The economy and the environment

in Environmental Economics

Published in print September 2011 | ISBN: 9780199583584
Published online September 2013 | e-ISBN: 9780191777813 | DOI:

Series: Very Short Introductions

The economy and the environment

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‘The economy and the environment’ explains some basics of economics, including market failure and negative externalities, and shows how they can affect the environment. Much of economic justification for public policy action is concerned with repairing the underlying causes of market failure. Pollution is an example of a negative externality, where person A's actions cause harm to the interests of person B. Case studies of the 1952 London smog and Rachel Carson's Silent Spring, which highlighted the effects of DDT on wildlife, are discussed. Without some form of public intervention and government regulation to regulate the level of pollution, the socially optimal level of pollution control is unlikely to be achieved.

Keywords: clean Air Act; economy; environment; Environmental Protection Agency; market failure; market power; smog

Chapter.  2764 words.  Illustrated.

Subjects: Environmental Economics

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