ABSTRACT
This chapter presents the general conceptual framework used in economics to approach environmental problems. It examines the relationship between human actions, as manifested through the economic system, and the environmental consequences of those actions. The law implies that the mass of materials flowing into the economic system from the environment has either to accumulate in the economic system or return to the environment as waste. Positive economics could be used to describe the kinds of impacts trade would have on the economy and the environment. The chief normative economic criterion for choosing among various outcomes occurring at the same point in time is called static efficiency, or merely efficiency. In economics, property rights refer to a bundle of entitlements defining the owner’s rights, privileges, and limitations for use of the resource. The level and concentration of economic activity has increased pollution problems and driven up the demand for clean air and pristine areas.
