1. How are economic models applied to environmental systems? 2. How has the trag

Question

1. How are economic models applied to environmental systems?
2. How has the tragedy of the commons resulted in overfishing? 3. How can the concept of sustainable yield help prevent a collapse of the population growth of fish? 4. How can a substance that is considered a low hazard present a substantial risk? How can a substance that is considered a low risk result in a major hazard?
5. What is a negative externality? 6. How do environmental economics allow us to determine the additional “costs” of a product to society (eg. a plastic bag) that may not be considered in the marginal cost curve (eg. the supply curve)?
7. When do “commons tragedies” occur? 8. How do we avoid commons tragedies?

9. What is a positive externality? 10. How do environmental economics allow us to determine the additional “benefits” of a product to society that may not be considered in the marginal cost curve (eg. the supply curve)?


1. How are economic models applied to environmental systems?
2. How has the tragedy of the commons resulted in overfishing? 3. How can the concept of sustainable yield help prevent a collapse of the population growth of fish? 4. How can a substance that is considered a low hazard present a substantial risk? How can a substance that is considered a low risk result in a major hazard?
5. What is a negative externality? 6. How do environmental economics allow us to determine the additional “costs” of a product to society (eg. a plastic bag) that may not be considered in the marginal cost curve (eg. the supply curve)?
7. When do “commons tragedies” occur? 8. How do we avoid commons tragedies?

9. What is a positive externality? 10. How do environmental economics allow us to determine the additional “benefits” of a product to society that may not be considered in the marginal cost curve (eg. the supply curve)?


1. How are economic models applied to environmental systems?
2. How has the tragedy of the commons resulted in overfishing? 3. How can the concept of sustainable yield help prevent a collapse of the population growth of fish? 4. How can a substance that is considered a low hazard present a substantial risk? How can a substance that is considered a low risk result in a major hazard?
5. What is a negative externality? 6. How do environmental economics allow us to determine the additional “costs” of a product to society (eg. a plastic bag) that may not be considered in the marginal cost curve (eg. the supply curve)?
7. When do “commons tragedies” occur? 8. How do we avoid commons tragedies?

9. What is a positive externality? 10. How do environmental economics allow us to determine the additional “benefits” of a product to society that may not be considered in the marginal cost curve (eg. the supply curve)?

Explanation / Answer

1. Environmental problems result from the use of natural resources for socitial and economic production and consumption. In a way these problems are a result of imbalance between the demand for goods and their supply by the nature. This is the economic view point of an environmental problem. For example an oil well is drilled and run due to pure economic interests - the demand for energy/oil and its profitfull supply. But polluted waterbodies and destroyed soils are its environmental impacts.

So the basic concept of an economy based environmental model is that all economic activity needs its goods/raw materials and energy which are obtained directly or indirectly from the environment. But that is not all, all economic activities returns materials or energy back to the environment as waste products.

So, this implies that the conventional view of economy based on the flow of capital and market must be altered to involve the material - energy balance of the environmental viewpoint. So there must be some constraints imposed on the markets inoredr to avoid the unpredictable consequences from nature if the economy/markets goes unchecked.

Mathematically we can create models to define the limits that must be imposed on human activities. Such models differes from case to case. It's an area where active research is very much underway.

2. 'tragedy of commons' is when everyone that has an access to a shared value is interested in over exploiting it and no one is interested to maintain it. This term is from the 1600's. The Boston Common, which is a public park in the downtown Boston toay was a large grazing pasture for cows back then. And it was a public place. So every family wanted their cows to eat maximum grass from the commons as possible. But the commons had only a finite emount of grass. As larger and larger number of cows began to graze, they were eating the grass at a faster pace than the grass could regrow. Unevitably the commons ran out of grass leaving the families no where to graze there cows.

So this process of over exploiting can eventually reduse the availability of any natural resources. Over fishing is of-course another example. Our rivers, lakes and oceans are common/public places. So anyone can catch fishes from these places. But again the supply of fish is limited. So if everyone goes to catch as many fish as he can, then eventually the fish supply will be depleted. This depletion is the 'tragedy'. If there is no more fish, no one will be able to fish any more.

3. So if everyone shows some restraint and doesn't catch too many fish, then the remaining fish could reproduce and the supply of fish will never be depleted. So fishing will be sustainable, ie. it can go on indefinitely. A sustainable yield is one that can be maintained indefiniely because of the regenerating capacity of natural systems. If we take more than the sustainable yield, the system will collapse and eventually there will be no more yield.

4. hazard is the potential to cause harm.

Risk is the liklihood of harm.

So risk varies according to circumstances.

For example, Potassium Dichromate is a highly toxic chemical. Therefore it is a highly hazardous substance. But the same substance is used to analyse alcohol content from exhaled breath. Though it does not present any risk to the individual since it is sealed inside a tube and will never get airborne.

Flour - is not toxic. It is a non hazardous substance. But if someone is exposed to large amount of flour dest for a prolonged period of time, he could develop inflammation of the skin, conjunctivitis, rhinitis, asthma, etc. Thus this low hazard material can present substantial risk under suitable circumstances.

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