Environmental Management: Principles and practice

Recommended reading
Journals which publish articles on monitoring, eco-auditing and EMSs
Eco-Management and Auditing
Environmental Accounting and Auditing Reporter
Environmental Assessment
Environmental Auditing
Environmental Management
Environmental Monitoring and Assessment
Impact Assessment and Project Appraisal
Journal of Environmental Planning and Management

---

75
C h a p t e r 5
Environmental
management and
economics
♦ The ‘greening’ of economics
76
♦ Environmental economics
79
♦ Global environmental problems and
economics
79
♦ Environmental accounts
80
♦ Evaluating the environment and natural
resources
81
♦ Green taxes
82
♦ Green funding
84
♦ Debt, structural adjustment and environment
86
♦ Paying for conservation
87
♦ Trade and environmental management
88
♦ Recommended reading
92

---

76
Regardless of the stance adopted, whether utopian, utilitarian, libertarian, Malthusian,
cornucopian, etc., for almost as long as economics has existed, economists have
invoked the ‘invisible hand of the market’ as a mechanism that supposedly ensures
that it becomes uneconomical to exploit a potentially renewable resource before it is
badly damaged. Pareto optimum, a basic theorem of welfare economics, states that
through market exchange, with each person pursuing their private interests, there are
effective controls over resources exploitation and use of the environment; it also
states that, except in inefficient market situations, it is not possible to make anyone
better off without making at least one person worse off. Unfortunately, the market
has not been an effective control: there are plenty of examples of ruined fisheries,
lost forests, etc. to prove it. At present:
‘“the free market” does not provide consumers with proper information, because
the social and environmental costs of production are not part of current
economic models…. Private profits are being made at public costs in the
deterioration of the environment and the general quality of life, and at the
expense of future generations.’
(Capra, 1997:291)
The market may fail to control exploitation for various reasons, including
difficulty in valuing many resources (e.g. what is the worth of a rare plant?); some
things are valueless as a use has yet to be found for them. Resources and environment
may be used to give outputs (such as crops) or benefits (such as recreational use) or
there may be non-use (intrinsic) value (e.g. conservation provides material for future
pharmaceutical use or crop-breeding). When a resource or the environment has current
utility (i.e. can give ‘satisfaction’), this may be gained directly (e.g. use of land for
recreation or tourism) or indirectly though manufacturing (Perman et al., 1996).
Figure 5.1 lists the elements of total economic value.