Theoretical frontiers of environmental economics

Abstract

Environmental economics was the subject of a comprehensive research programme in the 1960s and 1970s. This programme dealt with a wide range of issues and policy problems, such as the economics of natural resources, the methods and problems in the correction of externalities, the management of common property goods, the economics of nature preservation. Against this background, suitable analytical tools were provided by the theory of non-renewable and renewable resources; the theory of missing markets; Pigovian taxation and the theory of property rights; the economics of public goods; welfare economics. All in all, the research programme was very successful and in the following decade it gave rise to several textbooks, from Baumol and Oates (1975) to Siebert (1987), Pearce and Turner (1990). At the beginning of the 1990s, no less Partha Dasgupta (1990) was claiming that environmental issues were ‘very cold’ as topics for analytical investigation and ‘dead’ as research problems.