ECONOMICS OF THE ENVIRONMENT AND NATURAL RESOURCES THE ECONOMICS OF THE ENVIRONMENT AND NATURAL RESOURCES THE R. QUENTIN GRAFTON WIKTOR ADAMOWICZ, DIANE DUPONT HARRY NELSON, ROBERT J. HILL AND STEVEN RENZETTI © 2004 by R. Quentin Grafton, Wiktor Adamowicz, Diane Dupont, Harry Nelson, Robert J. Hill, and Steven Renzetti 350 Main Street, Malden, MA 02148-5018, USA 108 Cowley Road, Oxford OX4 1JF, UK 550 Swanston Street, Carlton, Victoria 3053, Australia The right of R. Quentin Grafton, Wiktor Adamowicz, Diane Dupont, Harry Nelson, Robert J. Hill, and Steven Renzetti to be identified as the Authors of this Work has been asserted in accordance with the UK Copyright, Designs, and Patents Act 1988. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by the UK Copyright, Designs, and Patents Act 1988, without the prior permission of the publisher. First published 2004 by Blackwell Publishing Ltd Library of Congress Cataloging-in-Publication Data The economics of the environment and natural resources/by R. Quentin Grafton … [et al.]. p. cm. Includes bibliographical references and index. ISBN 0-631-21563-8 (hardcover: alk. paper) – ISBN 0-631-21564-6 (pbk.: alk. paper) 1. Environmental economics. 2. Natural resources. 3. Environmental policy. I. Grafton, R. Quentin, 1962- HC79.E5L42 2004 333.7–dc21 2003007539 A catalogue record for this title is available from the British Library. Set in 10/12 1 / 2 ; Book Antique by Newgen Imaging Systems (P) Ltd, Chennai, India Printed and bound in the United Kingdom By MPG Books, Bodmin, Cornwall For further information on Blackwell Publishing, visit our website: http://www.blackwellpublishing.com This book is dedicated to the special people in our lives who share both our joys and sorrows (and everything in between!): Ariana, Brecon, and Carol-Anne; Sharon, Beth, and Kate; Allie and Nicholas; Alex and Joanne; Miriam. CONTENTS List of Figures ix List of Tables xii List of Boxes xiii Preface xv Acknowledgements xvi Introduction 1 Part I Economics of the Environment 5 1 Models, Systems, and Dynamics 7 2 Property Rights 36 3 Economics of Pollution Control 61 Part II Resource Economics 93 4 Bioeconomics of Fisheries 95 5 Forestry Economics 129 6 Water Economics 161 7 Economics of Non-renewable Resources 193 Part III Environmental Valuation 219 8 Environmental Valuation: Introduction and Theory 221 9 Environmental Valuation: Stated Preference Methods 249 10 Environmental Values Expressed Through Market Behavior 277 Part IV Global Environment 313 11 Growth and the Environment 315 12 Environmental Accounting 344 CONTENTS viii 13 Trade and Environment 368 14 The Global Commons 401 15 Biodiversity 428 16 Sustaining the Environment 456 Glossary 470 Index 491 FIGURES 1.1 The model-building process 10 1.2 Boundaries of a model of the grizzly bear population in Banff National Park 15 1.3 Negative feedback effects in Daisyworld 16 1.4 Examples of positive and negative feedbacks with climate change 17 1.5 Stocks, flows, and feedbacks 18 1.6 Trajectories to a fixed point 19 1.7 Resilience and threshold points 20 1.8 S-shaped growth 22 1.9 Bifurcation to chaos 23 1.10 Logistic growth curve 24 1.11 Exponential growth 25 1.12 Optimal paths in a “cake-eating” problem 32 2.1 Classification of goods by exclusivity and rivalry in use The Environment and Society The Environment and Society Bởi: OpenStaxCollege The subfield of environmental sociology studies how humans interact with their environments This field is closely related to human ecology, which focuses on the relationship between people and their built and natural environment This is an area that is garnering more attention as extreme weather patterns and policy battles over climate change dominate the news A key factor of environmental sociology is the concept of carrying capacity, which refers to the maximum amount of life that can be sustained within a given area While this concept can refer to grazing lands or to rivers, it also can be applied to the earth as a whole Too little land for grazing means starving cattle (Photo courtesy of newbeatphoto/flickr) The Tragedy of the Commons You might have heard the expression “the tragedy of the commons.” In 1968, an article of the same title written by Garrett Hardin describes how a common pasture is ruined by overgrazing But Hardin was not the first to notice the phenomenon Back in the 1800s, Oxford economist William Forster Lloyd looked at the devastated public grazing commons and the unhealthy cattle subject to such limited grazing, and saw, in essence, that the carrying capacity of the commons had been exceeded However, since no one held responsibility for the land (as it was open to all), no one was willing to make sacrifices to improve it Cattle grazers benefitted from adding more cattle to their herd, but they did not have to take on the responsibility of the destroyed lands that were being 1/15 The Environment and Society damaged by overgrazing So there was an incentive for them to add more head of cattle, and no incentive for restraint Satellite photos of Africa taken in the 1970s showed this practice to dramatic effect The images depicted a dark irregular area over 300 miles around When seen from above, there was a large fenced area, where plenty of grass was growing Outside the fence, the ground was bare and devastated The reason was simple: the fenced land was privately owned by informed farmers who carefully rotated their grazing animals and allowed the fields to lie fallow periodically Outside the fence was land used by nomads The nomads, like the herdsmen in 1800s Oxford, increased their heads of cattle without planning for its impact on the greater good The soil eroded, the plants died, then the cattle died, and, ultimately, some of the people died How does this affect those of us who don’t need to graze our cattle? Well, like the cows, we all need food, water, and clean air to survive With the increasing world population and the ever-larger megalopolises with tens of millions of people, the limit of the earth’s carrying capacity is called into question Whether for cattle or humans, when too many take with too little thought to the rest of the population, the result is usually tragedy Pollution Pollution describes when contaminants are introduced into an environment (water, air, land) at levels that are damaging Directly related to carrying capacity, environments can often sustain a limited amount of contaminants without marked change, and water, air, and soil can “heal” themselves to a certain degree However, once contaminant levels reach a certain point, the results can be catastrophic Water Look at your watch Wait 15 seconds Then another 15 In that time, two children have died from lack of access to clean drinking water Access to safe water is one of the most basic human needs, and it is woefully out of reach for millions of people on the planet Many of the major diseases that peripheral countries battle, such as diarrhea, cholera, and typhoid, are caused by contaminated water Often, young children are unable to go to school because they must instead walk several hours a day just to collect potable water for their family The situation is only getting more dire as the global population increases Water is a key resource battleground in the 21st century As every child learns in school, 70 percent of Earth is made of water Despite that figure, there is a finite amount of water usable by humans and it is constantly used and reused in a sustainable water cycle The way that humans use this abundant natural resource, however, renders much of it unsuitable for consumption and unable to sustain life For instance, it takes two and a half liters of water to produce a single liter of Coca-Cola The 2/15 The Environment and Society company and its bottlers use close to 300 billion liters of water a year, often in locales that are short of useable water (Blanchard 2007) As a consequence of population concentrations, water close to human settlements is frequently polluted with untreated or partially treated human waste (sewage), chemicals, radioactivity, and levels of heat sufficient to create large “dead zones” incapable of supporting aquatic life The methods of food production used by many core nations rely on liberal doses of ... United States Solid Waste and Policy, Economics EPA100-R-03-005 Environmental Protection Emergency Response & Innovation October 2003 Agency (5302W) (1807T) www.epa.gov/ innovation/lean.htm Lean Manufacturing and the Environment: Research on Advanced Manufacturing Systems and the Environment and Recommendations for Leveraging Better Environmental Performance ACKNOWLEDGMENTS This report was prepared for the U.S. Environmental Protection Agency's Office of Solid Waste and Emergency Response (OSWER) and Office of Policy, Economics, and Innovation (OPEI). Ross & Associates Environmental Consulting, Ltd. prepared this report for U.S. EPA under contract to Industrial Economics, Inc. (U.S. EPA Contract # 68-D9-9018). DISCLAIMER The observations articulated in this report and its appendices represent Ross & Associates’ interpretation of the research, case study information, and interviews with lean experts and do not necessarily represent the opinions of the organizations or lean experts interviewed or researched as part of this effort. U.S. Environmental Protection Agency (EPA) representatives have reviewed and approved this report, but this does not necessarily constitute EPA endorsement of the observations or recommendations presented in this report. Lean Manufacturing and the Environment: Research on Advanced Manufacturing Systems and the Environment and Recommendations for Leveraging Better Environmental Performance Table of Contents Executive Summary 1 I. Introduction 6 A. Purpose 6 B. Project Activities 7 II. Introduction to Lean Manufacturing 8 A. What is Lean Manufacturing? 8 B. What Methods Are Organizations Using to Implement Lean? 10 C. Why Do Companies Engage in Lean Manufacturing? 14 D. Who Is Implementing Lean? 18 III. Key Observations Related to Lean Manufacturing and its Relationship to Environmental Performance and the Regulatory System 21 Observation 1 21 Observation 2 29 Observation 3 33 Observation 4 40 IV. Recommendations 44 Recommendation 1 44 Recommendation 2 45 Recommendation 3 46 Bibliography 48 Appendix A: Lean Terms and Definitions 51 Appendix B: Lean Experts and Case Study Companies 53 Lean Experts Interviewed 53 Companies Addressed by Case Studies 53 Appendix C: Case Study Summaries 54 Apollo Hardwoods Company 54 General Motors Corporation 57 Goodrich Corporation - Aerostructures Group 60 Warner Robins U.S. Air Force Base 64 Lean Manufacturing and the Environment October 2003 | Page 1 1 U.S. Environmental Protection Agency. Pursuing Perfection: Case Studies Examining Lean Manufacturing Strategies, Pollution Prevention, and Environmental Regulatory Management Implications. U.S. EPA Contract # 68-W50012 (August 20, 2000). 2 Simon Caulkin. “Waste Not, Want Not,” The Observer (September 2002). Executive Summary Background “Lean manufacturing” is a leading manufacturing paradigm being applied in many sectors of the U.S. economy, where improving product quality, reducing production costs, and being “first to market” and quick to respond to customer needs are critical to competitiveness and success. Lean principles and methods focus on creating a continual improvement culture that engages employees in reducing the intensity of time, materials, and capital necessary for meeting a customer’s needs. While lean production’s fundamental focus is on the systematic elimination of non-value added activity and waste from the Support to the identification of potential risks for the environment and human health arising from hydrocarbons operations involving hydraulic fracturing in Europe Report for European Commission DG Environment AEA/R/ED57281 Issue Number 11 Date 28/05/2012 Report for European Commission DG Environment AEA/R/ED57281 Issue Number 17 Date 10/08/2012 Support to the identification of potential risks for the environment and human health arising from hydrocarbons operations involving hydraulic fracturing in Europe Ref: AEA/ED57281/Issue Number 17 ii Customer: Contact: European Commission DG Environment Dr Mark Broomfield AEA Technology plc Gemini Building, Harwell, Didcot, OX11 0QR t: 0870 190 6389 e: mark.broomfield@aeat.co.uk AEA is a business name of AEA Technology plc AEA is certificated to ISO9001 and ISO14001 Customer reference: 07.0307/ENV.C.1/2011/604781/ENV.F1 Confidentiality, copyright & reproduction: This report is the Copyright of the European Commission DG Environment and has been prepared by AEA Technology plc under contract to the European Commission DG Environment ref 07.0307/ENV.C.1/2011/604781/ENV.F1. The contents of this report may not be reproduced in whole or in part, nor passed to any organisation or person without the specific prior written permission of the European Commission DG Environment. AEA Technology plc accepts no liability whatsoever to any third party for any loss or damage arising from any interpretation or use of the information contained in this report, or reliance on any views expressed therein. This document does not represent the views of the European Commission. The interpretations and opinions contained in it are solely those of the authors. Author: Dr Mark Broomfield Approved By: Andrew Lelland Date: 10 August 2012 Signed: AEA reference: Ref: ED57281- Issue Number 17 Support to the identification of potential risks for the environment and human health arising from hydrocarbons operations involving hydraulic fracturing in Europe Ref: AEA/ED57281/Issue Number 17 iii Executive summary Introduction Exploration and production of natural gas and oil within Europe has in the past been mainly focused on conventional resources that are readily available and relatively easy to develop. This type of fuel is typically found in sandstone, siltstone and limestone reservoirs. Conventional extraction enables oil or gas to flow readily into boreholes. As opportunities for this type of domestic extraction are becoming increasingly limited to meet demand, EU countries are now turning to exploring unconventional natural gas resources, such as coalbed methane, tight gas and in particular shale gas. These are termed ‘unconventional’ resources because the porosity, permeability, fluid trapping mechanism, or other characteristics of the reservoir or rock formation from which the gas is extracted differ greatly from conventional sandstone and carbonate reservoirs. In order to extract these unconventional gases, the characteristics of the A.Yuwono and P. Schulze Lammers . “Odor Pollution in the Environment and the Detection Instrumentation”. Agricultural Engineering International: the CIGR Journal of Scientific Research and Development. Invited Overview Paper. Vol. VI. July, 2004. 1 Odor Pollution in the Environment and the Detection Instrumentation Arief Sabdo Yuwono 1 and Peter Schulze Lammers 2 1 Dept. of Agricultural Engineering, Bogor Agricultural University (IPB), PO Box 220 Bogor 16002, Indonesia. E-mail: ayuwono@ipb.ac.id 2 Dept. of Agricultural Engineering, University of Bonn, Nussallee 5, 53115 Bonn, Germany. E-mail: lammers@uni-bonn.de ABSTRACT Odor or malodor, which refers to unpleasant smells, is nowadays considered an important environmental pollution issue. Odor pollution abatement has involved a number of bodies. A comprehensive description of pollution abatement and the development of the accompanying instrumentation technology are therefore critical links to understand the whole dimension of odor pollution in the environment. In this paper, odor pollution in the environment will be reviewed, including its sources and dispersion, the physical and chemical properties of odor, odor emission regulations in selected countries, odor control technologies as well as the state-of-the-art instrumentation and technology that are necessary to monitor odor, e.g., chemical sensors, olfactometry, gas chromatography, and electronic noses. Keywords: odor, odor pollution, instrumentation, olfactometry INTRODUCTION Odor, which refers to unpleasant smells, is considered as an important environmental pollution issue. Attention to odor as an environmental nuisance has been growing as a result of increasing industrialization and the awareness of people’s need for a clean environment. As a consequence, efforts to abate odor problems are necessary in order to maintain the quality of the environment. In this framework, understanding the odor problem and the origin and dispersion of odors, abatement and detection methods are, therefore, very important aspects of odor pollution in the environment. One of the challenges when dealing with the odor pollution problem is the technique for the detection of odor emissions. Detection is an important aspect concerning compliance with the environmental regulations, since the detection results will be used as proof of the release of odorous substances to the environment. A successful and excellent detection technique will result in a sequence of accountably data. A reliable instrument, therefore, is necessary. There is a growing tendency in industry to develop a detection system that enables real-time measurements. In this way, a simple and quick online-monitoring system can be established and time-consuming methods avoided. Sampling and conventional analytical procedures are then no longer necessary, since the detection and measurement of the odorous compounds can be carried out quickly and the results presented on demand. A.Yuwono and P. Schulze Lammers . “Odor Pollution in the Environment and the Detection Instrumentation”. Agricultural Engineering International: the CIGR Journal of Scientific Research and Development. Invited Overview Paper. Vol. VI. ... Burn them, and they release carcinogens into the air Their improper (intentional or not) incineration adds to air pollution and increases smog Dump them in landfills, and they not decompose As landfill... nations However, much of their land is held in “trust,” 10/15 The Environment and Society meaning that the federal government holds title to the land in trust on behalf of the tribe” (Bureau of... land used by nomads The nomads, like the herdsmen in 1800s Oxford, increased their heads of cattle without planning for its impact on the greater good The soil eroded, the plants died, then the