ABSTRACT
Environmental and natural resources economics applies economic theory to the often complex world of ecosystems. In this chapter, we describe several sources of complication, starting with the biology of renewable resources such as fish and forests. The first models are for a single species, then the considerable complexities of real ecosystems are introduced. Next, we discuss dynamics—that is, development that takes time, which has both ecological and economic consequences. In the last section, we introduce some of the complications that arise as a result of geographical space. Finally, although many applications in this area concern natural resources, the theory applies equally to stock pollutants. Many chemicals are persistent and accumulate in the environment through various mechanisms. The capacity of an ecosystem to function despite an increasing stock of a certain pollutant may be limited, and all the economic models of how to “harvest” or “mine” a natural resource stock are equally applicable to the use of the assimilative capacity of the ecosystem with respect to stock pollutants (see Chapter 14).
