Ch. 26Ch. 26Economics, Environment, Economics, Environment,

and Sustainabilityand Sustainability

AP exam fees due March 9AP exam fees due March 9

Chem poster – add 2 picturesChem poster – add 2 pictures

Due Friday Due Friday

Cookie Lab - WednesdayCookie Lab - Wednesday

Assign Monetary Values to Assign Monetary Values to ResourcesResources

Nonmarket values of earth’s Nonmarket values of earth’s ecological servicesecological services

Estimating nonuse values:Estimating nonuse values:– Existence valueExistence value– Aesthetic valueAesthetic value– Bequest/option valueBequest/option value

How to estimate cost?How to estimate cost?

Mitigation cost – how much would it Mitigation cost – how much would it cost to offset an environmental cost to offset an environmental damagedamage

Willingness to pay – survey peopleWillingness to pay – survey people Ex. What would people pay to keep a Ex. What would people pay to keep a

particular species from becoming particular species from becoming extinctextinct

External/Indirect costsExternal/Indirect costs

Vs.Vs.

Internal/Direct costsInternal/Direct costs

Internal/Direct CostsInternal/Direct Costs

$ producing a product$ producing a product– Raw materialsRaw materials– LaborLabor– ShippingShipping– ProfitsProfits– Post purchase – Post purchase –

maintenance,etc.maintenance,etc.

External/Indirect CostsExternal/Indirect Costs

$ not included in market price$ not included in market price– Extracting/processing raw materialsExtracting/processing raw materials

Uses nonrenewable energy/mineral Uses nonrenewable energy/mineral resourcesresources

Produces solid/hazardous wastesProduces solid/hazardous wastesDisturbs landDisturbs landPollutes air/waterPollutes air/waterFuture – climate changeFuture – climate change

Full Cost PricingFull Cost Pricing

Internal and external costsInternal and external costs Benefit – consumers could make Benefit – consumers could make

more informed choicesmore informed choices Over time – reduces eco-friendly Over time – reduces eco-friendly

products pricesproducts prices

Why not used?Why not used?

Harmful/wasteful goods – Harmful/wasteful goods – could cost more could cost more

Difficult putting a price on Difficult putting a price on environmental and health environmental and health costscosts

Phase in – government actionPhase in – government action

Shift to Full Cost PricingShift to Full Cost Pricing

Government subsidies/tax Government subsidies/tax breaksbreaks

Phase out environ. harmful Phase out environ. harmful subsidies & tax breakssubsidies & tax breaks–Fossil fuel/nuclear industries Fossil fuel/nuclear industries rec. hugh subsidiesrec. hugh subsidies

Green Taxes & FeesGreen Taxes & Fees

On pollution & resource On pollution & resource useuse

Shift taxes from wages & Shift taxes from wages & profits profits pollution and pollution and wastewaste–A BALANCEA BALANCE

Environ. Laws & RegsEnviron. Laws & Regs

Innovation-friendly regulatory Innovation-friendly regulatory process emphasizes process emphasizes – Polution preventionPolution prevention– Waste reductionWaste reduction– Requires industry & environ. Requires industry & environ.

Interests to work togetherInterests to work together– Develop realistic standards & Develop realistic standards &

timetablestimetables

Pollution & Resource Use Pollution & Resource Use PermitsPermits

Govern. Govern. (fig. 26-12)(fig. 26-12)

– limit on pollution emissions or limit on pollution emissions or use of a resourceuse of a resource

– give pollution or resource use give pollution or resource use permits to userspermits to users

– allow them to trade their allow them to trade their permits in the marketplace.permits in the marketplace.