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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

the meaning of elasticity
Yawe Reply
when equilibrium is égal to 1
Moussa
The tendency to change consumption habits with change in price
Iben
The type of elasticity if demand
Okonkwo Reply
aren't leaving too about bathrooms
SHADAB
I don't understand
Amina
like.
Ubong
what is money
Lawal Reply
what is supply
Lawal
the total number of goods present at a particular area at a particular time
Offset
the meaning of elasticity
Affum Reply
how to knw the break even point in business
Edmore Reply
hello
Marshal
hello
ghulam
hi
Kakay
hi
Ornill
hi
Bakari
Good evening
owi
when TOTAL COST & TOTAL REVENUE equal each other that's break even point
Bappy
How is everyone doing
Kakay
yaah
Chris
🤙🤙
Kakay
Good evening
Amarachi
how are you feeling
Sorie
hello
Marshal
hello
McClean
Hai👋👋
Noah
Hey
Andile
hello
Offset
what's up?
Offset
what are the importance of economics
sani Reply
hello
Marshal
welcome
Zaid
am new here
Kakay
hello I'm new here
Mona
your welcome
Bakari
thanks
Mona
where are you from?
Bakari
Hello I'm new here
Amarachi
what is development?
juwel Reply
it shows how many products customers are willing to purchase as the price of those product increase or decrease
Asha Reply
economics as a science
skima Reply
What is utility
Jimoh Reply
utility is a total satisfaction derives from a consumer.
Umar
what is ranking reveal choices?
Umar
wants satisfying power of a commodity is known as utility........
SHADAB
What is elasity
bohvy
Differentiate between scarcity and choice and explain how they effect perfectly elasiticity of demand and give relevant example with type of goods affected
PATRICK
Utility is ability if of available goods to satisfy human wants
PATRICK
any idea about equilibrium?
Umar
equilibrium where price and quantity demanded equals
Bappy
e
john
Equilibrium is when quantity demanded of goods and services is equal to supply to the market.
john
saaa.....
Bright
how about the profit....anybody can explain
Jeff
how about equilibrium of consumer?
Umar
bappy,john thank you the answers.
Umar
Utility Simply means the satisfaction a consumer derives from consuming a good or service
Hez
Pls can someone explain Elasticity of demand in a short terms
Osuayan
it's a degree of responsiveness to demand due to changes in prices
Ukpen
what is scarcity? pls help
Mikateko Reply
scarity is when there is a huge demand for certain goods and services but there's limited resources to actually produce those things
Mario
thank you
Kakay
what is development?
juwel
what is distribution
umar Reply
1.what is distribution? 2.what are factors affecting distribution? 3.releat what you are writing in the contest of economics and Nigeria situation
umar
what is demand
Obianyido Reply
things that are needed or wanted
Mario
The market for you In Ilorin has the following demand and supply equation Qd + 5p =9520 Qs =2.5p - 125 a) determine the equation price and quantity b) Explain the situation when the market price is below the equlibrum price
Rasheee Reply
solutions
Alex
What is scale of preference
Richmond Reply
Pls what is scale of preference
Richmond
scale of preference is a arrangement of individual wants in order of priority
Lamina
the arrangement of people want inoder of demand
Ada
This simply means the arrangement of human needs.
Oluwatobiloba

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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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