The Economics of Natural Environments: Studies in the Valuation of Commodity and Amenity Resources

By John V. Krutilla; Anthony C. Fisher | Go to book overview

asymmetry argument. Since the services of the natural environment are gifts of nature not producible by man, we cannot look to specific gains in productive efficiency to augment the stock of amenity-related resources such as the Hells Canyon. However, since complementary goods and services are producible, and particularly since the amenity services are income elastic--then with general technological progress increasing productivity and, hence, income per capita, we can anticipate a growing demand for a fixed stock of amenity-supporting natural environments. This leads to expected increases in the value of the services of such natural assets as the Hells Canyon when retained in its natural condition.

There will be other environmental cases in which more of the unevaluatable benefits will have to be assessed in order to reach a decision, and as time and experience with such problems is gained, analysis may be relied on to play an important role in a larger number of cases. It is important to note, however, that careful analysis using relevant concepts can be useful in a variety of cases without pretending to be capable of valuing all attributes of natural phenomena.


Authors' Note

Since the analysis of the Hells Canyon alternatives was prepared in 1969, the more recent gyrations in the market for energy commodities might well raise a question as to the continuing validity of our analysis. Several points should be made to assist in evaluating the final results.

First, it should be borne in mind that the thermal alternative determined to be the most economic by methods employed by the Bureau of Power of the Federal Power Commission was nuclear rather than fossil fueled; the market for only the latter of these has been in an uncertain condition. Even so, it is not clear that a fossil fuel alternative was not in fact, and does not remain, a lesser cost thermal alternative. The Bureau of Power's evaluative procedures incorporate the taxes that utilities pay as part of the cost of the energy from any given source. A Montana-based operation utilizing the thick-seamed strippable coal in eastern Montana would be charged with a percentage of taxes on investment reflected in the taxes paid by the Montana Power Company. It develops that, owing to the favorable treatment the Montana Power Company receives from the state public utilities commission in figuring its rate base, it earns very large profits as determined by the Internal Revenue Service and thus pays in federal income taxes about 85 percent more per dollar of investment than the weighted average of all utilities. Accordingly, what the peculiarities of the FPC evaluation practice produce is a result that reckons a half of the excessive profits of the company as a cost of producing thermal electric power from Montana energy sources.

Were the evaluation to be conducted on a conceptually more adequate basis, it is likely that stripmined eastern Montana coal would represent the lowest cost thermal alternative. And, given the impressive economy of mining very

-143-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this book

This book has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this book

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited page

Bookmark this page
The Economics of Natural Environments: Studies in the Valuation of Commodity and Amenity Resources
Table of contents

Table of contents

Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen
/ 302

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.