In what ways might evaluating the benefits of abatement be difficult?
There are a lot of uncertainties in regard to the market such as missing markets, unknown long-term impacts, or the value of preserving different resources. All of these factors make it difficult to place a value on abatement benefits, so different methods of valuation have been created to do so.

How will we use contingent valuation to examine the benefits of abatement?
Contingent valuation, a stated preference approach, relies on surveying people on their opinions regarding the value of abatement. An example of contingent valuation being applied would be a study estimating the lost value caused by the Exxon Valdez oil spill by asking surveyees how much they were willing to pay to prevent another oil spill.

How will we use hedonic pricing to examine the benefits of abatement?

Hedonic pricing, a revealed preference approach, relies on analysis of people’s economic behavior to determine the value of abatement. An example of hedonic pricing being used would be when UK researchers found that housing prices dropped by 7% if they were within a quarter of a mile from a landfill site.

How does green growth accounting view the environment?
Green growth accounting views the environment as an asset that society needs to produce goods and services, and just like an asset, the environment can be used up. As a result, environmental degradation is viewed as something that depreciates society’s assets.

What role does natural capital play in a nation’s wealth?
While many countries may demonstrate a high level of economic growth on the surface, the loss of natural capital induced by the growth is often overlooked. An example of this would be Indonesia’s timber boom, where after factoring in deforestation, oil depletion, and soil erosion, the country’s average annual rate of growth of income was revealed to be about 4% compared to the reported 7.1%. The amount of loss can be calculated by taking the cost per year to replace lost natural capital and subtracting the annual GDP.

What are some opposing philosophies people have towards environmental quality?
On one hand, people may believe a good environment is a right everyone is entitled to, making it a merit good. On the other hand, people may also believe that the quality of the environment is only as good as the quality of goods one consumes, on how much you are willing to pay for it; this perspective illustrates the willingness to pay model.

What are the pros and cons of the willingness-to-pay model? A major flaw in the WTP model is that it implies that lower socioeconomic place less value on the environment due to their limited ability to pay for other things. Consequently, policies made using WTP to predict abatement benefits tend to favor the rich over the poor. However, the WTP model’s usage of information on people’s valuation of the environment serves as a benefit as it allows us to consider how much we invest in environmental quality.

Hedonic pricing: using economic behavior to determine estimated price of good
Contingent valuation: assessing value of good through survey
Depreciation: loss of value
Green adjustment: factoring in the value of natural resources
Merit good: goods everyone is entitled to

Evaluating the benefits of abatement can be challenging due to various uncertainties in the market, such as missing markets, unknown long-term impacts, and the subjective value of preserving different resources. Different methods of valuation have been developed to address these difficulties. Contingent valuation, a stated preference approach, is used to examine the benefits of abatement by surveying individuals about their opinions on the value of abatement. For example, a study may estimate the value of preventing another oil spill by asking people how much they are willing to pay for such prevention. Hedonic pricing, a revealed preference approach, analyzes people's economic behavior to determine the value of abatement. It examines how changes in environmental quality affect market prices. For instance, researchers in the UK found that housing prices dropped by 7% if they were located within a quarter of a mile from a landfill site, indicating the negative impact of proximity to the site. Green growth accounting considers the environment as an asset necessary for the production of goods and services. Environmental degradation is viewed as the depreciation of society's assets, highlighting the need to account for the environment in economic analysis. Natural capital, which refers to the stock of natural resources and ecosystems, plays a crucial role in a nation's wealth. While economic growth may appear high, the depletion of natural capital is often overlooked. For example, Indonesia's reported economic growth rate was 7.1%, but considering factors like deforestation and oil depletion, the actual rate of income growth was estimated to be around 4%. Opposing philosophies towards environmental quality include the belief that a good environment is a right entitled to everyone (merit good) and the perspective that environmental quality depends on the quality of goods consumed and the willingness to pay for it (willingness-to-pay model). The willingness-to-pay (WTP) model has pros and cons. One flaw is that it suggests that individuals with lower socioeconomic status value the environment less due to their limited ability to pay for other things, leading to policies that favor the rich. However, the WTP model's benefit lies in its ability to provide information on people's valuation of the environment, allowing for consideration of investment in environmental quality.

Similar to how some people view a clean environment as a merit right, some people view healthcare as a universal right that should be free for all citizens