Glossary
Chapter 1: Changing Perspectives on the Environment

NO deletions in this chapter. Its all basic introductory concepts
A
asset(s) something with market value, including financial assets, physical assets, and natural assets.

B
biodiversity the maintenance of many different interrelated species in an ecological community.

C
carrying capacity the level of population and consumption sustainable by the available natural resource base.

circular flow a diagram that indicates the ways resources, such as goods, money, wastes, and energy, move through an economy or ecosystem.

common property resource(s) a resource not subject to private ownership and available to all, such as a public park or the oceans.

cost-benefit analysis (CBA) a tool for policy analysis that attempts to monetize all the costs and benefits of a proposed action to determine the net benefit.

D
discount rate the annual rate at which future benefits or costs are discounted relative to current benefits or costs.

E
ecological cycles the flow of energy and natural resources through ecosystems.

ecological economics an economic perspective that views the economic system as a subset of the broader ecosystem and subject to biophysical laws.

economic value/valuation the value of a good or service, expressed in monetary terms.

environmental macroeconomics an analysis that places the human economic system in an ecological context to balance the scale of the economic system within ecological constraints.

environmental microeconomics the use of microeconomic techniques such as economic valuation, property rights rules, and discounting to determine an efficient allocation of natural resources and environmental services.

environmental services ecosystem services such as nutrient cycling, water purification, and soil stabilization; these services benefit humans and support economic production.

external benefit(s) a benefit, not necessarily monetary, not reflected in a market transaction.

external cost(s) a cost, not necessarily monetary, not reflected in a market transaction.

externalities an effect of a market transaction on individuals or firms other than those involved in the transaction.

G
global environmental problems environmental problems with global impact, such as global climate change and species extinction.

I
internalizing externalities using approaches such as taxation to incorporate external costs and benefits into market decisions.

intertemporal resource allocation the way resource consumption is distributed over time.

M
macroeconomic (system) scale the total scale of an economy; ecological economics suggests that the ecosystem imposes scale limits on the macroeconomy.

N
nonrenewable resources resources available in fixed supply, such as metal ores and oil.

P
property rights the set of rights that belong to the resource owner, such as a landowner’s right to prohibit trespassing.

public good(s) goods available to all (nonexclusive), whose use by one person does not reduce their availability to others (nonrival).

R
renewable resource(s) resources supplied on a continuing basis by ecosystems; renewable resources such as forests and fisheries can be depleted through exploitation.

resource depletion a decline in resource stocks through human exploitation.

S
sink function the environment’s ability to absorb and render harmless the by-products of human activity.

solar energy the energy supplied continually by the sun, including direct solar energy as well as indirect forms such as wind energy and flowing water.

source function the environment’s ability to make services and raw materials available for human use.

sustainable development development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

T
third-party effects effects of market transactions that affect people other than those involved in the transaction, such as industrial pollution that affects a local community.

throughput the total use of energy and materials as both inputs and outputs of a process.