Current Issues in U.S. Environmental Policy

By Paul R. Portney; A. Myrick Freeman | Go to book overview

Foreword

A significant social development of the past decade has been the general realization that important damage may be done to the environment if the economy is permitted to operate in an unfettered way. While certain environmental insults may be corrected automatically over time, other damaging effects will never be avoided in the absence of specific policies and programs for this purpose. This certainty of "market failure" has long been known in principle by economists, yet modern technology and mass consumption have made many of these undesirable side effects visible or otherwise known to many people in direct and often dramatic fashion.

The political system has reflected this general realization by the passage of much environmental legislation, especially since 1970. Most of this legislation has been designed to regulate or constrain the economy so that production and consumption will fall within certain environmentally acceptable limits. We have been generally unwilling or unable to build into the incentive system rewards and penalties which would have the economy automatically "produce" the kind of environment desired.

It is appropriate that economists concern themselves with this general group of problems. Just as the awareness of environmental problems be­7 comes more general, it is now also becoming known more generally that environmental improvement requires more resources and greater sacrifices. Thus an economic problem exists whether lawmakers decide to protect the environment through direct regulation or whether they choose to modify the economic incentives that affect the behavior of millions of decision makers in the economic system.

Resources for the Future pioneered research on problems of the environment. Many specific and technical investigations have been undertaken, and RFF publications have reported the results of these studies. This procedure has resulted in a substantial literature, and there are sev

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