Environmental and Resource Economics

Making decisions about how best to conserve natural resources and environmental quality is not a simple task, particularly since many environmental problems are not easy to mitigate and the solutions may be expensive and could pose other risks. Science informs decision-making by providing information about natural processes, but there are often competing interests, values, and risks that must also be taken into consideration. In any case, policymakers are often pressed to make decisions in which there are areas of scientific uncertainty, and in which tradeoffs must be considered.

Environmental economics is a subset of economics concerned with the efficient utilization of resources. Because the environment provides both direct value and the raw material intended for economic activity, the environment and the economy are interdependent. For that reason, the way the economy is managed can have an impact on the environment that, in turn, may affect both welfare and the performance of the economy.

Environmental economics takes into consideration issues such as the conservation and valuation of natural resources, pollution control, waste management and recycling, and the efficient creation of emission standards. Economics is an important tool for making decisions about the use, conservation, and protection of natural resources because it provides information about choices people make, the costs and benefits of various proposed measures, and the likely outcome of environmental and other policies. Since resources whether human, natural, or monetary are not infinite, these public policies are most effective when they achieve the maximum possible benefit in the most efficient way. Therefore, one job of policymakers is to understand how resources can be utilized most efficiently in order to accomplish the desired goals by weighing the costs of various alternatives to their potential benefits.

In competitive markets, information exists about how much consumers value a particular good because we know how much they are willing to pay. When natural resources are involved in the production of that particular good, there may be other factors as scarcity issues, the generation of pollution that are not included in its production cost. In these instances, scarcity issues or pollution become externalities, costs that are external to the market price of the product. If these full costs were included, the cost of the good may be higher than the value placed on it by the consumer.

There are three general schools of thought associated with reducing or eliminating environmental externalities. Most welfare economists believe that the existence of externalities is sufficient justification for government intervention, typically involving taxes and often referred to as Pigovian taxes. Market economists tend to advocate the use of incentives to reduce environmental externalities, rather than command-and-control approaches, because incentives allow flexibility in responding to problems rather than forcing a singular approach on all individuals. Free-market economists focus on eliminating obstacles that prevent the market from functioning freely, which they believe would lead to an optimal level of environmental protection and resource use. The key objective of environmental economics is to identify those particular tools or policy alternatives that will move the market toward the most efficient allocation of natural resources.

Waste Management

In past centuries, waste disposal was up to the individual or the local departments of health and sanitation. There was little or no distinction made in the type of waste, nor was consideration taken regarding potential health, safety, or aesthetic consequences. At this time, disposal was mainly through incineration, landfilling, or disposing into rivers and streams. It was assumed, for example, that the water sources would dissipate the waste and render it harmless. However, growing urban populations and increasing manufacturing and industrial processes made managing waste a significant endeavor. The issue was brought to national attention when the severely polluted Cuyahoga River in Cleveland, Ohio caught fire in 1969. Since that time, waste management within the United States has changed considerably.

Although waste management in the United States is decentralized and diverse, many of the Federal waste laws over the past 30 years establish minimum standards which are often incorporated into state and local laws or regulations. And, while states have the right to create more stringent standards, they cannot lessen the requirements. Federal waste laws are usually enforced by state and local governments with close federal oversight, primarily by the Environmental Protection Agency.

The goals of waste management are to minimize waste quantity, reduce the amount of raw materials consumed, dispose of non-hazardous waste cost-effectively, and dispose of hazardous waste with minimal risk to human health and the environment. Communities use a variety of methods to manage wastes depending on the type of waste involved. Methods used include landfilling, incineration, and composting, with both upstream and downstream separation of usable materials for recycling. There is also an increasing interest and awareness in the reuse of materials, as well as in source reduction through product redesign and efficient packaging. Together these are often referred to as the 3Rs reduce, reuse, and recycle.

A new and growing segment of our waste stream is termed e-waste. Although not clearly defined, e-waste applies to much of the electronic equipment used by businesses and individual consumers that are nearing the end of their usefulness. This includes, but is not limited to, computers, fax machines, copiers, and televisions. A factor that complicates disposal of these items is that certain components contain hazardous materials. The cathode ray tubes in computer monitors and televisions are an example. As such, many old electronics sit idle due to the uncertainty of how to manage them.

Yet, many of these products can be reused, refurbished, or recycled. There are a number of options to reuse equipment that can still function from selling it to someone who can use it or giving it as a charitable donation. Many non-working items can be refurbished in order to recover them into working condition. Finally, any components that cannot be repaired can often be recycled. Although there no federal regulation for e-waste, some states have taken various approaches toward its management. Many states, including Massachusetts, Florida, and New York, have streamlined their regulations to increase the level of recycling. On the other hand, in 1993 California passed the Electronic Waste Recycling Act; yet, they also regulate cathode ray tubes as hazardous waste, banning them from regular trash disposal.

Date: 2016-04-22; view: 1210