The large box in the center of Figure 1 represents the production in the economy of both
valued goods and services and the inherent co-production of wastes. In this framework, "waste"
is not a purely physical concept (based for example on materials balance – what goes in must
come out). We conceive of waste as flows that reduce environmental quality as broadly defined
below. As shown in Figure 1, production of goods depends on (a) flows of capital services (and
associated labor services), (b) flows of extracted natural materials (biological and geological,
renewable and depletable), and (c) environmental services provided by natural systems. The
volume of wastes released to the environment depends on the volume of material output and on
the flow of services derived from another form of investment by society, that which is applied to
manage the byproducts of production generated within the economic system. We use the
shorthand "byproducts management capital" to summarize these services. Byproducts
management refers both to pollution prevention (reduction in unwanted harmful byproducts
relative to desired goods), and to end-of-pipe treatment that reduces the damage caused by
physical discharges.
The large box in the center of Figure 1 represents the production in the economy of bothvalued goods and services and the inherent co-production of wastes. In this framework, "waste"is not a purely physical concept (based for example on materials balance – what goes in mustcome out). We conceive of waste as flows that reduce environmental quality as broadly definedbelow. As shown in Figure 1, production of goods depends on (a) flows of capital services (andassociated labor services), (b) flows of extracted natural materials (biological and geological,renewable and depletable), and (c) environmental services provided by natural systems. Thevolume of wastes released to the environment depends on the volume of material output and onthe flow of services derived from another form of investment by society, that which is applied tomanage the byproducts of production generated within the economic system. We use theshorthand "byproducts management capital" to summarize these services. Byproductsmanagement refers both to pollution prevention (reduction in unwanted harmful byproductsrelative to desired goods), and to end-of-pipe treatment that reduces the damage caused byphysical discharges.
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