08 Economics and Sustainability Free Online FlashCards

What is an externality?

An externality is a cost or benefit of an economic activity that falls on people outside the transaction.

What does a pollution tax do, and what does it not guarantee?

A pollution tax or fee charges polluters for each unit of pollution, creating an incentive to reduce emissions without guaranteeing a particular total.

What does economic valuation of the environment estimate?

Economic valuation estimates how environmental changes affect people or economic activity, such as the costs avoided when wetlands reduce flooding.

What does the SEEA help governments do?

The System of Environmental-Economic Accounting organizes environmental and economic data together, including physical accounts as well as monetary approaches.

What does GDP measure, and what does it not measure by itself?

GDP measures the market value of final goods and services produced within an economy over a period; it does not by itself measure well-being or sustainability.

What is the aim of green-growth approaches?

Green-growth approaches aim to reduce environmental harm while economic output grows, using measures such as cleaner technology, efficiency, and renewable energy.

What is the goal of a steady-state economy?

A steady-state economy seeks to keep material and energy throughput within ecological limits while maintaining a stable overall scale of the economy.

What does social cost include?

Social cost includes both the private cost and the external cost of an activity.

How does cap-and-trade work, and what risk may trading create?

A cap-and-trade system limits total emissions and allows permits to be traded; trading can create local pollution hotspots without health and equity protections.

Why is monetary valuation not a complete measure of nature’s worth?

Monetary estimates depend on methods and assumptions and may miss cultural, intrinsic, or distributional values; they do not represent nature’s complete worth.

Name three important things GDP does not reveal by itself.

GDP alone does not show who receives income, whether natural assets are depleted, or how environmental harm affects health and quality of life.

What does the adjusted net savings measure adjust for?

Adjusted net savings starts from national saving and adjusts for investment in education, resource depletion, and pollution damage.