ENVI 149 Study Guide - Midterm Guide: Intergenerational Equity, Profit Motive, Human Capital
29 Mar 2017
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Document Summary
Thesis: the economic approach is ethically acceptable and appropriate in dealing with nearly all environmental problems. Necessary assumptions (there are 6: environment is a scarce resource, rational agent people are rational, goods are substitutable, there is a base unit for exchange ($, unlimited wants, goal: maximal satisfaction of wants. Pareto optimality (and the problem with pareto optimality) A state in which no gains can be made without someone taking a loss. Ranking is inherently ethical, economics is silent on this. Aggregate gains > aggregate burdens: the potential compensation criterion. Gainers can compensate losers such that everyone wins. This draws on the substitutability of goods: what are the practical implications of the potential. Private property is the best way to manage resources. Critiques of the economic approach to the environment. Reduction of environmental value to what fits" in the economic system. Economics is silent on matters of distributive justice.
