141
2. GHG emissions from fossil fuel-based power generation.
3. Pollutants entering aquifers associated with infiltration of produced fracking
water.
Non-market valuation is often applied to value externality effects as discussed
(see Chaps. 4 and 5).
A related concept is maladaptation where Nexus actions that meet the needs of
one sector increase the vulnerability of sectors elsewhere or in the future. This is an
important issue recognized in climate change adaptation literature (see Barnett and
O’Neill 2010). Examples of maladaptation include: diverting floodwaters away
from a city may result in flooding of other citizens along the path of diversion canal;
and extensive use of groundwater today depletes the resource so that it cannot be
used in the future.
In dealing with negative externalities economists often state that the externality
should be internalized. There are many ways of doing this including some of the
incentives below:
1. Assignment of property rights, such as allocating grazing use permits on federal
lands providing an incentive for those using land for grazing to avoid
overgrazing.
2. Instituting markets for rights to pollute (commonly called cap and trade. For
example, one can reduce GHG emissions below current levels by allocating
rights to emit but than allowing the purchase and sale of those rights).
3. Imposing performance standards like the use of denitrification inhibitors or the
institution of a Renewable Fuel Standard which requires certain volumes of
renewable fuel.
4. Providing subsidies for equipment that reduces the negative impact, for example,
lowering the cost of precision agriculture equipment to reduce nitrogen runoff,
or lowering existing subsidies to fossil fuel production to increase price and
lower consumption reducing air pollution and greenhouse gas emission
externalities.
In doing this, one must be careful about adopting strategies with minimum
implementation—transaction costs, as the magnitude of such costs, have caused
some schemes to fail (Stavins 1995; Tietenberg 2003).
Externalities are critical concepts in the Nexus arena. Hoff (2011) argues Nexus
thinking is concerned with addressing externalities across multiple sectors, decreasing adverse effects of some sectoral actions on others with a focus on system efficiency rather than on the productivity of individual sectors.
5.3.2 Income Distribution and Inequality Effects
The Nexus also needs to be contextualized within the debate around social justice.
Food/water poverty indicate the presence of a strong relationship between levels of
poverty and levels of resource consumption—with resource consumption and
resource availability decreasing as poverty indices increase.
5 Economics
2. GHG emissions from fossil fuel-based power generation.
3. Pollutants entering aquifers associated with infiltration of produced fracking
water.
Non-market valuation is often applied to value externality effects as discussed
(see Chaps. 4 and 5).
A related concept is maladaptation where Nexus actions that meet the needs of
one sector increase the vulnerability of sectors elsewhere or in the future. This is an
important issue recognized in climate change adaptation literature (see Barnett and
O’Neill 2010). Examples of maladaptation include: diverting floodwaters away
from a city may result in flooding of other citizens along the path of diversion canal;
and extensive use of groundwater today depletes the resource so that it cannot be
used in the future.
In dealing with negative externalities economists often state that the externality
should be internalized. There are many ways of doing this including some of the
incentives below:
1. Assignment of property rights, such as allocating grazing use permits on federal
lands providing an incentive for those using land for grazing to avoid
overgrazing.
2. Instituting markets for rights to pollute (commonly called cap and trade. For
example, one can reduce GHG emissions below current levels by allocating
rights to emit but than allowing the purchase and sale of those rights).
3. Imposing performance standards like the use of denitrification inhibitors or the
institution of a Renewable Fuel Standard which requires certain volumes of
renewable fuel.
4. Providing subsidies for equipment that reduces the negative impact, for example,
lowering the cost of precision agriculture equipment to reduce nitrogen runoff,
or lowering existing subsidies to fossil fuel production to increase price and
lower consumption reducing air pollution and greenhouse gas emission
externalities.
In doing this, one must be careful about adopting strategies with minimum
implementation—transaction costs, as the magnitude of such costs, have caused
some schemes to fail (Stavins 1995; Tietenberg 2003).
Externalities are critical concepts in the Nexus arena. Hoff (2011) argues Nexus
thinking is concerned with addressing externalities across multiple sectors, decreasing adverse effects of some sectoral actions on others with a focus on system efficiency rather than on the productivity of individual sectors.
5.3.2 Income Distribution and Inequality Effects
The Nexus also needs to be contextualized within the debate around social justice.
Food/water poverty indicate the presence of a strong relationship between levels of
poverty and levels of resource consumption—with resource consumption and
resource availability decreasing as poverty indices increase.
5 Economics