pA clear grasp of economics is essential to understanding why environmental problems arise and how we can address them. So it is with good reason thatnbsp;iMarkets and the Environment/inbsp;has become a classic text in environmental studies since its first publication in 2007. Now thoroughly revised with updated information on current environmental policy and real-world examples of market-based instruments, the primer is more relevant than ever.br /
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The authors provide a concise yet thorough introduction to the economic theory of environmental policy and natural resource management. They begin with an overview of environmental economics before exploring topics including cost-benefit analysis, market failures and successes, and economic growth and sustainability.nbsp;Readers of the first edition will notice new analysis of cost estimation as well as specific market instruments, including municipal water pricing and waste disposal. Particular attention is paid to behavioral economics and cap-and-trade programs for carbon.br /
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Throughout,nbsp;iMarkets and the Environment/inbsp;is written in an accessible, student-friendly style. It includes study questions for each chapter, as well as clear figures and relatable text boxes. The authors have long understood the need for a book to bridge the gap between short articles on environmental economics and tomes filled with complex algebra.nbsp;iMarkets and the Environment/inbsp;makes clear how economics influences policy, the world around us, and our own lives./p
pIn the early twenty-first century, China produced 97% of the worldrsquo;s rare earth elements (REE), and Japan held key intellectual property for intermediate products made from REE. Many high-tech products use REE, including U.S. defense systems and green technologies like wind turbines. Because of REErsquo;s extreme supplier concentration and the wide acceptance that REE are important to ldquo;strategicrdquo; products, many politicians and pundits feared that the United States was vulnerable in international affairs. However, market forces (not policy initiatives) quickly corrected the vulnerability. This case suggests that even best case situations for economic coercion may offer only fleeting leverage in international politics. The crisis in rare earths was not the first resource panic, nor will it be the last. The successful market-led response offers a positive lesson for policy-makers considering how to react to fears of vulnerable resource supplies in the modern era of globalization: government is not alone in responding to risk, and often private firms, acting in their own interests, offer a relatively nimble solution to vulnerability./p
pIn the past decade, innovations in hydraulic fracturing and horizontal drilling have fueled a boom in the production of natural gas (as well as oil) from geological formationsmdash;primarily deep shalesmdash;in which hydrocarbon production was previously unprofitable. Impacts on US fossil fuel production and the US economy more broadly have been transformative, even in the first decade. The boom has been accompanied by concerns about negative externalities, including impacts to air, water, and quality of life in producing regions. We describe the economic benefits of the shale gas boom, including direct market impacts and positive externalities, providing back-of-the-envelope estimates of their magnitude. The paper also summarizes the current science and economics literatures on negative externalities. We conclude that the likely scope of economic benefits is extraordinarily large, and that continued research on the magnitude of negative externalities is necessary to inform risk-mitigating policies./p
pBooming production of oil and gas from shale, enabled by hydraulic fracturing technology, has led to tension between hoped-for economic benefits and feared environmental and other costs, with great associated controversy. Study of how policy can best react to these challenges and how it can balance risk and reward has focused on prescriptive regulatory responses and, to a somewhat lesser extent, voluntary industry best practices. While there is undoubtedly room for improved regulation, innovative tools are relatively understudied. The liability system predates environmental regulation yet still plays an importantmdash;and in some senses predominantmdash;role. Changes to that system, including burden-shifting rules and increased bond requirements, might improve outcomes. Similarly, new regulation can and should incorporate modern understanding of the benefits of market-based approaches. Information disclosure requirements can benefit the liability system and have independent benefits of their own. Policymakers faced with a need for policy change in reaction to shale development should carefully consider alternatives to regulation and, when regulation is deemed necessary, consider which tool is best suited./p
pThis paper examines whether countries consider the welfare of other nations when they make water development decisions. We estimate econometric models of the location of major dams around the world as a function of the degree of international sharing of rivers. We find that dams are more prevalent in areas of river basins some distance upstream of foreign countries, supporting the view that countries free ride in exploiting water resources. We find some evidence that international institutions, in particular multinational financing and international water management treaties, may mitigate this free riding./p