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Economic Theory and Environmental Degradation: A Survey of Some Problems

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Type: Journal Article
Author: Mäler, Karl-Göran
Journal: Revista de Analisis Economico
Volume: 5
Page(s): 7-17
Date: 1990
URI: https://hdl.handle.net/10535/7012
Sector: General & Multiple Resources
Subject(s): economic theory
environmental degradation
acid rain
policy analysis
Abstract: "Both market and policy failures can lead to environmental degradation. Considerable progress has been made in the area of project evaluation and the valuation of environmental effect. On the other hand the analytical tools to study the effects of policy failures -the impact of taxes, prices, exchange rate and incentives- are more limited. The correct handling of uncertainty also remains a major issue. The analysis of intemational environmental problems, such as acid rain or CO2 buildup, may benefit from the application of game theory approaches and the use of revelation mechanisism designed for public goods."

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