EC238 Chapter Notes - Chapter 1: Sport Utility Vehicle, Natural Capital, Externality
Document Summary
Environmental economics is the study of environmental problems with the perspective and analytical ideas of economics. Environmental economics draws from both sides, but primarily from microeconomics. Environmental economics focuses on how economic activities affect our natural environment the atmosphere, water, land, and an enormous variety of living species. Environmental economics examines these questions by focusing on was society can reduce its degradation of the natural environment. Economic efficiency remains the central criterion for evaluating outcomes and policies. Economic efficiency is all about using resources wisely. Equity is about how the economic pie" is divided up. Horizontal equity treats similarly situated people the same way. Vertical equity refers to how a policy impinges on people who are in different circumstances, in particular on people who have different income levels. Intergenerational equity looks at whether future generations have the same opportunities as current ones. Environmental degradation comes about from human behaviour that is unethical or immoral.
