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By the end of this section, you will be able to:

  • Evaluate the benefits and costs of environmental protection
  • Explain the effects of ecotourism
  • Apply marginal analysis to illustrate the marginal costs and marginal benefits of reducing pollution

Government economists have estimated that U.S. firms may pay more than $200 billion per year to comply with federal environmental laws. That is big bucks. Is the money well spent?

Benefits and costs of clean air and clean water

The benefits of a cleaner environment can be divided into four areas: (1) people may stay healthier and live longer; (2) certain industries that rely on clean air and water, such as farming, fishing, and tourism, may benefit; (3) property values may be higher; and (4) people may simply enjoy a cleaner environment in a way that does not need to involve a market transaction. Some of these benefits, such as gains to tourism or farming, are relatively easy to value in economic terms. It is harder to assign a monetary value to others, such as the value of clean air for someone with asthma. It seems impossible to put a clear-cut monetary value on still others, such as the satisfaction you might feel from knowing that the air is clear over the Grand Canyon, even if you have never visited the Grand Canyon.

Although estimates of environmental benefits are not precise, they can still be revealing. For example, a study by the Environmental Protection Agency looked at the costs and benefits of the Clean Air Act from 1970 to 1990. It found that total costs over that time period were roughly $500 billion—a huge amount. However, it also found that a middle-range estimate of the health and other benefits from cleaner air was $22 trillion—about 44 times higher than the costs. A more recent study by the EPA estimated that the environmental benefits to Americans from the Clean Air Act will exceed their costs by a margin of four to one. The EPA estimated that “in 2010 the benefits of Clean Air Act programs will total about $110 billion. This estimate represents the value of avoiding increases in illness and premature death which would have prevailed.” Saying that overall benefits of environmental regulation have exceeded costs in the past, however, is very different from saying that every environmental regulation makes sense. For example, studies suggest that when breaking down emission reductions by type of contaminants, the benefits of air pollution control outweigh the costs primarily for particulates and lead, but when looking at other air pollutants, the costs of reducing them may be comparable to or greater than the benefits. Just because some environmental regulations have had benefits much higher than costs does not prove that every individual regulation is a sensible idea.

Ecotourism: making environmentalism pay

The definition of ecotourism is a little vague. Does it mean sleeping on the ground, eating roots, and getting close to wild animals? Does it mean flying in a helicopter to shoot anesthetic darts at African wildlife? Or a little of both? The definition may be fuzzy, but tourists who hope to appreciate the ecology of their destination—“eco tourists”—are the impetus to a big and growing business. The International Ecotourism Society estimates that international tourists interested in seeing nature or wildlife will take 1.56 billion trips by 2020.

Questions & Answers

what's economics
Peace Reply
how do I answer aquestion in econmics
Blessing Reply
A thorough thought through the questions alongside examining ressearch materials.
Frank
I what I think is by observing the question and analysing the question and use the economic terms to answer the particular question and what it required for.
Muhammed
why the demand slopping down word? plz I need an answer
Salami
as price increases fewer people want to buy it
Sean
When the quantity of goods is more, price falls and demand increases. Remember, demand is sensitive to price change and so the curve slopes downward when consumers demand more goods because of price falls. A.E.
Frank
what is modelling economics growth?
Dagim Reply
I would like to know
Muhammed
Meaning of a monopolist
Lindah Reply
single line product
Muhammed
I really mean by single line of products in this kind of situation the market as a feature of both perfect and monopoly , as outlined below: it is market with many buyer's and sellers, but: with differentiated commodities(not homogenous). I bet I answered your question. thanks.
Muhammed
it as a feature of both monopoly and perfect market competition.
Muhammed
🙏
aminu
the differentiation is not so much with technicalities of the commodities but with branding, packing, servicing etc.
Muhammed
what is monopoly
Sewu Reply
Monopoly is a market structure where there is single seller or producer of a commodity which has no close substitute.
Jose
explain law of increasing opportunity cost
Glennis Reply
how many labour market are there in Nigeria
Ayinde Reply
what is monopoly?
Prince Reply
it is a type of imperfect market where there are single seller of a product
Kehinde
what is society's basic economic problems?
ABDI Reply
scarcity
Solomon
another definition of economic s
Louisa Reply
what is economic s
Louisa
is the study of the individual interest
Tut
or the study of the scarcity
Tut
Is an inquiry to the nature and causes of wealth to the nation
IBITOYE
economic as social science which covers the actions of individuals and groups of individuals in the processes of producing, exchanging and consuming of goods and services.
ABDI
compar and contrast the four market structure
Alamuddin
The study or principles of the way money, business and industry organized.
Arsh
what is optimal biomass
Sheikh Reply
biological approach in economics
Sheikh
What is the difference between pure monopoly and natural monopoly
Joseph Reply
what is price elasticity demand
Alex
Explain the law of demand
Manoj
hello my name is Godwin David am an economics student
GODWIN Reply
what's the opportunity cost for free goods?
Bah
A free good is a good with zero opportunity cost . This means it can be consumed in as much quantity as needed without reducing its availability to others.
Wilfred
yes tucker, a free good is available without limit therefore, it is not scarce at all. ...Aviation economist.
Frank
I'm Daniel
Daniel
I'm new here
Daniel
U welcome
Wilfred
what is the demand and supply of QD is equal to 4040 thousand
Prince Reply
uses and limitations of elasticity of demand concept
Tinodaishe
Elasticity of demand refers to the degree of responsiveness of quantities
grace Reply
Thanks
Ogbonna
Hi everyone
Ogbonna

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Source:  OpenStax, Principles of economics. OpenStax CNX. Sep 19, 2014 Download for free at http://legacy.cnx.org/content/col11613/1.11
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