Abstract
Solutions to environmental problems are clearly related to the way these problems are conceived, i.e. how the roots of the problems are understood. Traditional neoclassical economics explains the roots of environmental problems as market failure. In the case of collective goods, these failures are due to difficulties in establishing markets, while in the case of negative externalities, the failures are due to a lack of well-defined property rights that might otherwise be a foundation for establishing markets. The Coase solution to environmental problems would be to determine property rights as a basis for negotiations between involved parties, but because of transaction costs and several other real world problems this would only rarely be applicable. Suggestions have thus mainly concentrated on the estimation of optimal pollution and the use of either tariffs or tradeable permits to ensure this level.
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Røpke, I. (1998). Sustainability and Structural Change. In: Faucheux, S., O’Connor, M., van der Straaten, J. (eds) Sustainable Development: Concepts, Rationalities and Strategies. Economy & Environment, vol 13. Springer, Dordrecht. https://doi.org/10.1007/978-94-017-3188-1_9
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DOI: https://doi.org/10.1007/978-94-017-3188-1_9
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