In recent years, ‘environmental economics’ has provided the dominant logic underpinning policies for ‘sustainable development’ in the form of government managed price-based and rights-based mechanisms. The advocacy of property rights in environmental management is taken further in the libertarian ‘free market’ approach and this ‘privatisation’ perspective is reflected in the growing use of property rights instruments in climate change policy. This article examines the efficacy of using economic instruments in the environmental context where ‘market ecology’ promotes the commodification of environmental ‘goods’ and ‘bads’ and their management by market forces. It argues that the pricing of ‘nature’ or its useful properties is a crude abstraction that implies ecological values can be alienated, but this is incompatible with the material and relational qualities of such values. The limits of this conceptualisation are further demonstrated through an examination of the Kyoto Protocol’s Clean Development Mechanism (CDM), a price and property rights instrument which enables private project developers in developing countries to produce carbon credits in order to offset greenhouse gas pollution in developed countries. The evident negative social and environmental effects flowing from implementation of the CDM reinforce the limitations of economic logic in the environmental context.

Three common misconceptions persist about federal regulations. The first misconception is that most new regulations concern the environment, but in fact, only a small minority of regulatory flows are environmental. The second misconception is that regulators offer reasonable justifications and quantitative evidence for the majority of regulations. However, quantitative estimates rarely appear in published rules, negating the impression given by executive orders and Office of Management and Budget guidance, which require cost-benefit analysis (CBA) and clearly articulate sound economic principles for conducting CBA. Environmental rules have relatively higher-quality CBAs, at least by the standards of other federal rules. The third misconception, which is particularly relevant to the historic regulations promulgated during the COVID-19 pandemic, is that regulatory costs are primarily clerical, rather than opportunity or resource costs.

We measure how taking into account air quality affects relative welfare levels and welfare convergence across countries. We use the equivalent variation framework by Jones and Klenow [(2016) American Economic Review 106(9), 2426–2457.] which takes into account consumption, life expectancy, inequality, and leisure and extend it with respect to environmental quality in form of air pollution. Our results show that omitting environmental aspects from welfare accounting might lead to both a substantial over- or understatement of actual relative welfare and welfare developments for different (groups of) countries.

This paper seeks to understand the link between resource governance and investor expectations in resource-rich countries. We test whether voluntary membership in the Extractive Industries Transparency Initiative (EITI), a public-private partnership that promotes transparency and accountability in the extractives sector, behaves as a credible signalling mechanism to investors that governments in resource-rich countries can manage resource revenue and adhere to sustainable fiscal policies in the medium and long run. Using an interrupted time series analysis coupled with a fixed effects model, we examine whether investor expectations on the price of sovereign debt behave as a credible signalling mechanism in the presence of certain conditions. Results indicate that in some cases there is a significant change in spread on the default price of sovereign debt as a result of announcement of either EITI candidacy or EITI compliance. However, it is clear that EITI membership alone is not a sufficient signal to investors that a country can effectively manage its resource revenues in the long run because the result of EITI implementation is heavily influenced by country-specific conditions.

In our opinion, the challenges of ongoing measurement, the ever-moving behavioral baseline, and strategic self-ignorance return us full-circle to a sensible point made by Peter Bohm–Benefit-Cost Analysis for environmental goods should use an interval method.

Federal legislation mandates substantial reduction of air pollution emissions from electric utilities. Utilities in Appalachia that use locally mined high-sulfur coal must choose among abatement options such as fuel mixing and smokestack scrubbing technologies. Wet scrubbers are the most frequently adopted abatement technology in Ohio. This paper investigates beneficial reuses of by-product from wet scrubbers. By-product is most often disposed of in landfills, resulting in large external costs. We combine social cost and benefit transfers with a linear optimization model to investigate potential benefits of by-product recycling. Results suggest that significant incentives exist to find beneficial uses for by-product.

Benefit-cost analysis is required for many regulatory decisions in the United States and in other countries. In this paper, I examine a standard textbook model that is used in benefit-cost analysis as it is actually applied to environmental policy and other areas of regulation. My primary objective is to suggest how including some key factors in the analysis could promote the development of smarter regulation.I begin by presenting a standard economic model for government intervention in markets, which balances benefits and a narrow definition of costs. I then introduce a richer normative theory that considers several political and economic costs that are frequently not considered in analyzing real-world applications. Examples include costs associated with rent seeking, design and implementation, and raising revenues. The richer theory suggests that the government should supply less of a good, or ask the private sector to provide less of that good, than the standard economic model suggests. The reason is that intervening in markets is often more costly than the standard model assumes. In special cases, the theory provides guidance on the setting of socially optimal taxes and subsidies. I then explore how the theory needs to be modified in the presence of biased estimates of benefits and costs. I conclude with a discussion of how the theoretical framework can be applied to the actual design of regulatory policy.

This paper reviews developments in both environmental economics and ecological economics with respect to their progress towards environmental interdisciplinarity and towards providing solutions to environmental problems. The concepts, methods, theories and assumptions of each field of knowledge are reviewed and the extent to which they depart from the dominant neoclassical paradigm of economics is assessed. The contribution that interdisciplinarity has made to the success of each field is analysed in terms of understanding, influence and effectiveness and the constraints that it has imposed upon that success. Environmental economics has adopted the dominant economic neoclassical paradigm, including the power of the market to allocate environmental resources efficiently and in a socially optimal way. The solution to environmental problems is thus seen as a matter of ensuring that the environment is properly priced to reflect the relative scarcity of natural resources and assets and to ensure that environmental values are incorporated into the market. This specialized view of environmental problems is now reflected in government policy around the world including the use of extended cost benefit analyses, contingent valuations, environmental charges and emissions trading. Nevertheless, environmental problems continue to grow in severity and the solutions provided by environmental economists have proven ineffective. Thus lack of interdisciplinarity does not prevent a field of knowledge from gaining influence and dominance, however its effectiveness in terms of understanding environmental problems and solving them is impeded. Ecological economics seeks to incorporate the research of economists, ecologists, philosophers and social scientists, however its influence seems to be have been limited to areas in which it retains the standard economics framework, and this limits its effectiveness in terms of environmental solutions. Thus interdisciplinarity may increase understanding of the real world but it cannot overcome political and social barriers to translating that understanding into the widespread implementation of effective environmental measures.

Increasing demand for cooking oil and biofuels has made palm oil, > 80% of which is grown in South-east Asia, the dominant globally traded vegetable oil. However, this region is host to some of the world’s most biodiverse and threatened tropical forests. Strategic engagement with commercial operations is increasingly recognized to be an essential part of the solution for raising funds for conservation initiatives, raising consumer consciousness and potentially stemming environmental degradation. Linking market incentives towards conservation is also of critical importance because it is becoming widely recognized that conservation needs to begin to address the wider countryside (outside protected areas) where human–wildlife interactions are frequent and impacts are large. Using the Sumatran tiger Panthera tigris sumatrae as both a threatened species in its own right and emblematic for wider species diversity, we show that western consumers are willing to pay a significant premium for products using palm oil grown in a manner that reduces impacts on such species. Results suggest that the price premium associated with a ‘tiger-friendly’ accreditation may provide a useful additional tool to raise conservation funds and, within the right institutional context, serve as an inducement to address the problem of habitat and species loss.