That other people place different values upon the environment than I do worries me not in the slightest. It is precisely such differences of opinions about value that make a market. What does annoy me intensely is that almost all of the environmental problems that are currently being complained about have indeed been studied by economists. And they’ve found solutions to them as well. Just about any and every environmental problem is either about externalities or common access to a resource. In many ways these are just the flip side of exactly the same problem. But we do indeed know how to solve each of them and both of them. Hardin on ownership or regulation, Pigou on tax or regulation, both mediated through Coase on transactions costs (with a decent assit from Ostrom on communal ownership). There, that’s it: far from economics ignoring matters environmental economics has solved the damn problems.
So why won’t the environmentalists listen?
Tim Worstall, “Why won’t the environmentalists learn any economics?”, Adam Smith Institute blog, 2012-10-21.
October 21, 2012
QotD: Environmental externalities
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