chapter  3
10 Pages

Accounting for the environment

One of the central activities in both environmental economics and sustainable development is the placement of proper values on the services provided by the natural environment. Many of these services currently are perceived as having a zero price simply because no marketplace exists in which their true values can be revealed through the commercial actions of buying and selling. Supply and demand theory indicates that if something is provided at a zero price then more of it will be demanded than if it had a positive price. The danger is that a greater level of demand for the environment will be more than natural systems can sustainably support.