Handbook of Environmental and Resource Economics
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Handbook of Environmental and Resource Economics

Edited by Jeroen C.J.M. van den Bergh

This major reference book comprises specially commissioned surveys in environmental and resource economics written by an international team of experts. Authoritative yet accessible, each entry provides a state-of-the-art summary of key areas that will be invaluable to researchers, practitioners and advanced students.
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Chapter 25: Distributional Issues: An Overview

J. Martinez-Alier and M. O’Connor


Joan Martinez-Alier and Martin O’Connor 1. Distribution of property rights, income and power The main issue of this chapter is whether or not allocative and distributional issues can be dealt with independently. The economic values which non-traded and traded environmental goods and services, or negative externalities, might be given depend (in different ways) on the endowment of property rights and on the distribution of power and income. Consequently, since environmental and resource economics is concerned with the economic valuation of negative externalities and of environmental goods and services, then the question of rights and of power and income distribution has central importance in environmental and resource economics, both at the level of theory and for policy applications. Lawrence Summers (1992) emphasized the theoretical and policy importance of income distribution for valuation when he wrote: the measurement of the costs of health impairing pollution depends on the foregone earnings from increased morbidity and mortality. From this point of view a given amount of health impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. In other words, ‘the poor sell cheap’, and their best chance of addressing ‘externalities’ will not be in the market or in ‘surrogate’ markets (where damages are valued in terms of willingness to pay (WTP) or willingness to accept compensation (WTAC)), but through other types of social action (cf. the ‘environmentalism of the poor’ analysed in Guha and MartinezAlier, 1997). In effect, in neoclassical equilibrium theory,...

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