The Law and Economics of the Environment

The Law and Economics of the Environment

Edited by Anthony Heyes

This outstanding book focuses on how economics can contribute to the design, implementation and appraisal of legal systems that create the ‘right’ incentives for environmental protection. The sixteen original and specially commissioned contributions – written by some of the leading names in their field – span many of the important areas of contemporary interest and employ case study material combined with theoretical, empirical and experimental research.

Preface

Richard A. Posner

Subjects: economics and finance, environmental economics, environment, environmental economics, environmental law, environmental sociology, law - academic, environmental law

Extract

Richard A. Posner* Environmental law has played an important role in economic thinking about law, indeed in economic thinking generally. Pollution and congestion were central examples of externalities in important contributions to economics by Pigou, Knight and, of course, Coase; Coase’s essay ‘The problem of social cost’, a key document in the economic analysis of law, is about external costs and uses examples from the English common law of nuisance. These great economists and the early work of the lawyer-economists that followed them focused on the law of nuisance at a time when statutory regulation of pollution and other externalities was far less extensive than it has become. The exploration of the basic economics of externalities and the basic common law doctrines and institutions for dealing with externalities constitute a ‘first generation’ of economic analysis of environmental law. The present book of essays illustrates the ‘second generation’ of economic analysis of environmental law. The fundamental economic issues, and the common law, are no longer the focus. The lessons of the ‘first generation’ have been absorbed and transcended. The focus has shifted to the level of application, which is the level at which the economist and the lawyer-economist can best hope to influence policy. The essays take up issues of public choice, statutory detail, liability rules (strict liability versus negligence), and remedies (both civil and criminal) with specific reference to insolvency and agency problems. The basic economic framework is assumed, and the discussion proceeds to the concrete methods of implementing the...