agri 2312 chapter 10 natural resources, the environment and agriculture
DESCRIPTION
AGRICULTURAL ECONOMICSTRANSCRIPT
Introduction to Agricultural Economics, 5th edPenson, Capps, Rosson, and Woodward
© 2010 Pearson Higher Education,Upper Saddle River, NJ 07458. • All Rights
Reserved.
Natural Resources,the Environmentand Agriculture
Chapter 10
Introduction to Agricultural Economics, 5th edPenson, Capps, Rosson, and Woodward
© 2010 Pearson Higher Education,Upper Saddle River, NJ 07458. • All Rights
Reserved.
Topics of Discussion
Agriculture and the environmentEconomics of the environmentEconomics of resources in agricultureSoil quality and quantityEconomics of soil conservationGovernment policies for agriculture,
natural resources, and the environment
Introduction to Agricultural Economics, 5th edPenson, Capps, Rosson, and Woodward
© 2010 Pearson Higher Education,Upper Saddle River, NJ 07458. • All Rights
Reserved.
Page 171Interactions with natural resources and the environmentInteractions with natural resources and the environment
Introduction to Agricultural Economics, 5th edPenson, Capps, Rosson, and Woodward
© 2010 Pearson Higher Education,Upper Saddle River, NJ 07458. • All Rights
Reserved.
Agriculture and the Environment
Water pollutionAir pollutionGlobal climate changeOther environmental impacts
Pages 171-176
Introduction to Agricultural Economics, 5th edPenson, Capps, Rosson, and Woodward
© 2010 Pearson Higher Education,Upper Saddle River, NJ 07458. • All Rights
Reserved.
Page 173
Water pollutants range from nutrients to PCBs which are known to cause cancer.
Water pollutants range from nutrients to PCBs which are known to cause cancer.
Introduction to Agricultural Economics, 5th edPenson, Capps, Rosson, and Woodward
© 2010 Pearson Higher Education,Upper Saddle River, NJ 07458. • All Rights
Reserved.
Page 174The greenhouse effectThe greenhouse effect
Introduction to Agricultural Economics, 5th edPenson, Capps, Rosson, and Woodward
© 2010 Pearson Higher Education,Upper Saddle River, NJ 07458. • All Rights
Reserved.
Page 175
Temperature record over the past 150 yearsTemperature record over the past 150 years
Introduction to Agricultural Economics, 5th edPenson, Capps, Rosson, and Woodward
© 2010 Pearson Higher Education,Upper Saddle River, NJ 07458. • All Rights
Reserved.
Page 177
Efficient level of abatementEfficient level of abatement
Introduction to Agricultural Economics, 5th edPenson, Capps, Rosson, and Woodward
© 2010 Pearson Higher Education,Upper Saddle River, NJ 07458. • All Rights
Reserved.
Efficient Property Rights
Enforceability: security of individual rightsTransferability: can be transferred from
one individual to anotherExclusivity: all associated benefits and costs
are received by only one individual at a time
Pages 178-179
Introduction to Agricultural Economics, 5th edPenson, Capps, Rosson, and Woodward
© 2010 Pearson Higher Education,Upper Saddle River, NJ 07458. • All Rights
Reserved.
Page 179Efficiency and damage from externalitiesEfficiency and damage from externalities
Introduction to Agricultural Economics, 5th edPenson, Capps, Rosson, and Woodward
© 2010 Pearson Higher Education,Upper Saddle River, NJ 07458. • All Rights
Reserved.
Environmental Policies
Command-and-Control policiesTaxes and subsidiesTransferable rights
Pages 180-183
Introduction to Agricultural Economics, 5th edPenson, Capps, Rosson, and Woodward
© 2010 Pearson Higher Education,Upper Saddle River, NJ 07458. • All Rights
Reserved.
Page 181
Cost of abatement if both firms abate the same amountCost of abatement if both firms abate the same amount
Introduction to Agricultural Economics, 5th edPenson, Capps, Rosson, and Woodward
© 2010 Pearson Higher Education,Upper Saddle River, NJ 07458. • All Rights
Reserved.
Page 182
Taxes and subsidies leads firms to the cost-effective allocation of abatement responsibilities.
Taxes and subsidies leads firms to the cost-effective allocation of abatement responsibilities.
Introduction to Agricultural Economics, 5th edPenson, Capps, Rosson, and Woodward
© 2010 Pearson Higher Education,Upper Saddle River, NJ 07458. • All Rights
Reserved.
Economics of Soil Use
Soil quality and quantityEconomics of conservation• Characteristics of soil
• Present value of soil resources
The Dust Bowl
Pages 183-187
Introduction to Agricultural Economics, 5th edPenson, Capps, Rosson, and Woodward
© 2010 Pearson Higher Education,Upper Saddle River, NJ 07458. • All Rights
Reserved.
Water as an Asset
Surface water• Profitability of water use
• Prior appropriation rights
Groundwater• Conditions for efficient use
• Rate of recharge for aquifers
Transferable rights
Pages 187-189
Introduction to Agricultural Economics, 5th edPenson, Capps, Rosson, and Woodward
© 2010 Pearson Higher Education,Upper Saddle River, NJ 07458. • All Rights
Reserved.
Page 188
Marginal revenue and marginal of water use.Marginal revenue and marginal of water use.
Introduction to Agricultural Economics, 5th edPenson, Capps, Rosson, and Woodward
© 2010 Pearson Higher Education,Upper Saddle River, NJ 07458. • All Rights
Reserved.
US Government Policies
Soil erosion policies and the Conservation Reserve Program• Purpose of the CRP• Direct and indirect effects
Other federal incentive programs• Environmental Quality Incentives Program• Wetlands Reserve Program
Environmental regulationsEndangered Species Act
Pages 189-192
Introduction to Agricultural Economics, 5th edPenson, Capps, Rosson, and Woodward
© 2010 Pearson Higher Education,Upper Saddle River, NJ 07458. • All Rights
Reserved.
SummaryEconomists play a role in designing policies that
affect the environment and natural resources.Incentives matter when designing policies at
achieve desired objectives.Agriculture impacts the environment through
water pollution, air pollution, and emissions of greenhouse gases among other ways.
Water and soil are assets that have value and net benefits associated with their use.
Government plays an active role in guiding and regulating the use of resources and impact on environment.
Introduction to Agricultural Economics, 5th edPenson, Capps, Rosson, and Woodward
© 2010 Pearson Higher Education,Upper Saddle River, NJ 07458. • All Rights
Reserved.
Chapter 11 discusses other forms of governmental intervention, including price and income supports…