ABSTRACT
ONE OF THE GREAT STRENGTHS and weaknesses of environmental economics is its emergence from neoclassical economics—a discipline that grew and thrived in an era largely unaware of and unconcerned about environmental issues. Figure 6–1, familiar to all first-year economics students, captures the essence of the neoclassical economic model of the economy. It is basically a closed system with mutual exchanges between firms and households. Consumers provide their labor to producers, and they, in turn, sell the resulting goods back to consumers. As illustrated in Figure 6–2, environmental economics made a major addition to this model by adding another entity to this simple flowchart: the environment, which sits principally beside the producer’s side and represents the repository for the waste generated by the industrial system of production. Table 6–1 lists the principal types of pollutants that have been the common focus of environmental economics. The goal is to internalize externalities in order to reduce economic inefficiency from a social perspective. The overall goal of maximizing economic growth to increase human welfare remains the central thrust. This is fundamentally neoclassical economics with minor modifications. Neoclassical economic model https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9780203107478/c2bc82bb-d1e1-4a9f-b07e-484744df4bd9/content/fig6_1_C.jpg" xmlns:xlink="https://www.w3.org/1999/xlink"/> The environmental economics model https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9780203107478/c2bc82bb-d1e1-4a9f-b07e-484744df4bd9/content/fig6_2_C.jpg" xmlns:xlink="https://www.w3.org/1999/xlink"/> Some Typical Pollutants Considered in Environmental Economics https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">
Local
Regional
Global
AIR
smoke/particulates
photochemical smog
greenhouse gases (recently)
noxious odours
acid rain
ozone depletion (recently)
pesticide deposition
pesticide deposition
heavy metal deposition
heavy metal deposition
WATER
oil spills
airborne deposition of pesticides & heavy metals
oil contamination
sewage discharge
petroleum pollution
pesticide runoff
forest runoff
fertilizer runoff
urban runoff
heavy metal discharges
agricultural runoff
suspended solids
BOD
SOIL
toxic contamination
erosion
loss of fertility from erosion & overuse of fertilizer
municipal solid waste
salinization
RADIATION
localized waste storage
contamination from nuclear accidents
contamination from nuclear accidents
contamination from nuclear accidents
