Book Review of Principles of Environmental and Resource Economics

Book review

Folmer H, Gabel HL: Principles of environmental and resource economics: A guide for students and decision-makers

CAIS MAIN (Level 1) HC79 E5 P957

This book consists of 22 contributed chapters that provide an excellent introduction to important topics in the field of environmental and resource economics. The contributors consist of many leading scholars in the field. The book is explicitly targeted as a teaching tool for upper-level undergraduates as well as a reference for practitioners and researchers. In my view, another niche for which the book is particularly suited is graduate programs in environ-mental policy, business administration, or combinations of both. The book is organized into three parts: General environmental economics, Business environmental economics, and selected topics.

The first part, General environmental economics, covers fundamentals of the field. Chapter one sets the stage for environmental problems with a discussion of markets and market failure. Correcting these failures inevitably involves economic valuation. Accordingly, the next two chapters address theoretical and empirical issues related to valuing the environment. How then are actual policy decisions made? A chapter on benefit-cost analysis provides some guidance, while another chapter on principles of environmental policy shows how the answer involves consideration of effectiveness and equity. It is argued, nevertheless, that economic analysis provides an important and influential guide for policymakers. The next chapter shows this with a comparison of different policy instruments, such as standards, taxes, and tradable permits. The final chapter demonstrates how economy-wide models are useful for forecasting economic impacts...

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...rce economics’’ will find relatively little in this book, as only one chapter is devoted to resource utilization.

In conclusion, this book is not just another text among the increasing number of books on environmental and resource economics. It has two distinct comparative advantages. First is the authors’ appreciation for the important, yet sometimes limited, role of economics analysis in environ- mental policy. Second is the originality and increasing importance of the chapters on Business environmental economics. For these reasons, this book could prove especially useful for introducing environmental and resource economics to graduate programs in environmental policy and business administration. These same reasons also make the book appealing as a reference for undergraduates, practitioners, and researchers working in the field.