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Environmental Economics: Basic Concepts and Debates

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Topic: Environmental Economics

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Content Inside: Discovery Guides 2007 Proquest CSA LLC. Released April 2007 Environmental Economics: Basic Concepts and Debates By Ethan Goffman Economic activity that harms the environment creates present or future losses to humans in the form of damaged health lower productivity depleted natural resources and re- duced enjoyment of nature. Environmental eco- nomics seeks to quantify these losses and de- termine the most efficient way to reduce them as well as to compare the cost of environmental damage to the cost of mitigation. To analyze the costs and benefits of reduced environmental damage economists must compare changes in economic well being today with changes in economic well being in the future. This involves judging the extent to which future generations will have higher income and better methods for mitigating pollution affects. Environmental Economics analyzes how to protect common assets such as air http://www.chattoogariver.org/index.php?re q=commons&quart=Sp2002 Introduction Of the three factors of production in classical economics land labor and capital land may be the most difficult to define. Does it refer to just the land itself? Or is land a generic term referring to all natural resources? Air sunshine and water necessary to make land productive are all part of the surrounding ecosystems. While ownership of land itself can easily be demarcated ownership of mobile associated resources is trickier. The problem is that the way owners use their land may affect others. If they dump garbage on their neighbors land clearly they are infringing upon others rights. But how about if they burn garbage and the resulting smoke blows onto nearby properties? What if they pollute a stream and it ends up affecting everyones water source or flush sewage 1 Goffman: Environmental Economics away and it ends up in an ecol- ogically stressed bay? Although the field of economics tra- ditionally likes to deal with items that can be easily demarcated quantified and t ...