The market model and its failure
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The market model and its failure book
This chapter illustrates how the market model, and its adaptations to include public goods and externalities, can be applied to the case of specific environmental resources. It considers frameworks that deal with the relationships between the objectives of economic growth and environmental quality. The intergenerational concern objective pervades issues that address the question of resource management over time. The objective is pertinent in the context of managing non-renewable as well as renewable resources. The economists’ approach to the management of resources over time, regardless of whether they are renewable or non-renewable, involves the application of what is called optimal control theory. Technology can also delay the onset of potential extinction of renewable resources. The policy measures for non-renewable resources will also be similar to those for renewable resources. However, some important and distinguishing issues need to be taken into account.