Resource_Economics_Part_4___Handout.pdf FANR 1100
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This 2 page Class Notes was uploaded by Caitlyn Mackenzie on Sunday August 21, 2016. The Class Notes belongs to FANR 1100 at University of Georgia taught by Wilde in Fall 2016. Since its upload, it has received 2 views.
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Date Created: 08/21/16
Natural Resource Economics: Part 4 FANR/MARS 1100 Resource Management: Three Principles #1 Time preference o How fast you can wait for a return on your investment o Called a Planning horizon o For a farmer, the planning horizon is 1 season. o For a forester, the planning horizon is 20100 years. #2 Opportunity Cost o When you make a choice, you lose the opportunity to chose other things o Trees growing at 5% per year versus stock growing at 10% #3 Discount Rate o Reducing future decisions to present dollars o How much you have to invest to get X dollars in the future Other Considerations Prevention – don’t pollute; costs dollars Control – capture pollutants after release; costs lots more dollars If caught, = RISK; including fines, prison, and lawsuits Natural Capital Ecological wealth Examples: Soil, farm, forests, fish, all natural resources (renewable and nonrenewable) Renewable and nonrenewable Difficult to assign a value to dirt, fish, etc. Environmental Progress Since 1970, emissions of 6 common air pollutants decreased an average of 24%. Since 1978, average lead level in children’s blood decreases 75%. Recovery of solid municipal waste increased from 7% (1970) to 28% (1998). 141,000 leaky underground storage tanks have been cleaned since 1990. Resource Inventories Countries survey their natural resources and track supply to see if economic growth is Depleting the resource. U.S.F.S conducts 5year and 10year resource assessments Green Taxes Definition: taxes or fees levied on natural resources Paid by the producer e.g. coal mining company o raises the cost of raw materials o Encourages conservation Levied on polluters sometimes called a pollution tax Full Cost Pricing Definition: Pricing that reflects all the costs associated with the production of the material For example, mining companies would pay for acid rain, acid runoff, reclamation Rarely done! Incentives for Sustainable Development Examples: Green taxes, fullcost pricing, subsidies and tax breaks, tradable/marketable permits(Cap and Trade).