436 LECTURE NOTES SU19.pdf - ECON 436 LECTURE NOTES SUMMER...

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1 ECON 436 LECTURE NOTES SUMMER 2019 Introduction Economic View of the Environment The economic view of the environment is essentially anthropocentric, that is, it values the environment for the services that it provides to humans. However, the services are not necessarily materialistic, much less market-based. Instead, they consist of whatever enters individuals’ utility functions, which may include esthetics, preservation of species, etc. Environmental services can be grouped broadly into four types: 1. Life support for humans 2. Amenities 3. Material inputs 4. Disposal of residuals Services 3 and 4 are directly linked because of the law of conservation of mass, which implies that the total mass of residuals disposed of in the environment is equal to the total mass of inputs taken from the environment, as illustrated by the simplified materials balance model in Figure 1.1. Figure 1.1 Materials Balance Model P Production Consumption ECONOMIC SYSTEM ENVIRONMENT/ECOLOGY Final products Residuals Inputs Residuals Recycling Recycling
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