Chapter 15: Natural Resource and Energy Economics

Replacement rate

Birthrates necessary to keep populations from falling over time

Total fertility rate

Average number of children that a woman is expected to have during her lifetime

Demographers

Scientists who study human populations

British thermal unit

Amount of energy required to raise the temperature of 1 pound of water by 1 degree Fahrenheit

Net benefits

The total dollar value of all benefits minus the total dollar value of all costs, so that a project’s net benefit is equal to the dollar value of the gains or losses to be made

Renewable natural resources

Include things like forests and wildlife, which are capable of growing back, or renewing themselves, if they are harvested at moderate rates

Nonrenewable natural resources

Include things like oil, coal, and metals, which either are in actual fixed supply (like the metals found in the earth’s crust) or are renewed so slowly as to be in virtual fixed supply when viewed from a human time perspective (as is the case with fossil fuels like oil and coal, which take millions of years to form out of decaying plants and animals)

Present value

Present-day equivalent of future value of money

User cost

Current extraction and use means lower future extraction and use

Extraction costs

Include all costs associated with running the mine, digging out the coal, and preparing the coal for sale

Conflict diamonds

Diamonds that are mined by combatants in war zones in Africa in order to provide the hard currency that they need to finance their military activities

Fishery

Stock of fish or other marine animal that can be thought of as a logically distinct group

Fishery collapse

When a fishery’s population is sent into a rapid decline because fish are being harvested faster than they can reproduce

Total allowable catch (TAC)

Under this system, biologists determine the TAC for a given fishery, for instance, 100,000 tons per year. Fishers can then fish until a total of 100,000 tons have been brought to shore. At that point, fishing is halted for the year.

Individual transferable quotas (ITQs)

Individual catch size limits that specify that the holder of an ITQ has the right to harvest a given quantity of a particular species during a given time period