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论文题目:在EC1103 Envoromental eco 文件内的possible essays topics 任选一个老师推荐论文语种:英文您的研究方向:经济是否有数据处理要求:是您的国家:英国您的学校背景:Plagiarism and TurnitinRoyal Holloway 英国一流重点大学要求字数:2000-3000论文用途:本科课程论文 BA Assignment是否需要盲审(博士或硕士生有这个需要):否补充要求和说明:需要reference(参考文献)essay格式只是算分的 需要大概60%以上相关资料在附件里 [email protected](1455780998) /uploads/soft/101119/ec1103.rar

Environmental EconomicsAnthony HeyesBackgroundEconomists have traditionally specified utility functions which suggest that the sole determinant of an individual’s utility is his consumption of material goods (see any of the utility functions written down in a textbook such as Sloman). This is ridiculous – it is obvious that the well-being of a typical individual depends not just upon his consumption of traditionally-defined goods, but also his consumption of‘environmental services’ or, to put it another way, the quality of the natural environment in which he lives.The traditional defence of this approach was that whilst the natural environment was an important determinant of well-being, its characteristics could be taken as more or less exogenous, such that leaving it out of models would not affect much. Over the past two decades it has been realised that this is not legitimate. The production of material goods or services invariably implies changing the environment. Deciding to have more of one usually implies less of the other.Why don’t markets sort out the problem?Q.: Why can’t we just treat ‘environment’ as just any other good (apples or bananas) and just leave people to get on with using it optimally.A.: Because the environment is not like any other good for a variety of reasons. In particular, there are no well-defined property rights – nobody really ‘owns’ clean air – such that in the absence of government intervention polluters aren’t obliged to pay for its use. Like any other valuable good that is, for whatever reason, available for free, people will use too much of it.In this context, then, we observe market failure – markets left to their own devices fail to come up with the ‘correct’ set of relative prices (with the price of every good equal to its marginal social value) – and the usual efficiency properties of markets can no longer be taken for granted. This provides a prima facie case for governments to intervene in ways to bring down the rate at which environmental good and services are consumed.#p#分页标题#e#Environmental economists spend much of their time theorising about and measuring‘externalities’. A negative externality arises when the action of some person A negatively impacts the utility of another person B (for example, playing a loud radio at night might interfere with the sleep of a neighbour). In the absence of altruism, A will have no reason to take account of the impact of his actions upon others and he will tend to do too much of the anti-social activity (‘pollution’) – more than would be mandated by a social planner motivated by the sum of the two peoples utility. Arelated concept is that of the ‘tragedy of the commons’. When lots of people have unrestricted right to access to a resource (some common grazing land, a student common room, an ozone layer) less care is taken of the resource than if it were held as private property. This is because each individual has only a small stake in preserving it for future use.So how should governments intervene?Conceptually, an optimal environmental quality can be determined by social indifference curve analysis. Imagine a social indifference curve on a diagram with‘material good’ along the bottom axis, ‘environmental quality’ up the side. The steepness of the social indifference curve will capture society’s marginal rate of substitution between the two (how it trades off one against the other). Production technologies will imply an environmental cost associated with additional material goods and yield something like a budget line. Assuming the problem has standard characteristics (e.g. assuming society derives diminishing marginal utility from each composite good) we can look for optimality at the point of tangency in the usual way.Having decided ‘how much’ environmental quality we, as a society, want, we arrive at the implementation problem. Different governments use different policy instruments to hit their environmental targets. These include extension of property rights (such as through increased stringency of environmental liability law), quantitative instruments (such as emissions limits – the traditional European approach) and price-based or incentive instruments (such as pollution taxes -popular in the North America). Economists working in the field of environmental regulation spend their time thinking about how increasingly sophisticated instruments can be designed to help society hit its environmental targets in cost-effective ways. Of course, both steps in designing good environmental policy – (a) specifying goals and (b) deciding how those goals should be attained – are much more complicated than this brief discussion has suggested. Particular Problems in Policy Formulation in this Field1) ValuationGovernment economists can infer the value that people attach to privately consumed goods such as apples by observing their market behaviour and invoking ‘revealed preference’.Most environmental goods – clean air, for example – are not bought and sold in a market so economists have to use ‘non-market valuation techniques’. These are often survey-based and, as such, economists are suspicious that the numbers they generate are ‘soft’. The ‘contingent valuation’ (CV) technique, for instance, involves asking people how much they would be willing to pay for a range of hypothetical environmental improvements, and using this to construct a ‘psuedo’- demand curve. CV is very popular in US courts and the multi-billion dollar damages faced by Exxon after the Valdez oil-spill off British Columbia were largely based on CV-based estimates.#p#分页标题#e#2) How to Treat the FutureThe nature of many environmental problems – such as depletion of the ozone layer and consequent global warming – is that much of the damage caused by current behaviour will only be realised in 50 or 100 years time, whereas the cost of prevention is borne now.How should we trade off current against future? Should we discount the future (weigh it less heavily) and, if so, at what rate? If we discount at 10%, then the present value of preventing £1m of damage in 100 years is £26.56. If we don’t discount then that present value is £1m. In the global warming debate, as in many other environmental policy areas, specifying a discount rate is the single most significant input to the cost-benefit calculus. Unsurprisingly,‘greens’ argue for low rates, industry argues for high rates.3) Uncertainty and RiskCompared to other policy areas, environmental policy problems tend to be characterised by high degrees of (a) uncertainty and (b) risk. Some of this is inherent to the planet that we live on, some of it a function of our imperfect understanding of that planet.Most economists assume that ‘rational agents’ as having well-defined preferences and being capable of making correct (individually optimal decisions) – being able to go to the point of tangency on an indifference curve diagram, for example. When an individual is choosing between goods of which (a) he has a lot of experience and which, (b), have certain and un-risky characteristics, this may be a reasonable assumption. There is compelling evidence, though, that people are hopeless at making decisions under risk and uncertainty, and get nowhere near to making correct decisions (think of the ‘Monty Hall’s Doors’ experiment).4) Political ConstraintsAs we noted in 2), many of the beneficiaries are yet to be born. Conventional political systemsonly give weight (through the right to vote) to current generations, and so makes political decision-making myopic. Germany is experimenting with the appointment of an ombudsman who is legally responsible for looking after the interests of future generations (e.g. by taking the government to court if it fails to take adequate account of impacts on future generations in formulating policy) – a bit like many government regulators have the job of looking after the interests of consumers.It is a characteristic of many environmental problems that the solution involves a comparatively small group of individuals (e.g. UK lorry drivers) each incurring a comparatively large cost in order to give a comparatively small benefit to each of a much wider population (e.g. everyone in the UK who breathes air).In this case the former may have the incentive to engage in political activity such as lobbying, whereas the latter, more diffuse group, may not. This can lead to what many call the ‘tyranny of the minority’. The interests of a small number of people willing to shout loud can come out on top of the silent majority, even if efficient policy suggests that the interest of the latter are more valuable.#p#分页标题#e#5) International DimensionsMany of the most pressing environmental problems (global warming, acid rain, loss of global biodiversity) are inherently international in dimension. In the case of CO2 emissions the location of emission doesn’t matter, so its no use the UK closing down a polluting factory only to find that another one opens in another country.Good policy, then, will require international agreements. But global diplomacy is difficult, everyone has an incentive to ‘free ride’. This is particularly true when governments change, as they often do in democracies. In the case of global warming the Kyoto Protocol has taken about a decade for diplomats from over 100 countries to agree in principle. George W. Bush has said that if he is elected he will not ratify it -and the whole exercise will likely fall apart.Possible Essays TopicsIn what sorts of circumstances are green taxes likely to be better than quantitative approaches to pollution control?Is democracy good for the environment?What is the dollar value of a life? Why do we need to know the answer to that question?How successful have international environmental agreements been in protecting the global environment?Should environmental policy in Europe be decided at the EU level, or by individual National governments?Selected Readings (all in library in multiple copies)“Public Policies for Environmental Protection”, Ed. Paul Portney. RFF Press.“Global Environmental Economics”, Ed. M. Dore and T. Mount. Blackwell.“The Economics of Natural Resources” D. Pearce and K. Turner. CUP.“The Greening of World Trade Issues”, K. Andersen, Harvester-Wheatsheaf.


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