The current orthodoxy in environmental economics: A review and a challenge

Abstract

Perhaps the most noticeable feature in the burgeoning literature devoted to environmental economics has been the primacy of the neo-classical model (or what is often referred to as the "market solution"). This strategy, embodying individual property rights and the use of the private discount rate, assumes that market signals will elicit satisfactory solutions to the problems of excessive resource depletion and pollution. It has been argued, however, that methodological problems have undermined the feasibility of the orthodox approach to environmental economics. Furthermore, it has been suggested that this approach is fundamentally anthropocentric in character and therefore unsuited to resolving problems which are seen to be essentially ecological in character. Accordingly, this paper seeks to review the neo-classical model of environmental economics and outlines the challenges posed by the alternative strategies of sustainable development and ecological economics, as well as some of the conceptual problems which still remain to be resolved.