Dictionary of Environmental Economics Dictionary of Environmental Economics Anil Markandya, Renat Perelet, Pamela Mason and Tim Taylor Earthscan Publications Ltd London and Sterling, VA First published in the UK and USA in 2001 by Earthscan Publications Ltd Reprinted 2002 Copyright © Anil Markandya and Renat Perelet, 2001 All rights reserved ISBN: 1 85383 529 3 Typesetting by Composition & Design Services (www.cdsca.com) Printed and bound in the UK by Creative Print and Design Wales, Ebbw Vale Cover design by Richard Reid For a full list of publications please contact: Earthscan Publications Ltd 120 Pentonville Road, London, N1 9JN, UK Tel: +44 (0)20 7278 0433 Fax: +44 (0)20 7278 1142 Email: [email protected] http://www.earthscan.co.uk 22883 Quicksilver Drive, Sterling, VA 20166-2012, USA Earthscan is an editorially independent subsidiary of Kogan Page Ltd and publishes in association with WWF-UK and the International Institute for Environment and Development A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Dictionary of environmental economics / Anil Markandya … [et al.]. p. cm. Includes bibliographical references. ISBN 1-85383-529-3 (hardcover) 1. Environmental economics – Dictionaries. I. Markandya, Anil, 1945- HC79.E5 D53 2001 333.7’03–dc21 00-067275 This book is printed on elemental chlorine-free paper Contents List of Figures and Tables vi List of Acronyms and Abbreviations vii Preface by Anil Markandya xi Acknowledgements xii The Dictionary 1 References 189 List of Figures and Tables Figures 1 Asymptotic Depletion 14 2 Budget Constraint 28 3 The Circular Economy 35 4 The Cobweb Model 41 5 The Efficient Level of Pollution 75 6 The Causes of Environmental Shirking 86 7 Costs and Benefits of Environmental Taxation 88 8 The Impact Pathway Approach 113 9 An Environmental Kuznets Curve 122 10 Market-Based Instruments 129 11 Maximum Sustainable Yield 131 12 The Potential for No-Regrets Options 139 13 Edgeworth Box Showing Pareto Efficiency 147 Tables 1 The FUND Model 39 2 Economic Instruments 72 3 A Non-Cooperation Pay-Off Matrix 141 4 The Prisoners’ Dilemma 153 List of Acronyms and Abbreviations AIJ activities implemented jointly AONB areas of outstanding natural beauty APE assimilative potential of the environment APS ambient permit system BACT best available control technology BAT best available techniques or technology BATNEEC best available techniques not entailing excessive cost BAU business as usual BCA benefit–cost analysis BEP best environmental practice BOD biological oxygen demand BPEO best practicable environmental option BPM best practicable means CAA Clean Air Act CAC command and control regulations CAP Common Agricultural Policy CAS country assistance strategy (World Bank) CATNIP cheapest available technology not involving prosecution CBA cost–benefit analysis CD Cobb Douglas CDM clean development mechanism CEA cost-effectiveness analysis CEE Central and Eastern Europe CFC chlorofluorocarbon CGE computable general equilibrium CH methane 4 CHP combined heat and power cif cost, insurance and freight, or charged in full CITES Convention on International Trade in Endangered Species of Wild Fauna and Flora CO carbon monoxide CO carbon dioxide 2 COD chemical oxygen demand COI cost of illness CSD Commission on Sustainable Development (United Nations) CUA cost–utility analysis CVD countervailing duties CVM contingent valuation method DALY disability-adjusted life year dB decibels dB(A) decibels A scale List of Acronyms and Abbreviations DDT dichlorodiphenyltrichloroethane DNS debt-for-nature swap DO dissolved oxygen dr discount rate DSM demand side management EA environmental assessment EAP environmental action programme EIA environmental impact assessment EIS environmental impact statement EKC environmental Kuznets curve EPA Environmental Protection Act (UK) EPA Environmental Protection Agency (US) EPS emission permit system ERICAM environmental risk internalization through capital markets ES environmental statement ETS effective temperature sum EU European Union EU expected utility EuZW Europäische Zeitschrift für Wirtschaftsrecht EV expected value FDA Food and Drug Administration (US) FCCC Framework Convention on Climate Change FAO Food and Agriculture Organization GATT General Agreement on Tariffs and Trade GCM general circulation models GDI gender-related development index GDP gross domestic product GEF Global Environment Facility GHG greenhouse gas GMO genetically modified organism GNP gross national product GWP global warming potential HDI human development index HPI human poverty index HSI health status index IEA International Energy Agency IEA international environmental agreement IEP intergenerational equity principle I–O input–output IPC integrated pollution control IPM integrated pest management IPCC Intergovernmental Panel on Climate Change IPPC integrated pollution prevention and control IPR intellectual property rights ISEW index of sustainable economic welfare IUCN World Conservation Union (formerly the International Union for Conservation of Nature and Natural Resources) JI joint implementation viii List of Acronyms and Abbreviations KP Kyoto Protocol L energy mean sound level (a steady-state continuous sound eq level with the same energy content as the actual, time- variant, noise level) MAC maximum allowable concentration MARPOL International Convention for the Prevention of Pollution from Ships MB marginal benefit MBI market-based instrument MC marginal cost MDC marginal damage cost MEA multilateral environmental agreement MEW measure of economic welfare MNPB marginal net private benefit MSY maximum sustainable yield NO nitrous oxide 2 NDP net domestic product NGO non-governmental organization NH ammonia 3 NNP net national product NOAA US National Oceanic and Atmospheric Administration NO nitrogen oxides x NPV net present value NSPS new source performance standard O ozone 3 ODA official development assistance ODS ozone-depleting substance OECD Organisation for Economic Co-operation and Development O&M operations and maintenance OP option price OVA objective valuation approach PEA Pareto-efficient allocation PP precautionary principle PPP polluter pays principle or purchasing power parity PRA participatory rural appraisal PSR pressure, state, response indicators QALY quality-adjusted life year RA risk assessment RACT reasonably available control technology RANDP resource-adjusted net domestic product RM risk management SARD sustainable agriculture and rural development SD sustainable development SIP sickness impact profile SMS safe minimum standards SNA system of national accounts SO sulphur dioxide 2 SP stated preference TAC total allowable catch TCM travel cost method ix List of Acronyms and Abbreviations TRIPS trade-related intellectual property rights TSP total suspended particulates TSS total suspended solids UDP undifferentiated discharge permit UN United Nations UNCED United Nations Conference on Environment and Development UNCLOS United Nations Convention on the Law of the Sea UNDP United Nations Development Programme UNEP United Nations Environment Programme UNESCO United Nations Economic, Social and Cultural Organization UPP user pays principle VLYL value of a life year lost VOCs volatile organic compounds VOLY value of life year VOSL value of a statistical life VPF value of a prevented fatality (formerly VOSL) VPP victim pays principle WBCSD World Business Council for Sustainable Development WCED World Commission on Environment and Development WCS World Conservation Strategy WRI World Resources Institute WTA willingness to accept WTO World Trade Organization WTP willingness to pay WTTERC World Tourism and Travel Environment Research Centre XV existence value YLYL years of life years lost ZTCM zonal travel cost method x