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business
natural resource economics

Questions and Answers of Natural Resource Economics

understand the concepts of site value of land and land rent
explain the key differences between plantation forests and other categories of renewable resource
recognise that plantation forests are renewable resources but natural – particularly primary – forests are perhaps best thought of as non-renewable resources in which development entails
describe recent historical and current trends in forestation and deforestation, and be aware of the uncertainties that relate to some forestry data
understand the various functions provided by forest and other woodland resources
variety of policy instruments that are designed to conserve renewable resource stocks and/or promote socially efficient harvesting
understand the workings, and relative advantages, of
describe conditions which increase the likelihood of severe resource depletion or, in extreme cases, species extinction
explain under what conditions the stock, effort and harvesting outcomes of private fisheries will not be socially efficient
undertake comparative statics analysis and simple dynamic analysis for open-access and private-property models
present value (PV)-maximising fishery
static private-property fishery, and
specify, and solve for its bioeconomic equilibrium outcome, an open-access fishery,
steady-state outcome
distinguish between steady-state outcomes and dynamic adjustment processes that may (or may not)lead to
sustainable yield and the maximum sustainable yield
understand the idea of
interpret the simple logistic growth model, and some of its variants, including models with critical depensation
renewable resource, and the notions of compensation and depensation in growth processes
understand the biological growth function of
investigate in some depth the dynamics of pollution generation and pollution regulation processes, using phase plane analysis
local, or less pervasive, type, such as the accumulation of lead in water systems or contamination of water systems by effluent discharges
framework that is suitable for analysing stock pollution problems of
‘model of waste accumulation and disposal’ – provides
second resource use and depletion model. This model – which we call
follow the development of
use the aggregate stock pollution model to identify how optimal pollution targets can be obtained from generalised versions of the resource depletion models we investigated in Chapters 14 and 15
simple ‘aggregate stock pollution model’. This model is appropriate for dealing with pollution problems where the researcher considers it appropriate to link emissions flows to the processes of
investigate
variant of the optimal growth model framework that we have addressed before at several places in the text
investigate two models of optimal emissions which are suitable for the analysis of persistent (long-lasting) pollutants. Each of these models is
variety of possible measures of scarcity
understand the concept of natural resource scarcity, and be aware of
identify the consequences of taxes and subsidies on resource net prices and resource revenues
compare resource depletion outcomes in competitive and monopolistic markets
carry out simple comparative dynamic analysis in the context of resource depletion models, and thereby determine the consequences of changes in interest rates, known stock size, demand, price of
socially optimal depletion programme, and why this may differ from privately optimal programmes
understand the meaning of
construct and solve simple discrete time and continuous time models of optimal resource depletion
resource choke price
backstop technology and
understand the role of resource substitution possibilities and the ideas of
appreciate the distinctions between alternative measures of resource stock, such as base resource, resource potential and resource reserves
understand the concept of non-renewable resources
appreciate the ways in which resource use patterns are linked with sustainability
class of models known as ‘optimal growth models’
understand how questions relating to efficient and optimal use of environmental resources over time can be analysed using
recognise the relationship between – but also the difference between – the concepts of efficiency and optimality
understand the ideas of ‘efficient’ and‘optimal’ allocations of environmental resources
learn how environmental performance bonds could work
be introduced to the safe minimum standard and the precautionary principle
consider decision making in the face of uncertainty
see how irreversibility affects environmental decision making and learn about quasi-option value
find out how risk affects environmental decision making and have the concepts of option value and option price explained
learn about the difference between risk and uncertainty
be introduced to valuation methods that are based on production function analysis
learn about the Hedonic Price method
find out how the Travel Cost method uses data on actual behaviour to infer use value
find out about the technique of Choice Modelling
learn how Contingent Valuation uses individuals’ responses to hypothetical questions to infer use and non-use values
work through the utility theory on which environmental valuation techniques are based
learn about the categories of economic value assigned to the natural environment, and the distinction between use and non-use values
be introduced to some alternatives to cost–benefit analysis
learn about cost–benefit analysis and its application to the environment
find out how to do project appraisal
revisit the analysis of optimal growth introduced in Chapter 3
learn about the conditions necessary for intertemporal efficiency
major determinant of trade flows?
Does the empirical evidence suggest that differences in the stringency of environmental regulations are
Does adherence to the General Agreement on Tariffs and Trade unduly constrain attempts to tackle environmental problems?
Does banning trade in products made from endangered species necessarily protect those species?
Do countries competitively reduce environmental standards and if so for what purpose?
When does trade liberalisation damage the environment and if so does it matter?
What are the classical theorems of international trade and the implications of extending them to environmental resources?
Is it possible to use such conditions to explain how far efficient cooperation has gone concerning upper-atmosphere ozone depletion and global climate change?
gradual, dynamic process, with agreements often being embodied in treaties or conventions that are general frameworks of agreed principles, but in which subsequent negotiation processes determine the
Why is cooperation typically
What determines the degree to which cooperation takes place between countries and policy is coordinated? Put another way, which conditions favour (or discourage) the likelihood and extent of
What insights does the body of knowledge known as game theory bring to our understanding of international environmental policy?
What additional issues are brought into contention by virtue of an environmental problem being international?
In which ways do international environmental problems differ from purely national (or sub-national) problems?
study the nature of computable general equilibrium (CGE) models and their application to environmental problems
learn how the input–output models, specified in terms of physical or constant-value flows, can be reformulated to analyse the cost and price implications of environmental policies, such as
encounter some examples of environmental input–output models and their application
find out how the basic input–output model can be extended to incorporate economy–environment interactions
learn about the basic input–output model of an economy and its solution
understand the idea of the precautionary principle, and how it might be applied in the case of pollution control policy
explain how, at least in principle, an EPA may elicit private (‘inside’) information about emissions abatement costs from regulated businesses
understand some consequences of asymmetry of information between the EPA, as regulator, and the regulated parties
recognise the conceptual difference between an efficiency loss arising from pursuit of an inefficient target, and an inefficiency loss from not achieving pollution reductions at least cost
appreciate some of the implications of nonlinearity or threshold effects in emissions damage functions for pollution control programmes
analyse how the choice of pollution control instrument might depend on the relative slopes of control cost and damage functions, and so discuss the comparative merits of alternative instruments
appreciate why all types of pollution control instrument will, in general, involve efficiency losses under uncertainty
understand how efficiency losses arise from making decisions under conditions of uncertainty
distinguish between uncertainty about pollution abatement costs and pollution damages
pollutant is uniformly mixing
the significance, in instrument choice, of whether
the comparative merits of alternative instruments
the mechanisms by which pollution instruments operate in attaining targets
pollution target

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