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Engineering LibreTexts

7: Environmental and Resource Economics

  • Page ID
    12045
    • 7.1: Environmental and Resource Economics - Chapter Introduction
      The field of environmental and natural resource economics sounds to many like an oxymoron. Most people think economists study money, finance, and business—so what does that have to do with the environment? Economics is really broadly defined as the study of the allocation of scarce resources.
    • 7.2: Tragedy of the Commons
      To identify and solve environmental problems, we need to understand what situations are actually problems (somehow formally defined) and what circumstances and behaviors cause them. We might think that it is easy to recognize a problem—pollution is bad, saving natural resources is good. However, critical thinking often reveals snap judgments to be overly simplistic. Some examples help to illustrate this point.
    • 7.3: Case Study: Marine Fisheries
      Fisheries are classic common-pool resources. The details of the legal institutions that govern access to fisheries vary around the globe. However, the physical nature of marine fisheries makes them prone to overexploitation. Anyone with a boat and some gear can enter the ocean.
    • 7.4: Environmental Valuation
      Externality, public good, and common-pool resource problems yield suboptimal levels of environmental quality and excessive rates of resource exploitation. Many factors complicate the process of deciding what to do about these problems. One is that environmental goods are not traded in any marketplace, and hence analysts struggle to identify quantitative measures of their values to society.
    • 7.5: Evaluating Projects and Policies
      Environmental valuation methods help analysts to evaluate the benefits society would gain from policies or cleanup and restoration projects that improve environmental quality or better steward our natural resources. Another set of tools can yield information about the costs of such actions (a brief description is below).
    • 7.6: Solutions: Property Rights, Regulations, and Incentive Policies
      Governments have implemented many policies to solve problems with environmental quality and natural resource depletion. Every policy is unique and deserves detailed individual analysis in the policymaking process—the devil is always in the details. However, economists have developed a taxonomy of policy types.