ABSTRACT
Economists like to proceed from a model framework to simplify reality and create a reference point for their specific analysis. For many years, however, the models used by mainstream economists tended to overlook the interactions between the economy and the environment. The benefits of economic activity were exaggerated and accounted for, while environmental costs were ignored. We introduced this major distinction when we discussed a product’s life cycle (from the ‘cradle’ to the ‘grave’) in Chapter 9. However, we have suggested that the environment cannot be ignored since it provides resources at the beginning of a product’s life cycle, and absorbs waste at the end of the cycle. This important strand of economic thinking began to gain credence in the 1960s, drawing an important dividing line between environmental and neoclassical economics (see Key Points 9.3).
