Chapter 7

To limit the rise in global temperature Depends on their being a substantive link between CO2 emissions and temperature rise

Tax on emitters Legal emission limit

Offset costs to industries Offset energy prices for middle income Americans Invest in renewable energy, low-carbon transportation, low-carbon economy

Impacts on the environment as a result of economic activity Regulation of the economy and economic processes Balancing environmental and economic goals Developing economic policy to minimize environmental degradation Finding affordable solutions to environmental problems

Costs borne by the producer and passed on to the user or purchaser Raw materials, processing, transportation, sales

Not normally accounted for in cost-revenue analysis by producers Examples: Air and water pollution, whale watching

Services ecosystem provide to humans and the environment Economists refers to systems that provide these functions as Natural Capital

Land or other resources owned publicly Public access for private usage

Indirect cost An effect not normally accounted for in the cost revenue analysis of producers Not recognized as part of their costs and benefits Costs or benefits that don’t show up in the price tag

Do the benefits outweigh the costs (B-D)/C D= Disbenebits (externalities)

Risk - benefit analysis: the riskiness of an action relative to the possible beneficial outcome Expected monetary value (EMV) = p outcome x $ outcome

Cost to reduce one additional unit of pollutant Cost to produce one additional unit of whatever