Risk assessment provides an orderly, clearly stated, and consistent way
to deal with scientific issues when evaluating whether a hazard exists and
what the magnitude of the hazard may be. It includes the probability of risk,
the consequences of risk, and the economics of risk.
A cost-benefit analysis includes identification of the project to be evaluated,
determination of favorable and unfavorable impacts, determination of the values
of those impacts, and calculation of the net benefit.
Criticism of the cost-benefit analysis is based on the question of whether
everything has an economic value. If economic thinking dominates society,
then even noneconomic values, like beauty, can survive only if a monetary
value is assigned to them.
Sustainable development is criticized as being ambiguous and open to a wide
range of interpretations. There is confusion between the terms sustainable
growth, sustainable use, and sustainable development. In addition, since
it requires a balance between economic requirements and ecological concerns
worldwide, some believe that the world should not impose environmental protection
standards upon poorer nations without also helping them move into the economic
mainstream.
External costs are costs not borne by the
entity the causes the problem. Pollution of air and water are often external
costs since the people who cause the problem do not pay to clean it up. Erosion
damage by improper logging and abandoned waste sites are other examples.
Pollution-prevention costs are those incurred either in the private sector
or by government to prevent the pollution that would otherwise result from
some production or consumption activity.
Common-property resource development generally leads to overexploitation
and misuse because effectively no one owns the resource. Common ownership
of air makes it virtually costless for any industry or individual to dispose
of wastes by burning them. There is also a lack of enforceable property rights
to commonly owned resources.
In 1987, Conservation
International, bought $650,000 of Bolivia’s foreign debt in exchange for Bolivia’s
promise to establish a national park.
Subsidiesmay include consumer rebates for purchases of environmentally
friendly goods, loans for businesses planning to implement environmental products,
and other monetary incentives designed to reduce the costs of improving environmental
performance. The cost of government management of federal forests is a subsidy
to the forest products industry. Market-based instrumentsinclude: Information
programs provide consumers with information about the environmental consequences
of purchasing decisions, Tradable emissions permits, Emission fees and taxes,
Deposit-refund programs, and Performance bonds Life cycle analysisis the process of assessing the environmental effects associated with
the production, use, re-use, and disposal of a product over its entire useful
life. It includes assigning dollar costs to such items as: pollution, disposal,
energy costs and useful length of life.
People generally willingly accept risks with which they are familiar and
which they encounter daily, such as: the risks associated with automobile
travel and the risk associated with alcohol use.
Renewable: wildlife, soil, forests, freshwater, etc. Nonrenewable:
iron ore, oil, coal, land, mountains,etc.
The economic cost of environmental degradation is often not included
as a factor in economic analysis used to justify a project or action. However,
the costs become obvious with the passage of time. For example, cutting the
trees on a hillside often leads to increased erosion, which affects down-slopeenvironments.
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