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Green Economics

Published online by Cambridge University Press:  26 March 2020

John Kay  and
Aubrey Silberston
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Abstract

We all recognise environmental problems—the pollution of air and rivers, the destruction of rain forests, global warming. The article argues that environmental problems are less the result of inappropriate values than of an incorrect calculus, and that economic evaluation and economic instruments have a major role to play in the correction of that calculus.

The green prescription of lower growth as a means of reducing environmental damage is dismissed—if higher output is often the cause of the problem, it is also what enables us to afford to deal with it. Policy should start from an adequate evaluation of the costs and benefits of action and inaction; the article instances nitrate in water, where the costs of rectification seem out of proportion to any likely benefit. Market mechanisms—such as taxes and tradeable licences—are often the best way of tackling environmental problems; but economists are sometimes as naive about their general applicability as non-economists about the effectiveness of prescriptive regulation.

Type
Articles
Information
National Institute Economic Review , Volume 135 , February 1991 , pp. 50 - 64
Copyright
Copyright © 1991 National Institute of Economic and Social Research

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Footnotes

The Review is pleased to give hospitality to the deliberations of the CLARE Group but is not necessarily in agreement with the views expressed. Members of the CLARE Group are M.J. Artis, A.J.C. Britton, W.A. Brown, C.H. Feinstein, C.A.E. Goodhart, D.A. Hay, J.A. Kay, R.C.O. Matthews, M.H. Miller, P.M. Oppenheimer, M.V. Posner, W.B. Reddaway, J.R. Sargent, M.F-G Scott, Z.A. Silberston, J.H.B. Tew, J.S. Vickers, S. Wadhwani.

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