EnvironmentalEconomics, 2024Release
q2 q2 q2
Instructor’s Manual to Accompany q2 q2 q2
q2 ENVIRONMENTALECONOMICS q2
An Introduction q2
2024 Release q2
Barry C. Field q2 q2
UniversityofMassachusetts Amherst
q2 q2 q2
Martha K. Field Greenfield q2 q2 q2
CommunityCollege
2
q 2
q
© McGraw Hill LLC. All rights reserved. No reproduction or distribution withoutthe prior written consent ofMcGraw Hill LLC.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
,EnvironmentalEconomics,2024Release q2 q2 q2
Table of Contents
q2 q2
Preface .................................................................................................................................. 2
Section I. Introduction
q2 q2
Chapter 1. q2 What Is Environmental Economics? .................................................................... 4
q2 q2 q2
Chapter 2. q2 The Economy and the Environment ..................................................................... 6
q2 q2 q2 q2
Section II. Analytical Tools
q2 q2 q2
Chapter 3. q2 Benefits and Costs, Supply and Demand....................................................... 9
q2 q2 q2 q2 q2 q2
Chapter 4. q2 Markets, Externalities, and Public Goods...................................................... 15
q2 q2 q2 q2 q2
Chapter 5. q2 The Economics of Environmental Quality..................................................... 19
q2 q2 q2 q2
Section III. Environmental Analysis
q2 q2 q2
Chapter 6. q2 Frameworksof Analysis..................................................................................
q2 q2 q2 24
Chapter 7. q2 Benefit–Cost Analysis: Benefits...................................................................... q2 q2 28
Chapter 8. q2 Benefit–CostAnalysis: Costs.......................................................................... q2 q2 q2 34
Section IV. Environmental Policy Analysis
q2 q2 q2 q2
Chapter 9. q2 Criteria for Evaluating Environmental Policies...............................................
q2 q2 q2 q2 37
Chapter 10. q2 Decentralized Policies: Liability Laws,Property Rights, Voluntary Action... q2 q2 q2 q2 q2 q2 q2 41
Chapter 11. q2 Command-and-ControlStrategies: The Case of Standards............................. q2 q2 q2 q2 q2 q2 47
Chapter 12. q2 Incentive-Based Strategies: Environmental Charges andSubsidies ............... q2 q2 q2 q2 q2 q2 53
Chapter 13. q2 Incentive-BasedStrategies: MarketTrading Systems..................................... q2 q2 q2 q2 q2 57
Section V. Environmental Policy in the United States
q2 q2 q2 q2 q2 q2 q2
Chapter 14. q2 FederalWater Pollution-Control Policy..........................................................
q2 q2 q2 q2 62
Chapter 15. q2 Federal Air Pollution-Control Policy...............................................................
q2 q2 q2 67
Chapter 16. q2 Federal Policy on Toxic and Hazardous Substances.......................................
q2 q2 q2 q2 q2 q2 q2 71
Chapter 17. q2 State and Local Environmental Issues.............................................................
q2 q2 q2 q2 q2 75
Section VI. Global Environmental Issues
q2 q2 q2 q2
Chapter 18. q2 Global Climate Change....................................................................................... 78
q2 q2
Chapter 19. q2 International Environmental Agreements ............................................................ 82
q2 q2
Chapter 20. q2 Globalization ..................................................................................................... 85
Chapter 21. q2 Economic Development and the Environment ..................................................... 88
q2 q2 q2 q2
1
© McGraw Hill LLC. All rights reserved. Noreproduction or distribution withoutthe prior written consent ofMcGraw Hill LLC.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
,EnvironmentalEconomics,2024Release q2 q2 q2
Preface
Environmental Economics, An Introduction is designed as a text for a one- semester q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
course. It is based on courses we have taught for many years, courses predicated on the notion
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
that the subject is interesting and important enough to be presented to a wide audience of
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
lower-division students, rather than delayed until students have negotiated a set of
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
prerequisite courses. Thus, the book is meant to be used by students who have not necessarily
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
had any economics yet. Nevertheless, the book is intended to have a distinctly analytical
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
perspective. Given these objectives, it’s necessary to focus on a limited number of primary
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
concepts―incentives, efficiency, the equimarginal principle, cost-effectiveness, and so on.
q2 q2 q2 q2 q2 q2 q2 q2 q2
It’s also necessary, in the later chapters on domestic and international environmental policy,
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
to concentrate on the main stories and avoid getting drawn into the endless details that these
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
subjects contain.
q2 q2
After the first two introductory chapters, there are three chapters on the most basic of q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 economic principles. These are probably about the minimum for someone who has never had q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 any economics. In writing these chapters, there was a continuing temptation to go for a slightly
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 higher level of sophistication. We tried very hard to resist this, to keep clearly in mind the type
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 of student for whom the book is primarily intended. We would hope that students who have
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 had, say, introductory micro, would find these chapters a useful review.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
In this instructor’s manual, we have worked through each of the chapters, discussing q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 (a) updates of subjects that are new to the chapter in this edition, (b) the objectives of each, (c)
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 main ideas covered, (d) points of discussion (cautions, techniques we have found useful,
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 possible extensions, etc.), and (e) brief answers to each of the questions for further discussion.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
The book is 21 chapters long, perhaps too long for students to get through completely q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
under normal circumstances. The book is divided into sections so that different instructors can
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
emphasize the material they find most useful. After having gone through Sections I and II, you
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
may wish to pick and choose chapters from the other sections depending on the relative
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
emphasis you wish to put on: (a) benefit–cost analysis,
q2 q 2 q2 q2 q2 q2 q2 q2 q2
(b) policyanalysis, (c) U.S. environmental policy, and (d) international issues.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
The questions at the end of the chapters are called ―discussion‖ questions, but they are q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 perhaps more specific than this label implies. For the most part, they are not meant to lead to
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 open-ended discussion but have answers that we hope are more or less correct. They are q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 designed to lead students toward making modest extensions of the ideas covered, which q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 should help them both review the material and perhaps think more deeply about it.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
The exhibits presented throughout the chapters are for the purpose of illustrating q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 points in the text. The objective is to show students that the economic ideas we are discussing
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 in the classroom are actually at work in the real world.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
2
© McGraw Hill LLC. All rights reserved. Noreproduction or distribution withoutthe prior written consent ofMcGraw Hill LLC.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
, EnvironmentalEconomics,2024Release q2 q2 q2
Appendix A of acronyms and abbreviations is updated. We recommend highlighting q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
this feature for students. A short, matching quiz of about 10 of the most used acronyms or
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
abbreviations, like the EPA, helps plug students into the lingo of environmental economics.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
Appendix B is a list of websites, which can be found in the Instructor’s Resources area q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 of Connect.
q2
The 2024 Release of the book preserves the basic structure of the earlier editions.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
Some of the new material we have added includes:
q2 q2 q2 q2 q2 q2 q2 q2
• Forever Chemicals (PFAS) q2 q2 Chapter 16 q2
• Toxics and Drinking Water Contamination
q2 q2 q2 q2 Chapter 14 q2
• Circular Economy q2 Chapters 2 and 17 q2 q2 q2
• Natural Capital q2 Chapter 2 q2
• Economics of Technical Change q2 q2 q2 Chapter 5 q2
• Paris Agreement and Subsequent COP Meetings
q2 q2 q2 q2 q2 Chapters 18, 19, and 21 q2 q2 q2 q2
• Environmental Justice q2 Chapters 9 and 16 q2 q2 q2
• Economics of Subsidies & the Inflation Reduction Act q2 q2 q2 q2 q2 q2 q2 Chapter 15 q2
• Carbon Offset Markets q2 q2 Chapter 13 q2
• Electric Vehicles and Energy Intensity q2 q2 q2 q2 Chapter 15 q2
• Green TechnologyTransfer and Developing Countries
q2 q2 q2 q2 q2 Chapter 21 q2
3
© McGraw Hill LLC. All rights reserved. Noreproduction or distribution withoutthe prior written consent ofMcGraw Hill LLC.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 q2 q2
Instructor’s Manual to Accompany q2 q2 q2
q2 ENVIRONMENTALECONOMICS q2
An Introduction q2
2024 Release q2
Barry C. Field q2 q2
UniversityofMassachusetts Amherst
q2 q2 q2
Martha K. Field Greenfield q2 q2 q2
CommunityCollege
2
q 2
q
© McGraw Hill LLC. All rights reserved. No reproduction or distribution withoutthe prior written consent ofMcGraw Hill LLC.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
,EnvironmentalEconomics,2024Release q2 q2 q2
Table of Contents
q2 q2
Preface .................................................................................................................................. 2
Section I. Introduction
q2 q2
Chapter 1. q2 What Is Environmental Economics? .................................................................... 4
q2 q2 q2
Chapter 2. q2 The Economy and the Environment ..................................................................... 6
q2 q2 q2 q2
Section II. Analytical Tools
q2 q2 q2
Chapter 3. q2 Benefits and Costs, Supply and Demand....................................................... 9
q2 q2 q2 q2 q2 q2
Chapter 4. q2 Markets, Externalities, and Public Goods...................................................... 15
q2 q2 q2 q2 q2
Chapter 5. q2 The Economics of Environmental Quality..................................................... 19
q2 q2 q2 q2
Section III. Environmental Analysis
q2 q2 q2
Chapter 6. q2 Frameworksof Analysis..................................................................................
q2 q2 q2 24
Chapter 7. q2 Benefit–Cost Analysis: Benefits...................................................................... q2 q2 28
Chapter 8. q2 Benefit–CostAnalysis: Costs.......................................................................... q2 q2 q2 34
Section IV. Environmental Policy Analysis
q2 q2 q2 q2
Chapter 9. q2 Criteria for Evaluating Environmental Policies...............................................
q2 q2 q2 q2 37
Chapter 10. q2 Decentralized Policies: Liability Laws,Property Rights, Voluntary Action... q2 q2 q2 q2 q2 q2 q2 41
Chapter 11. q2 Command-and-ControlStrategies: The Case of Standards............................. q2 q2 q2 q2 q2 q2 47
Chapter 12. q2 Incentive-Based Strategies: Environmental Charges andSubsidies ............... q2 q2 q2 q2 q2 q2 53
Chapter 13. q2 Incentive-BasedStrategies: MarketTrading Systems..................................... q2 q2 q2 q2 q2 57
Section V. Environmental Policy in the United States
q2 q2 q2 q2 q2 q2 q2
Chapter 14. q2 FederalWater Pollution-Control Policy..........................................................
q2 q2 q2 q2 62
Chapter 15. q2 Federal Air Pollution-Control Policy...............................................................
q2 q2 q2 67
Chapter 16. q2 Federal Policy on Toxic and Hazardous Substances.......................................
q2 q2 q2 q2 q2 q2 q2 71
Chapter 17. q2 State and Local Environmental Issues.............................................................
q2 q2 q2 q2 q2 75
Section VI. Global Environmental Issues
q2 q2 q2 q2
Chapter 18. q2 Global Climate Change....................................................................................... 78
q2 q2
Chapter 19. q2 International Environmental Agreements ............................................................ 82
q2 q2
Chapter 20. q2 Globalization ..................................................................................................... 85
Chapter 21. q2 Economic Development and the Environment ..................................................... 88
q2 q2 q2 q2
1
© McGraw Hill LLC. All rights reserved. Noreproduction or distribution withoutthe prior written consent ofMcGraw Hill LLC.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
,EnvironmentalEconomics,2024Release q2 q2 q2
Preface
Environmental Economics, An Introduction is designed as a text for a one- semester q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
course. It is based on courses we have taught for many years, courses predicated on the notion
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
that the subject is interesting and important enough to be presented to a wide audience of
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
lower-division students, rather than delayed until students have negotiated a set of
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
prerequisite courses. Thus, the book is meant to be used by students who have not necessarily
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
had any economics yet. Nevertheless, the book is intended to have a distinctly analytical
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
perspective. Given these objectives, it’s necessary to focus on a limited number of primary
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
concepts―incentives, efficiency, the equimarginal principle, cost-effectiveness, and so on.
q2 q2 q2 q2 q2 q2 q2 q2 q2
It’s also necessary, in the later chapters on domestic and international environmental policy,
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
to concentrate on the main stories and avoid getting drawn into the endless details that these
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
subjects contain.
q2 q2
After the first two introductory chapters, there are three chapters on the most basic of q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 economic principles. These are probably about the minimum for someone who has never had q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 any economics. In writing these chapters, there was a continuing temptation to go for a slightly
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 higher level of sophistication. We tried very hard to resist this, to keep clearly in mind the type
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 of student for whom the book is primarily intended. We would hope that students who have
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 had, say, introductory micro, would find these chapters a useful review.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
In this instructor’s manual, we have worked through each of the chapters, discussing q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 (a) updates of subjects that are new to the chapter in this edition, (b) the objectives of each, (c)
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 main ideas covered, (d) points of discussion (cautions, techniques we have found useful,
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 possible extensions, etc.), and (e) brief answers to each of the questions for further discussion.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
The book is 21 chapters long, perhaps too long for students to get through completely q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
under normal circumstances. The book is divided into sections so that different instructors can
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
emphasize the material they find most useful. After having gone through Sections I and II, you
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
may wish to pick and choose chapters from the other sections depending on the relative
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
emphasis you wish to put on: (a) benefit–cost analysis,
q2 q 2 q2 q2 q2 q2 q2 q2 q2
(b) policyanalysis, (c) U.S. environmental policy, and (d) international issues.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
The questions at the end of the chapters are called ―discussion‖ questions, but they are q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 perhaps more specific than this label implies. For the most part, they are not meant to lead to
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 open-ended discussion but have answers that we hope are more or less correct. They are q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 designed to lead students toward making modest extensions of the ideas covered, which q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 should help them both review the material and perhaps think more deeply about it.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
The exhibits presented throughout the chapters are for the purpose of illustrating q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 points in the text. The objective is to show students that the economic ideas we are discussing
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 in the classroom are actually at work in the real world.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
2
© McGraw Hill LLC. All rights reserved. Noreproduction or distribution withoutthe prior written consent ofMcGraw Hill LLC.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
, EnvironmentalEconomics,2024Release q2 q2 q2
Appendix A of acronyms and abbreviations is updated. We recommend highlighting q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
this feature for students. A short, matching quiz of about 10 of the most used acronyms or
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
abbreviations, like the EPA, helps plug students into the lingo of environmental economics.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
Appendix B is a list of websites, which can be found in the Instructor’s Resources area q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
q2 of Connect.
q2
The 2024 Release of the book preserves the basic structure of the earlier editions.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
Some of the new material we have added includes:
q2 q2 q2 q2 q2 q2 q2 q2
• Forever Chemicals (PFAS) q2 q2 Chapter 16 q2
• Toxics and Drinking Water Contamination
q2 q2 q2 q2 Chapter 14 q2
• Circular Economy q2 Chapters 2 and 17 q2 q2 q2
• Natural Capital q2 Chapter 2 q2
• Economics of Technical Change q2 q2 q2 Chapter 5 q2
• Paris Agreement and Subsequent COP Meetings
q2 q2 q2 q2 q2 Chapters 18, 19, and 21 q2 q2 q2 q2
• Environmental Justice q2 Chapters 9 and 16 q2 q2 q2
• Economics of Subsidies & the Inflation Reduction Act q2 q2 q2 q2 q2 q2 q2 Chapter 15 q2
• Carbon Offset Markets q2 q2 Chapter 13 q2
• Electric Vehicles and Energy Intensity q2 q2 q2 q2 Chapter 15 q2
• Green TechnologyTransfer and Developing Countries
q2 q2 q2 q2 q2 Chapter 21 q2
3
© McGraw Hill LLC. All rights reserved. Noreproduction or distribution withoutthe prior written consent ofMcGraw Hill LLC.
q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2 q2
