EC238 Chapter Notes - Chapter 2: Municipal Solid Waste, Demand Curve, Natural Resource
Chapter 2 – Natural Capital, Linkages between the Economy and the Environment, and Pollution
Natural capital – stock of natural and environmental resources that sustain our ecosystems, economy,
and wellbeing of our residents
• 1.) Natural resource capital – stocks of renewable and nonrenewable resources (minerals,
energy, forests, water, fisheries)
• 2.) Ecosystem or environmental capital – system that provide essential environmental goods
and services such as our atmosphere and waste assimilation provided by forest, grass and
wetlands
• 3.) Land
Using natural capital to produce goods and services has three effect:
• 1.) depleting resources
• 2.) residual or waste is created by the products
• 3.) these waste products may further degrade the quality and quantity of the remaining natural
capital stock
Environmental economics focuses on measures to reduce the flow of residual and their impact on
society and the natural environment
Three ways of reducing the use of natural capital inputs:
• 1.) reduce the quantity of goods and services produced
• 2.) reduce the residuals created from production
o Residuals intensity of production - Invent and adopt new production technologies and
practices that produce smaller amounts of residuals per unit of output produced
o Composition of output – shift from high residual items to low residual items
• 3.) Increase recycling
Types of Pollutants
• Accumulative vs. Non-accumulative Pollutants
o Non-accumulative pollutants – noise, one turned off it is gone so it doesn’t uild up
o Accumulative – things that stay in the environment in nearly the same amount as they
are emitted, does not start at 0 as Y axis as there will always be some damage already
• Local vs. Regional and Global Pollutants
o Local – noise pollution and degradation of the visual environment
o Region and global – acid rain is a regional problem, emissions in one region of the U.S
affects people in Canada and other regions, ozone-depleting effect affects people
globally
• Point Source vs. Nonpoint Source Pollutants
o Nonpoint source – agricultural chemicals run off the land in diffused pattern, to
different streams and underground aquifers, there is no single pipe or stack from which
these chemicals are emitted
o Point source – municipal waste treatment plants normally have a single outfall from
which all the wastewater is discharged
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