Climate Economics and Policy Lecture Review

These flashcards cover key concepts from the lecture notes on climate change mechanics, economic principles, policy instruments, and specific regional impacts such as Oregon snowpack and salmon conservation.

What is the difference between weather and climate?

Weather refers to the short-term conditions of its atmosphere, while climate is the long-term pattern or range of weather in a location.

How do human activities strengthen the greenhouse effect?

They add more greenhouse gases to the atmosphere, causing more heat to be trapped and increasing warming.

What are the three major human sources of greenhouse gases?

Fossil fuel burning, deforestation, and agriculture.

What is a positive feedback loop in the context of climate?

A change that reinforces the original change, making it stronger; for example: Warming melts ice $\rightarrow$ less sunlight is reflected $\rightarrow$ more heat is absorbed $\rightarrow$ more warming.

How do mitigation and adaptation differ in addressing climate change?

Mitigation addresses the CAUSE of climate change (reducing emissions), while adaptation addresses the EFFECTS (managing impacts).

What are the definitions of reactive and anticipatory adaptation?

Reactive adaptation occurs after a climate impact happens, while anticipatory adaptation is taken before an expected climate impact occurs.

What three conditions are required for an efficient market?

Perfect competition, perfect information, and complete markets.

Why is $CO_2$ pollution considered a negative externality?

The polluter receives the benefit of the activity while other people bear the climate damages.

What are the four characteristics of well-defined property rights?

Universal, exclusive, transferable, and enforceable.

What is the difference between use value and bequest value?

Use value is the value from directly using something now, while bequest value is the value from preserving something for future generations.

What is a climate tipping point?

A threshold after which a system changes sharply into a different state and may be difficult to reverse.

What is the Social Cost of Carbon (SCC)?

The dollar estimate of economic damage caused by ONE additional ton of greenhouse-gas emissions.

What are the four steps to calculate the Social Cost of Carbon?

1. Predict future emissions; 2. Predict climate changes; 3. Estimate economic damages; 4. Discount future damages into present value.

How does the discount rate affect the weighting of future damages?

A high discount rate gives future damages and benefits LESS weight today, whereas a low discount rate gives them MORE weight today.

What is the difference between prescriptive (normative) and descriptive (positive) discounting?

Prescriptive asks what rate society SHOULD use based on ethics (usually lower), while descriptive asks what rate society actually uses based on market behavior (usually higher).

In carbon pricing, what is the trade-off regarding certainty between a carbon tax and cap-and-trade?

A carbon tax provides price certainty but quantity uncertainty, while cap-and-trade provides quantity certainty but price uncertainty.

What is a 'tax swap' in the context of carbon-pricing revenue?

Using carbon-pricing revenue to reduce another tax, often to achieve the revenue-recycling effect.

Define progressive, proportional, and regressive policies.

Progressive: costs are a larger percentage of income for higher-income households; Proportional: costs are the same percentage across groups; Regressive: costs are a larger percentage for lower-income households.

What are the four major coastal adaptation strategies?

Shoreline stabilization, accommodation, land-use policy, and retreat.

What is the difference between grey and green infrastructure?

Grey infrastructure consists of human-built protective structures like seawalls, while green infrastructure uses nature-based features like wetlands and reefs.

Differentiate between moral hazard and adverse selection in climate insurance.

Moral hazard occurs when behavior changes (taking more risk) because of protection; adverse selection occurs when high-risk people are disproportionately likely to buy insurance.

What is the Green Paradox?

When a climate policy unintentionally encourages behavior that worsens the problem before the policy takes effect (e.g., rushing to build before restrictions start).

What are the three mechanisms of climate gentrification?

Superior investment, cost burden, and resilience investment.

Why is the timing of Oregon snowpack melt critical?

The snowpack acts as natural water storage; if it melts too early, water may not be available when most needed during spring and summer.

What two conditions are especially important for salmon survival?

Cold water and adequate streamflow.