Environmental Economics : A Critique of Benefit-Cost Analysis

Contents: Acknowledgements. I. Economics background - why economists like benefit cost analysis: 1. Introductory matters of logic and philosophy. 2. Why economists like market outcomes for ordinary goods. 3. Benefit-cost analysis when information is “perfect”: the role of time in environmental economic decisions. II. Missing markets: externalities, public goods, and property rights: 4. Externalities as missing markets. 5. Public goods as missing markets. 6. Property rights as a potential solution to environmental problems. III. Important theoretical problems with implementing benefit cost analysis: 7. The well-known “Demand revelation” problem out of a given income. 8. A less-well known “supply revelation” problem. IV. Practical problems with the implementation of benefit cost analysis: 9. Approaches to estimating the costs of environmental control policies. 10. Overview of approaches to the valuation of benefits of environmental policies. 11. Voting as a way to confer environmental benefits. 12. Constructed markets: stated preferences and experiments to infer environmental benefits. 13. The sum of specific damages approach. 14. Hedonic methods of valuing environmental amenities. 15. Travel cost method of valuing environmental amenities. 16. Political and jurisdictional problems. V. Epilogue. Index.

"For the past twenty-five years governmental decision makers have employed the economic approach of benefit-cost analysis for resource allocation decisions. Environmental Economics describes, in a nontechnical, readily understandable way, why the actual practice of benefit-cost analysis in environmental settings is heavily biased against the environment. The book provides environmentalists with the tools necessary to show policymakers that pursuing many policies with apparent costs greater than benefits is, in fact, welfare enhancing."