Production, Consumption, and Externalities
- ISSN: 00028282
- DOI: 10.1007/s00148-005-0038-7
- PubMed: 17746758
Abstract
This article argues that the production of residuals is an inherent and general part of the production and consumption process and, moreover, that there are important trade-offs between the gaseous, liquid, or solid forms that these residuals may take. The article also argues that under conditions of intensive economic and population development the environmental media which can receive and assimilate residual wastes are not free goods but natural resources of great value with respect to which voluntary exchange cannot operate because of their common property characteristics. It is also noted, in passing, that the assimilative capacity of environmental media can sometimes be altered and that therefore the problem of achieving economist Vilfredo Pareto optimality reaches beyond devising appropriate shadow prices and involves the planning and execution of investments with public goods aspects. A formal mathematical framework has been exhibited for tracing residuals flows in the economy and related it to the general equilibrium model of resources allocation, altered to accommodate recycle and containing unpriced sectors to represent the environment.
Production, Consumption, and Externalities
Production, Consumption, and Externalities
Author(s): Robert U. Ayres and Allen V. Kneese
Source: The American Economic Review, Vol. 59, No. 3 (Jun., 1969), pp. 282-297
Published by: American Economic Association
Stable URL: http://www.jstor.org/stable/1808958 .
Accessed: 19/04/2011 16:02
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