ECON2100 Ch 1. Definitions

Economic Analysis

Uses models to explain strategic decision making and underlying economic conditions

Model

Allows for testing theories and making predictions about changes in market conditions by eliminating unnecessary detail

Circular Flow Model

Shows the real and monetary flows of economic activity through the output and factor markets

Materials Balance Model

Places the circular flow within a larger schematic showing links between economic activity and the environment via resource and residual flows

Residuals

Pollution remaining in the environment after some process has occurred; can be delayed but not prevented through recovery, recycling, and reuse

First Law of Thermodynamics

Matter and energy can neither be created nor destroyed

Second Law of Thermodynamics

Nature's capacity to convert matter and energy is not without bound

Natural Pollutants

Pollutants arising from nonartificial processes in nature (e.g., ocean salt spray, pollen)

Anthropogenic Pollutants

Human-induced pollutants including all residuals associated with consumption and production (e.g., chemical wastes, gases from combustion)

Stationary Source

A fixed-site source of pollution

Mobile Source

Any nonstationary source of pollution

Point Source

A single, identifiable source of pollution

Nonpoint Source

A source that cannot be accurately identified; degrades the environment in a diffuse way

Local Pollution

Damage not far from the source (e.g., urban smog)

Regional Pollution

Damage that extends well beyond the source (e.g., acidic deposition)

Global Pollution

Widespread environmental effects with global implications (e.g., global warming, ozone depletion)

Environmental Quality

Reduction in anthropogenic contamination to socially acceptable levels

Sustainable Development

Management of resources to ensure long-term quality and abundance

Biodiversity

Assuring the variety of distinct species, genetic variability, and variety of inhabitable ecosystems

National Environmental Policy Act (NEPA) of 1969

Directs integration of effort across U.S. agencies/departments/branches; guides federal environmental policy; requires environmental impact review

Environmental Impact Statement (EIS)

A required statement on the environmental impact of proposals or major federal actions

Risk Assessment

Qualitative and quantitative evaluation of the risk posed by an environmental hazard

Risk Management

The decision-making process of choosing from alternative responses to environmental risk

Allocative Efficiency

Requires resources to be appropriated such that additional benefits equal additional costs

Cost-effectiveness

Requires that the least amount of resources be used to achieve an objective

Environmental Justice

Concerned with the fairness of the environmental risk burden across segments of society or geographic region

Command-and-Control Approach

Regulates polluters through the use of rules

Market Approach

Incentive-based policy that encourages conservation or pollution reduction

Polluter-Pays Principle

The polluter pays for the damage caused

Management Strategies

Short-term strategies intended to manage an existing problem (ameliorative intent)

Pollution Prevention (P2)

A long-term strategy aimed at reducing the amount/toxicity of residuals released to nature (preventive intent)