module h: environmental policy

negative externalities

the affected third party was not a party to, or was outside of, the transaction that produced the cost.

socialize

parties externalize or ______ some portion of those costs to others – others who were not involved in the transaction.

inefficient outcome

too much of a certain good will be produced or consumed relative to the overall costs and benefits to society.

deadweight loss

the negative surplus to society of generating too much product at too low costs.

consumption tax

an added cost applied to a good or service thought to be generating a negative externality.

positive externalities

benefits to parties external to the agreement.

subsidies

transfer payments from society (the government) to an institution or individual in return for a behavioral choice.

output standards

either outright bans or limitations on the amount of a given externality (air pollution) that may be produced.

command and control

To implement an output standards mechanism, government bureaus are created and charged with setting the level of the output standard. They are also responsible for inspecting and punishing firms or individuals who exceed their output limitations.

saliency trap 

the logical fallacy of believing that, because a citizen has an opinion on some policy issue, this opinion is a salient or important issue to them relative to other issues.

cross-cutting cleavages

when a citizen shares conflicting or opposing opinions on policy as well as limited information-gathering capabilities, inhibiting their ability to learn about each candidate’s positions on all policies.

satisfice

citizens must make the best choice that they can at any given moment, given the limited information and ability that they possess. Rather than making the optimal choice, citizens make the adequate choice, given their limited information.

policy window

when _________ open, they act as a lens focusing and combining previously existing policy solutions with political forces. This combination typically results in major policy reforms.

stationary sources

fixed emitters of air pollution

emissions

the production or discharge of gas

point sources

single identifiable sources of water pollution

effluent

liquid waste or sewage discharged into a river or the sea

non-point source pollution

diffuse contamination or pollution that does not originate from a single source 

cradle to grave approach

a stringent tracking system that kept detailed records on each specific amount of hazardous material from its generation, to its transportation/use across the United States, and eventually to its disposal.

principal-agent theory

the study of the challenges faced whenever one actor (the principal) delegates authority to another actor (the agent) to carry out some task.

adverse selection

the problem of possibly selecting the wrong agent

screeining and selection

an intensive interview process that is meant to reveal an agent’s true preferences

moral hazard

when incompatible incentives are present. derives from the prospect of the agents not bearing the entire costs of their poor task performance 

ex post control tactics

direct monitoring of agent activity and punishing deviations after the fact

ex ante control tactics

any actions that a principal takes prior to an agent’s action to incentivize a desired behavior.

goal displacement

the process of attaining the goal becomes an end in itself.

technical uncertainty

the uncertainty the agency has in its estimate of the policy consequences of a given choice.

risk

the expected utility or probability associated with a loss.

climate

variations in average weather over long to extremely long periods of time.

climate change

long-term variations in weather patterns.

greenhouse effect

this cycle of increasingly trapped radiation and warming

greenhouse gases

water vapor, carbon dioxide, methane, and ozone

lowest hanging fruit

the easiest and cheapest to pick.

pigouvian tax

a tax be levied on the good or service in the event of a negative externality. If the new tax was set at the level of the externality, the resulting new price of the item would then return efficiency to the market.

procedural uncertainty

the uncertainty about what type of choice the agency is likely to make.

effectiveness

the change in environmental outcomes attributed to some regulatory program.

efficiency

the relative total benefits provided by a given program weighted against the costs of the program.

best management practices

policies, practices, procedures, or structures implemented to mitigate the adverse environmental effects on surface water quality resulting from development.

risk assessment

a multi-step process that begins with the science of what we know about a given substance and attempts to end up with an objective estimate of the likelihood that humans will experience any of a series of negative reactions associated with a substance.

risk management

process that more explicitly allows for the introduction of politics into its decisions. This process seeks to determine a fundamentally political question: Are the risks associated with the substance worth regulating despite the economic costs of doing so?

monetization

the process by which regulators assess what factors are included in the calculation and the economic valuation assigned to each benefit and cost of a issuing a regulation

uncertainty

our inability to know “with certainty” that an outcome will occur.