PART II: THE ECONOMICS OF POLLUTION

Transcription

1 H 'A' DAVID W.PEARCE

2 CONTENTS Preface and Acknowledgements PART I: ECONOMY AND ENVIRONMENT Chapter 1 The Histórica! Development of Environmental Economics Introduction Early Economic Paradigms and the Environmcnt Post-War Economics and the Ríse of Environmentalism Institutional Economics Paradigm The Market Model of Environmental Management Policy Analysis: Fixed Standard versus Cost-Benefit Framework Economic and Environmental Valúes Sustainable Economic Growth and Development Ecological and Co-evoíutionary Economic Paradigm Conclusions 26 Chapter 2 The Circular Economy Narrow and Holistic Views of Economies and Environments The Environment-Economy Interaction The Circular Economy Existence Theorems 41 Chapter 3 The Sustainable Economy Rules for Sustaining Closed Economies Complementarity and Trade-Offs Maintaining the Natural Capital Stock The Meaning of Constant Capital Stock Existing and Optimal Capital Stocks 53 xi

3 VI CONTENTS PART II: THE ECONOMICS OF POLLUTION Chapter 4 The Óptima] Level of PoIIution PoIIution as Externality Optimal Externality Alternativo Defmitions of PoIIution Types of Externality Who are the Polluters? Conclusions 67 Appendix 4.1 Deriving a Marginal Net Prívate Benefit Curve 69 Chapter 5 The Market Achievement of Optimal PoIIution Property Rights The Potential for Market Bargains in Externality Criticisms of the Coase Theorem 73 Appendix 5.1 Resurrecting the Coase Theorem under Imperfect Competition 78 Appendix 5.2 Non-Convexity and the Market Bargain Theorem 79 Chapter 6 Taxation and Optimal PoIIution Introduction The Optimal Pigovian Tax Illustrating the Optimal Pigovian Tax Mathematically PoIIution Charges and Property Rights PoIIution Charges and Abatement Costs A Formal Proof that MAC = MEC Produces Optimal PoIIution Pigovian Taxes and Imperfect Competition Charges as a Low-Cost Solution to Standard Setting Why are PoIIution Taxes not Widespread? 96 Appendix 6.1 The Emissions-Damage Sequence for an Electricity Power Station 98 Appendix 6.2 The Target of a Pigovian Tax 100 Chapter 7 Environmental Standards, Taxes and Subsidies The Inefficiency of Standard-Setting Taxes versus Standards PoIIution Reduction Subsidies 107

4 CONTENTS Vil Chapter 8 MtrkeUble Pollution Permití Theory of Marketable Permits The Advantages of Marketable Permits Types of Permit Systems Permit Trading in Practice 117 Chapter 9 Measuring Envíronmental Damage I: Total Economic Valué The Meaning of Envíronmental Valuation The Uses of Economic Valué Costs, Benefits, Wíllingness to Pay and Willingness to Accept Total Economic Valué Option Valué Existence Valué Empírica! Measures of Option and Existence Valué 137 Chapter 10 Measuring En virón menta I Damage II: Valuation Methodologies Total Economic Valué and Decision-Making Direct and Indirect Valuation The Hedonic Pnce Approach Contingcnt Valuation Travel Cost Approaches Wiílingness to Pay versus Willingness to Accept 156 Chapter 11 Pollution-Control Policy in Mixed Economies Pollution-Control: Theory versus Practice Direct Regulations: A 'Command and Control' Philosophy Technology-Based Pollution Control Strategies: The USA andtheuk EEC Pollution-Control Policy Integrated Pollution-Control: The UK BPEO Concept Economic Incentive Pollution-Control Instruments 171 Chapter 12 Pollution-Control in Centrally-Planned Economies Soviet Ideology and Environmental Image 177

5 VIH CONTÉ NTS 12.2 Economic Self-Sufficiency and the Transformation of Nature River-Diversion Schemes and the Lake Baikal Controversy Comparative Environmental Effectiveness 185 Chapter 13 Global Pollution Policy Introduction AcidRain Chlorofluorocarbons Carbón Dioxide and the Greenhouse Effect 201 PART III: ETHICS AND FUTURE GENERATIONS 209 Chapter 14 Discounting the Future TheProblem The Rationale for Discounting A Critique of Discounting Problems with the Critique of Discounting An Alternative to Adjusting Discount Rates 224 Chapter 15 Environmental Ethics Environmental Valúes Environmental Ethics and Species Preservation The Search for a New Environmental Ethic 231 PART IV: THE ECONOMICS OF NATURAL RESOURCES 239 Chapter 16 Renewable Resources Introduction Growth Curves The Rate of Exploitation Costs and Revenues Preservation Valué A More Complete Model: Introducing Time Interpreting the Fundamental Rule of Renewable Resource Exploitation Implications of the More Complete Model 259

6 CONTENTS IX Chapter 17 The Extinction of Species The Problem of Extinction Open Access and Species Extinction Profit Maximisation and Extinction Why Does Extinction Occur? 269 Chapter 18 Exhaustible Resources Introduction The Fundamental Principie of Exhaustible Resource Use A Diagrammatic Exposition of Optimal Resource Use Resource Pnces and Backstop Technology The Effects of Changing Parameters Monopoly and the Rate of Extraction Summarising the Optimal Use and Depletion Rules 287 Chapter 19 Me as u ring and Mitigating Natural Resource Scarcity Introduction: Malthusian and Ricardian Scarcity Recognition Empirical Evidence on Resource Pnce Paths A Typology of Scarcity and Price/Cost Scarcity índices Geochemical and Stock Pollution Constraints on Resource Exploitation Resource Scarcity Mitigation: Recyling and Substitution Substitution Processes 306 PART V: DEVELOPMENT AND ENVIRONMENT 309 Chapter 20 Development, Preservaron and Conservation Conservation and Preservation Development and Total Economic Valué Irreversibility and the Krutilla-Fisher Algorithm Sale Mínimum Standards Irreversibility and Sustainability 319 Chapter 21 A Case Study of Wetlands Introduction Social Inefficiency in Wetland Resource Use What Are Wetlands? 322

7 X CONTENTS 21.4 Total Economic Valué of Wetlands Sources of Inefñciency in Wetland Resource Use: Market and Intervention Failure Methodologies for the Measurement of Wetland Use Inefficiency Mechanisms for Social Cost Internalisation 335 Chapter 22 Environment and the Developing Countries TheProblem The Dependence on Natural Resources Resource Interconnections The Economic Cost of Resource Damage Economic Incentives and Natural Resource Management Policy Concluding Note 358 References and Further Reading 361 índex 374