You will find basic description of natural resource economics in the first few pages of the chapter. Read it once on your own.

We will now study a circular flow diagram to link nature and economy. It focuses on management of waste products or residuals from our economic activities.

Fig 2-1: A Circular Flow Relationship for the Environment and the Economy

The Fundamental BalanceOur understanding of mass and matter tells us that materials and energy (M) extracted from the natural environment must be equal to the residuals from production and consumption ( and ), which are discharged back into the environment. That is,

When we consider what producers use for production and what they produce, we expect ( by a similar reasoning)

These equations are useful in understanding how we might be able to reduce our use of natural environment. To be precise, we can do so by reducing consumption (G), reducing residuals from production ( ) and increasing recycling ( ) . ,, ,

TerminologyHere are some common terms used throughout the textbook.Ambient quality: Ambient refers to the surrounding environment, so ambient quality refers to the quantity of pollutants in the environment; for example, the concentration of SO2 in the air over a city or the concentration of a particular chemical in the waters of a lake.

Environmental quality: A term used to refer broadly to the state of natural environment. This includes the notion of ambient quality, and also such things as the visual and aesthetic quality of the environment.

Residuals: Materials left over after production or consumption. A plant takes in a variety of raw materials and coverts these into some product: materials and energy left after the product has been produced are production residuals. Consumption residuals are what is left over after consumers have finished using the productions that contained or otherwise used these materials.

Emissions: The portion of production or consumption residuals that are placed in the environment, sometimes directly, sometimes after treatment.

TerminologyRecycling: The process of returning some or all of the production or consumption residuals to be used again in production or consumption.

Pollutant: A substance, energy form, or action that, when introduced into the natural environment, results in a lowering of the ambient quality level. We want to think of pollutants as including not only the traditional things, like oil spilled into oceans or chemical placed in the air, but also activities, like certain building developments, that result in visual pollution.

Effluent: Sometimes the term effluent is used to describe water pollutants, and emissions to refer to air pollutants, but in this book these two words will be used interchangeably.

Pollution: Pollution is actually a tricky word to define. Some people might say that pollution results when any amount, no matter how small, of a residual has been introduced into the environment. Others hold that pollution is something that happens only when the ambient quality of the environment has been degraded enough or its absorptive capacity exceeded enough to cause some damage.

TerminologyDamages: The negative impacts produced by environmental pollution on people in the form of health effects, visual degradation, and so on, and on the elements of the ecosystem through things like the disruption of ecological linkages or species extinctions.

Environmental medium: Broad dimensions of the natural world that collectively constitute the environment, usually classified as land, water, and air.

Source: The location at which emissions occur, such as a factory, an automobile, or a leaking landfill.

Types of PollutantsHere are some of the broad ways to categorize emissions. Effectiveness of an environment policy or programs may depend strongly on types of emissions.

Accumulative vs. Non-accumulative Pollutants: Accumulative pollutant builds up in the environment over time because it does not degrade or only does so very slowly. Examples include radioactive wastes, plastics, and metals such as arsenic and mercury.Non-accumulative pollutant can be assimilated or buffered by the natural environment and hence does not build up over time. An example is noise.

It should be noted however that many types of wastes between these two ends of the spectrum. For example, organic matters emitted into water bodies. If carbon dioxide emissions get too high over time, it can become accumulative pollutant from non-accumulative one because the emission will exceed assimilation rate. Determining environmental damages of an accumulative pollutant and costs of reducing it is more complicated than that for a non-accumulative one. This is because the level of accumulative pollutant depends on present as well as past emissions.

Types of PollutantsLocal vs. Regional and Global Pollutants:Local pollutants are those pollutants whose emissions have an impact only in restricted localized regions. Noise pollution and the degradation of the visual environment are local in their impacts. Only the group of people near the emission source are affected.

Regional and Global Pollutants are those pollutants whose impacts are widespread, affecting people and environment over a large region or globally. Acid rain is a regional problem. The ozone-depleting effects of chlorofluorocarbon emissions from various countries work through chemical changes in the earths stratosphere, which means that the impacts are truly global.

Other things equal, local environmental problems ought to be easier to deal with than regional or national problems.

Types of PollutantsPoint Source vs. Nonpoint Source Pollutants:Pollutant with an easily identifiable point of discharge or emission is called point source pollutant. The points at which sulphur dioxide emissions leave a large power plant are easy to identify; they come out the tops of smokestacks associated with each plant. Municipal waste treatment plants normally have a single outfall from which all the wastewater is discharged.

Nonpoint source pollutants are those for which there are no well-defined points of discharge or emissions. Agricultural chemicals, for example, usually run off the land in a dispersed or diffused pattern, and even though they may pollute specific streams or underground aquifers, there is no single pipe or stack from which these chemicals are emitted.

Generally, point source pollutants are easier to monitor and control than nonpoint source pollutants.

Types of PollutantsContinuous vs. Episodic EmissionsEmissions discharged in a predictable and regular manner is described as continuous emissions. Emissions from coal-fired electric power plants or municipal waste treatment plants are more or less continuous.

Emissions that are unpredictable in frequencies and levels are called episodic emissions. Accidental oil or chemical spills are examples of episodic emissions.

Major Pollutants

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