Economic Theory for Environmentalists: 1st Edition (Hardback) book cover

Economic Theory for Environmentalists

1st Edition

By John Gowdy, Sabine U O'Hara

CRC Press

208 pages

Purchasing Options:$ = USD
Hardback: 9781574440034
pub: 1995-05-30

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Economic Theory for Environmentalists is a much-needed and heralded new book that examines the implications of neoclassical economic theory and how it relates to the environment and environmental activity. It addresses the ongoing conflict between market forces and environmental integrity and explains how neoclassical economic theory views the relationship between economic activity and the natural world.

Each chapter outlines the concepts of economic theory and the relevance of its environmental and policy implications. It focuses on both micro and macro-economics. Policy tools such as price and income elasticities, consumer surplus and methods for measuring the economic value of environmental resources are discussed. A case study which examines a range of policy options is presented. Examples are also given throughout the text to illustrate regional and international policy questions.

Presented in a simple and easy to understand manner, this valuable book is suited for anyone dealing with environmental, economic, or policy issues.


"I have read the first six chapters of the book and found them to be a well written and easy to follow exposition and critique of neoclassical environmental economics. I agree with the authors that environmentalists indeed need to understand neoclassical economics because it is often used against them in their pursuit of improved environmental quality, and it can be used in their favor when presented properly. I believe there is a need for such a book…"

-Douglas E. Booth, College of Business Administration, Marquette University, Milwaukee

"This well-written book is an important contribution to the dialogue between environmental scientists and economists."

John H. Cumberland, University of Maryland

"This book is succinct and very readable."

-Growth and Change, Summer 1995

Table of Contents


Markets and Models: The Circular Flow of Economic Activity

Economic Efficiency and Pareto Optimality

The Context of Market Exchange

Economics and the Biophysical World

What This Book Does and Does Not Do

Suggestions for Further Reading

The Theory of the Consumer


The Indifference Curve

The Edgeworth Box Diagram

Pareto Optimality in Exchange

Consumer Theory and the Biophysical World

Models and Reality


Suggestions for Further Reading

The Theory of the Firm


The Isoquant

The Edgeworth Box Diagram for Production

The Production Possibilities Frontier

Production Theory and the Biophysical World


Appendix-A Digression on Functional Form

Suggestions for Further Reading

General Equilibrium and Welfare Economics


General Equilibrium in Exchange

The Social Welfare Function

General Equilibrium Theory and the Biophysical World

Social Welfare and Ethics

Beyond Human Welfare


Suggestions for Further Reading

Introducing Prices: Pareto Optimality & Perfect Competition


Prices in Consumption: The Budget Constraint

The Demand Curve

Prices in Production: The Cost Constraint

The Supply Curve

The Model of Perfect Competition

Efficiency in Resource Use: Long-Run Competitive Equilibrium

Perfect Competition and Pareto Optimality

Prices and the Biophysical World


Suggestions for Further Reading

Market Failure: When Prices Are Wrong


Imperfect Market Structures

Public Goods


Solutions to the Externality Problem-Coase Versus Pigou

Elasticities-Measuring Policy Effectiveness

Consumer Surplus-Who Pays for Intervention?

Intervention Failure

Existence Failure


Suggestions for Further Reading

From Supply and Demand to Social and Ecological Context


Before the Classical Economists

The Classical Economists

The Marginalist Revolution and the Mathematical Foundations of Neoclassical Economics

The Battle Lines Are Drawn: John Maynard Keynes and the General Theory

The Neoclassical Synthesis

Revolution and Counterrevolution: The End of Consensus

New Directions in Economic Theory and Policy:

Ecological Economics



Suggestions for Further Reading

The Challenge of Pollution Control: Groundwater Pollution


Determining the Source of Pollution

The Efficiency Standard

Market Prices Versus Shadow Prices

Determining the Pollution Optimum

The "Second Best" Approach

The Policy Question-How Do We Enforce Pollution Standards?

Safe Minimum Standard Options


Suggested Readings

New Directions for Economics, the Economy, and the Environment

Taking Stock of Where We Are

Economic Decision-Making and the Biophysical World

Economic Decision-Making and Human Culture

Decision Under Uncertainty

Where Do We Go From Here?

Suggested Reading


Subject Categories

BISAC Subject Codes/Headings:
LAW / Environmental
SCIENCE / Life Sciences / Ecology