Contents

Acknowledgments

Introduction

Part I. Toward a New Paradigm

1. Something Happened on the Way to the Twenty-First Century

Full-World Economics: Limits to Growth

Full-World Economics: Externalities Are the Rule, Not the Exception

Ecosystem Complexity

Notes

2. Cost-Benefit Analysis

The Lure of CBA

CBA and Value Judgments

Compensation

When People Have Rights

How Power and Wealth Matter

When the Rate of Time Discount Is Determinant

When Continuity Is Unlikely

When Benefits Are Hard to Quantify

Not All Uncertainty Is Created Equal

Notes

3. What on Earth Is Sustainahle Development?

Sustainable Development: A Definition

What Is GDP?

What Is Wrong With GDP?

Economic Progress

Sustainability as Intergenerational Equity

When Capital Is Not Fungible

Social Versus Economic Progress

A Workable Definition

Notes

Part II. Why the Environment Is at Risk

4. Useful Insights From Mainstream Economics

Externalities and Professor Pigou

Public Goods and the Free-Rider Problem

The Tragedy of the Commons

Climate Change Preview

Resource Extraction and Rates of Time Preference

Notes

5. Where Mainstream Economics Dare Not Go

The Growth Imperative: Beyond Assuming Conclusions

Biases Against Leisure and Collective Consumption

Competition and Absentee Ownership

How Endogenous Preferences Matter

Why the Kuznets Curve Will Not Save the Day

How High Pigovian Taxes?

Jobs Versus the Environment Is Not the Problem

Notes

Part III. Environmental Policy

6. Free-Market Environmentalism: Misinterpreting the Coase Theorem

The Coase Theorem: Standard Presentation

There Is No Market!

A Game of Divide-the-Pie

Perfect Knowledge Is Not Complete Information

Negotiations With Incomplete Information

Multiple Victims: More Than Transaction Costs

The Myth of Free-Market Environmentalism

Notes

7. Real-World Environmental Policy

A Policy Primer

Incidence, Progressivity, and Rebates

Zoning and Sprawl

Community Management: The Neglected Alternative for CPRs

Permit Markets: Dream or Nightmare?

Keeping Wall Street at Bay

The United States: A Very Special Country Indeed

Notes

Part IV. Climate Change

8. A Brief History of Climate Negotiations

The Road to Copenhagen

The Free-Rider Problem

Reconciling Effectiveness, Equity, and Efficiency

Kyoto: Myth Versus Reality

Notes

9.Criticisms of Kyoto

What Kyoto Got Right

Too Little, Too Late

Monitoring Problems

The Case for Carbon Trading

The Case Against Carbon Trading

Efficiency Problems

Equity Problems

Enforcement Problems: The Invisible Elephant

Notes

10.Beyond Kyoto

Let Science Set the Caps

Caps for All

Equitable Caps: The Greenhouse Development Rights Framework

Capping Net Emissions

A New Sheriff for the Carbon Market

Why Not an International Carbon Tax?

Can It Sell in Brussels, Beijing, and Buffalo?

A Useful Role for Environmental Justice Activists

Notes

Appendix to Part IV: Exercise on Climate Control Treaties

Conclusion

References

Index

About the Author