Much of environmental change is driven by land use change. To some, the whole history of economic and social development reflects the exchange of one form of asset – ‘natural’ landscape – for another form of asset – man-made capital. Certainly, viewed from a global perspective, there is a one-to-one relationship between the decline of forested land and the increase in land devoted to crops and pasture. The factors giving rise to land use change are many and varied. But one of the most powerful is the comparative economic returns to ‘converted’ land relative to the economic returns to ‘natural’ land. In short, the issue is conservation versus conversion, and this is a conflict that is invariably resolved in the favour of conversion. This systematic erosion of the natural capital base is what worries environmentalists, a term I take to embrace anyone with the slightest modicum of concern about what humankind is doing to its own environment and its fellow species. Acting on that concern takes several forms, as everyone knows. Some want to lie down in front of the bulldozers, protest to their Members of Parliament, write to the newspapers, appeal to some moral principle or other. For the most part quietly, environmental economists have sought a different route. First, they observe that the bias towards conversion arises from all kinds of incentive systems, including, for example, subsidies to agriculture or monocultural forestry.