Environmental problems that humanity now faces and the necessity of their urgent solving lead to the idea that the environment can no longer be viewed as an entity separate from the economy. A thorough analysis of contemporary environmental issues from the point of view of economic effects and the impact they have on humanity is important in terms of solving the environmental problems confronting society, such as pollution, population growth, global warming, loss of biodiversity and others.
A professional attempt to combine ecological and economic issues was made by Jonathan M. Harris in his fundamental work ‘Environmental and Natural Resource Economics: A Contemporary Approach’. The main contributions of this book is that it provides the readers with the theoretical framework for understanding environmental and natural resource issues and demonstrates how economics can suggest a useful set of concepts and tools that help society to allocate environmental resources.
‘Environmental and Natural Resource Economics’ is concerned with a broad and balanced economic approach that integrates traditional microeconomic analysis with a detailed study of macro-level ecological problems that need solution on the local, national, and global level. The book responses to the developments in the economic knowledge and the world of environmental policy as well and suggests comments and observations based on classroom use.
To be more exact, the work under consideration comprises seven parts: ‘Introduction: The Economy and the Environment’, ‘Economic Analysis of Environmental Issues’, ‘Ecological Economics and Environmental Accounting’, ‘Population, Agriculture, and the Environment’, ‘Energy and Resources’, ‘Pollution: Impacts and Policy Responses’, ‘Environment, Trade, and Development’. The issues stated are disclosed through the use of numerous examples, updated case studies, current economic data, etc. The core concepts are better understood and analyzed by the reader with the help of graphs, key terms, and end-of-chapter questions presented in the book.
The work starts with the ‘Introduction’ that gives the general tone of the book and suggests its perspectives. As well as other chapters, ‘Introduction’ singles out ‘Chapter Focus Questions’ that help the reader to concentrate on the burning issues and to get prepared for further discussion.
In the first chapters the author explains the significance of understanding the economics of the environment. He claims that economic dimension that policies aimed at is often crucial for choosing an adequate policy. “Some cases may require tradeoffs between economic and environmental goals; in other cases these goals may prove compatible and mutually reinforcing” (Harris, 2006, p. 14).
Harris singles out two different approaches as far as economic analysis of environmental issues is concerned. These are the standard approach and the ecological economic approach. “The standard approach applies economic theory to the environment using concepts of money valuation and economic equilibrium.” The aim of this approach is to establish efficient management of natural resources and proper valuation of waste and pollution that impact on the environment. The second approach treats economic system as a subset of a broader biophysical system and “emphasizes the need for economic activity that conforms to physical and biological limits” (Harris, 2006, p. 14).
The book comprises both microeconomic and macroeconomic analytical perspectives. It draws on the two approaches to help to understand the major ecological and economic problems. Harris states that the combination of the two perspectives helps “to formulate policies that address specific environmental problems as well as promote a broader vision of environmentally sustainable development” (Harris, 2006, p. 14).
The second chapter of the book under consideration is important in terms of understanding the relationship between economic growth and environment. The author suggests a brief history of this problem where he states that economic growth over time reflects both population and per capita gross domestic product growth. According to Harris (2006), economic growth is determined by accumulation of capital, ecological economics also focuses on the factors like energy supply, supplies of land and natural resources (natural capital), and absorptive capacity of the environment for the waste products of industrial development.
Harris presents a summary of recent growth and wonders if the humanity will have enough energy, resources, and environmental capacity to sustain the current level of output. ‘Environmental and Natural Resource Economics’ throws light on many specific aspects of this question, the main dimensions of the problem and possible approaches are suggested by the author.
Analyzing the interrelation between the future economic growth and the environment the author admits that the future of global economy will be determined by environmental considerations, they will play a significant role in shaping economic development.
Considering the main factors of the new global economy the author studies the phenomenon of population momentum. It becomes a focus of the tenth chapter. The phenomenon under analysis guarantees population growth in most countries over the next half-century.
The author foresees that food consumption will grow significantly faster than population. “Increasing global food production will require intensification of production” (Harris, 2006, p. 26). It will lead to stresses imposed on land and water supplies, the increased fertilizer requirements, the problems of erosion, chemical runoff, pesticide pollution, etc.
Chapter 11 examines in detail the interplay between population, social inequality, food consumption, food production, and environmental impacts. Expanding populations require more agricultural land, more space for urban, residential, and industrial development.
The overall economic growth leads to the problem of growing volumes of cumulative pollutants and of toxic and nuclear wastes. Chapter 17 suggests the economic analysis of pollution control and offers a theory of industrial ecology which investigates the relationship of pollution-generating activities to the natural environment.
In relation to the major environmental and resource challenges that future centuries will bring Harris argues that there are two perspectives – optimistic and pessimistic. The author does not lean to any of the two groups of scientists, rather, he stresses on the importance of global environment and resource issues that each of the group should give the primary consideration to.
Chapters 10-18 provide the reader with an economic analysis “that addresses a global economy in which resource and environmental considerations are much more prominent than in the past” (Harris, 2006, p. 29). In these chapters the author argues that both the market-oriented approaches that stress economic system adaptability and the ecological assessment of biophysical problems are important in terms of devising policy responses.
The last chapters of the book are useful for understanding the interconnection between trade and environment. As world trade expansion has raised the issue of the relationship between trade and the environment the author resorts to the economic theory to analyze some of the gains and losses associated with environmental effects of trade. We consider this chapter to be especially important for future development in the sphere of Environmental and Natural Resource Economics.
Having read Jonathan M. Harris’s work we conclude that economic growth, population growth, and trade are the main challenges that environmental economists should concentrate their attempts on. These three issues are closely interconnected and depend one from another equally negatively influencing the environment. Economic growth, population growth and trade have important implications for many environmental processes and this is today when environmental economists should start working out mechanisms that will establish their reasonable interplay with environment. Economists should study the environmental impact of the projects that these three processes are impossible without and suggest adequate measures in terms of environmental and natural and human resource management regulations.
As in contemporary society the environment has become a scarce resource, economics becomes a useful tool when dealing with environmental problems. The current research follows the standard economic theory integrating both micro- and macro-economic analysis with the emphasis made on ecologic problems that need urgent solution. Microeconomic and macroeconomic analytical perspectives that the book comprises approach the solution of environmental issues that remain burning nowadays.
The book as a whole is a professional integration of the standard environmental economics and ecological economics. It is a precious source of information on the specific topic and it is destined to become an effective tool for those who are interested in solving the current environmental problems by implementing the economic knowledge on practice.
Harris, J. (2006). Environmental and Natural Resource Economics: A Contemporary Approach, 2nd Edition, Houghton-Mifflin.