Environmental Economics and Policy

2.

Market Failures and Environmental Problems

2.1.

Theory of Externalities

2.1.1.

Definition and Characteristics

2.1.2.

Types of Externalities

2.1.2.1.

Production Externalities

2.1.2.1.1.

Negative Production Externalities

2.1.2.1.2.

Positive Production Externalities

2.1.2.2.

Consumption Externalities

2.1.2.2.1.

Negative Consumption Externalities

2.1.2.2.2.

Positive Consumption Externalities

2.1.3.

Graphical Analysis of Externalities

2.1.3.1.

Marginal Private Cost vs. Marginal Social Cost

2.1.3.2.

Marginal Private Benefit vs. Marginal Social Benefit

2.1.3.3.

Deadweight Loss from Externalities

2.1.3.4.

Optimal Level of Externality

2.1.4.

Network Externalities

2.1.5.

Reciprocal Externalities

2.2.

Public Goods and Environmental Quality

2.2.1.

Characteristics of Goods

2.2.1.1.

Rivalry in Consumption

2.2.1.2.

2.2.1.3.

Classification Matrix

2.2.2.

2.2.2.1.

2.2.2.2.

2.2.2.3.

Common-Pool Resources

2.2.2.4.

2.2.3.

Pure Public Goods

2.2.3.1.

Examples in Environmental Context

2.2.3.2.

Optimal Provision Conditions

2.2.3.3.

Samuelson Condition

2.2.4.

The Free-Rider Problem

2.2.4.1.

Incentives for Free-Riding

2.2.4.2.

Consequences for Public Good Provision

2.2.4.3.

Solutions and Mechanisms

2.3.

Common-Pool Resources

2.3.1.

Characteristics and Examples

2.3.2.

The Tragedy of the Commons

2.3.2.1.

Hardin's Original Formulation

2.3.2.2.

Mathematical Models

2.3.2.3.

Real-World Examples

2.3.3.

Open-Access vs. Common Property

2.3.4.

Factors Affecting Resource Degradation

2.3.4.1.

Number of Users

2.3.4.2.

Resource Characteristics

2.3.4.3.

Institutional Arrangements

2.3.5.

Solutions to Commons Problems

2.3.5.1.

2.3.5.2.

Government Regulation

2.3.5.3.

Community-Based Management

2.3.5.4.

Hybrid Approaches

2.4.

Property Rights and the Coase Theorem

2.4.1.

Property Rights Theory

2.4.1.1.

Bundle of Rights Concept

2.4.1.2.

Importance of Well-Defined Rights

2.4.1.3.

Enforcement Mechanisms

2.4.2.

The Coase Theorem

2.4.2.1.

Statement of the Theorem

2.4.2.2.

Conditions for Applicability

2.4.2.2.1.

Well-Defined Property Rights

2.4.2.2.2.

Zero Transaction Costs

2.4.2.2.3.

Perfect Information

2.4.2.3.

Implications for Environmental Policy

2.4.3.

Transaction Costs

2.4.3.1.

Types of Transaction Costs

2.4.3.2.

Barriers to Coasean Bargaining

2.4.3.3.

Role of Institutions

2.4.4.

Limitations and Criticisms

2.4.4.1.

2.4.4.2.

Strategic Behavior

2.4.4.3.

Multiple Parties

2.5.

Information Problems

2.5.1.

Asymmetric Information

2.5.2.

2.5.3.

Adverse Selection

2.5.4.

Principal-Agent Problems in Environmental Management

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1. Foundations of Environmental Economics

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3. Environmental Valuation