THE ENVIRONMENT IN ECONOMICS: A SURVEY

A review is made of the economic literature relating to the environment. There are two main areas of focus, one being the alternate uses of natural environments and the other environmental pollution. Considering the former area, the concern has been to put natural environments to their best extracting or amenity uses. The economic literature touches on several issues, including the irreversibility once the natural environment has been converted, and the uncertainty of future demand and its option value. The authors suggest that while problems in valuing the resources of an unspoiled natural environment remain, the benefit-cost analysis useful to a decision on whether to reserve the environment from development need not wait for their complete resolution. Considering environmental pollution, the literature review begins with the partial equilibrium analysis of Pigou and moves on the a number of recent challenges to the analysis, especially to its major policy implication, the corrective tax. These are discussed under two headings: (1) the relative merits of taxes, subsidies, and standards, and (2) the relationship of pollution externality to nonconvexity and implications of the relationship for tax and other control policies. A discussion is then made of general equilibrium and dynamic models of pollution generation, which most likely have been stimulated by the materials balance view of pollution as pervasive and persistent. Finally, the problems in the literature on measurement of pollution damages and abatement costs are considered.

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  • Corporate Authors:

    American Economic Association

    Curtis Reed Plaza
    Menasha, WI  USA  54952
  • Authors:
    • Fisher, A C
    • Peterson, F M
  • Publication Date: 1976-3

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Filing Info

  • Accession Number: 00131662
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Jun 5 1976 12:00AM