Recource economics : An economic approach to natural resource and environmental policy

This is a book about natural resource and environment policy and, in par ticular, the role of economic analysis in informing, analyzing, evaluating. and assisting in the development of that policy. Resource economics, to war the imprecise but mercifully brief term by which this subdiscipline is known, is seen as an applied, policy-o y-oriented field of enquiry. It is seen as so thor oughly policy-oriented that it would not exist as an identifiable subdiscipline of economics if (a) all resource-related decisions were made by the decentral ized, profit-seeking entrepreneurs of competitive microeconomic theory, and (6) the outcomes of such decisions were regularly and predictably effi cient and just. If there were no need for resource and environmental policy.

there would be no need for applied resource economics. Although economics is the focal point and the unifying theme of this book, economics is not treated in isolation. A considerable respect is ac corded the natural sciences, and legal, political and administrative concerns are substantially integrated with economic analysis whenever the opportu nity arises. Throughout the book, real-world examples are used to illustrate important concepts; Part V is entirely devoted to the use of resource eco nomics principles in analyzing applied problems.

The organization of this book reveals the author's philosophy with re spect to teaching resource economics. Part I provides a perspective on the resource and environmental problems of the modern world. It gives defini tions of some of the concepts essential to resource economics, identifies some major issues in resource and environmental policy, and introduces the economic way of thinking about these issues. Then, Part II offers an inten sive, intermediate-level treatment of the economic principles fundamental to resource economics. Topics discussed include those of demand, supply and market equilibrium, static efficiency in general equilibrium, saving, invest ment, capital markets and intertemporal equilibrium, welfare and policy criteria, property rights, and market failure. These principles are illustrated with relevant examples, but the principles themselves are emphasized. Then, and only then, do we return to the applied sphere of institutional real ities (Part III), techniques of quantitative analysis (Part IV), and the inte grated analysis of applied policy problems (Part V). The "applications" sec tion truly integrates theory, analyses, and institutions, to address policy issues. In several chapters, theoretical principles from Part II are further de veloped and extended to permit specialized analyses, for example, of exhaustible resource extraction, biological resource management, and land

markets. This second edition differs quite substantially from the first. Here, the analysis is presented consistently at the intermediate level. Students will need to have completed a previous course in principles of economics. Upper division undergraduates and beginning graduate students should be com fortable with the level of presentation. Further, the topical coverage has been expanded to include complete theoretical development of the principles of intertemporal resource allocation with applications to exhaustible and bi ological resources, and a detailed conceptual analysis of land markets

Treatments of benefit cost analysis is extended in depth and coverage. For this edition, my goal was to provide a complete textbook in resource and environmental economics at a consistent intermediate level of treat ment.