Environmental Markets

Environmental Markets explains the prospects of using markets to improve environmental quality and resource conservation. No other book focuses on a property rights approach using environmental markets to solve environmental problems. This book compares standard approaches to these problems using governmental management, regulation, taxation, and subsidization with a market-based property rights approach. This approach is applied to land, water, wildlife, fisheries, and air and is compared to governmental solutions. The book concludes by discussing tougher environmental problems such as ocean fisheries and the global atmosphere, emphasizing that neither governmental nor market solutions are a panacea.

"A clear grasp of economics is essential to understanding why environmental problems arise and how we can address them. ... Now thoroughly revised with updated information on current environmental policy and real-world examples of market-based instruments .... The authors provide a concise yet thorough introduction to the economic theory of environmental policy and natural resource management. They begin with an overview of environmental economics before exploring topics including cost-benefit analysis, market failures and successes, and economic growth and sustainability. Readers of the first edition will notice new analysis of cost estimation as well as specific market instruments, including municipal water pricing and waste disposal. Particular attention is paid to behavioral economics and cap-and-trade programs for carbon."--Publisher's web site.

Markets are increasingly central to the resolution of environmental problems. They played a critical role in implementing the 1990 Clean Air Act of the United States, which has been instrumental in reducing acid rain in a cost-effective manner. They are also central to the global strategy adopted for limiting the emissions of greenhouse gases under the 1997 Kyoto Protocol and are being used for resolving conflicts over the use of other environmental resources, particularly water. Environmental Markets: Equity and Efficiency represents the first systematic and in-depth study of the economic issues raised by this growing use of environmental markets. Focusing on the relationship between equity and efficiency—which is central to many of the debates between industrial and developing countries—the book explores the underlying economics and the possibilities for win-win solutions that benefit all parties to the problems. Graciela Chichilnisky and Geoffrey Heal have been instrumental in developing the economic understanding required for the operation of environmental markets and for promoting their use among policy makers leading to the Kyoto Protocol. Contributors to this volume include established experts from international organizations, nongovernmental organizations, and academia, including Raúl Estrada-Oyuela, who chaired the negotiating committee of the Framework Convention on Climate Change and the 1997 Kyoto meetings.

A Brief Survey of Environmental Asset Classes; Market Failures and Policy Responses; Acid Rain Pollutants as an Asset Class; Greenhouse Gas Pollutants as an Asset Class; Emerging Geographies for Greenhouse Gas Emissions Markets; Forest Carbon as an Asset Class; Clean Energy Markets and Their Associated Asset Classes; Water Markets and Their Associated Asset Classes; Markets for Water Quality-Nutrient Trading; Sustainable Fisheries Management and Its Associated Asset Classes; Weather Risks and Associated Asset Classes; Sustainability and Associated Asset Classes; Conclusion: You Can Put a Price on Nature;

Environmental asset classes are not a hope for tomorrow but a reality today. This new asset category promises to grow dramatically in the 21st Century as financial analysts, investors, and corporations around the world try to find ways to profit or reduce costs while promoting environmental social benefits. Sustainable Investing and Environmental Markets: Opportunities in a New Asset Class presents a groundbreaking new way to “do well and to do good”. With a combination of over 50 years of practical experience in the field of environmental finance, Richard Sandor, Nathan Clark, Murali Kanakasabai and Rafael Marques provide a solid preliminary understanding of the promising and transformational new investment category of environmental assets. Three broad asset classes — air and water; catastrophic and weather risk; and sustainability — are covered across 12 chapters which analyze how these environmental asset classes are currently being incorporated into commodities, fixed income, and equity instruments and what the future holds for the field. Contents:A Brief Survey of Environmental Asset ClassesMarket Failures and Policy ResponsesAcid Rain Pollutants as an Asset ClassGreenhouse Gas Pollutants as an Asset ClassEmerging Geographies for Greenhouse Gas Emissions MarketsForest Carbon as an Asset ClassClean Energy Markets and Associated Asset ClassesWater Markets and Associated Asset ClassesWater Quality Trading and Its Associated Asset ClassesSustainable Fisheries Management and Its Associated Asset ClassesWeather Risks and Associated Asset ClassesSustainability and Associated Asset ClassesConclusion: You Can Put a Price on Nature Readership: Readers interested in the environment as an asset class; investors, financial analysts, policymakers, undergraduates and postgraduates of finance and economics. Key Features:There is no equivalent book in the market right now that covers environment-financial issues from a practitioner's standpointThis book combines economic theory and practical experience — making it a valuable tool for anyone who is interested in the environment as an asset class (investors, analysts, policymakers, students of finance and economics)Keywords:Environment;Emissions;Trading;Finance;Derivatives;Water;Energy;Carbon;Catastrophe;Weather;Sustainability;Fisheries;Greenhouse Gases;Sulfur Dioxide;Acid Rain;Clean Energy MarketsReviews: “A “how-to” manual for using eco-markets to save the planet … laced with deep, important history and the foresight of the truest financial and environmental market pioneer, this book tells the tale of how, with leadership, we can change the world.” Commissioner Bart Chilton US Commodity Futures Trading Commission “With this book, Dr Richard Sandor and his colleagues help bridge a critical gap between academic theory and business practice. A must-read for students, investors, policymakers, and anyone interested on the worldwide opportunities for markets to tackle pressing issues such as climate and water. An important reference piece, written by someone who has helped shape the field of environmental finance as both an academic and practitioner.” Joseph P Kenendy II Founder, Chairman, and President of Citizens Energy Corporation and Member of the US House of Representatives for Massachusetts 8th District (1987–1999) “This is a great book. Every student should read it as a freshman. It is the handbook of how different innovative approaches accelerate the creation of a sustainable future for all of us. Nature has a monetary price, and Richard Sandor and his co-authors tell you in this book how price discovery leads to environmental protection.” Alexander J B Zehnder Nayang Technological University, Singapore Former President of ETH Zurich, and a father of the concept of the “2000 Watt Society”

Market-based solutions to environmental problems offer great promise, but require complex public policies that take into account the many institutional factors necessary for the market to work and that guard against the social forces that can derail good public policies. Using insights about markets from the new institutional economics, this book sheds light on the institutional history of the emissions trading concept as it has evolved across different contexts. It makes accessible the policy design and practical implementation aspects of a key tool for fighting climate change: emissions trading systems (ETS) for environmental control. Blas Luis Pérez Henríquez analyzes past market-based environmental programs to extract lessons for the future of ETS. He follows the development of the emissions trading concept as it evolved in the United States and was later applied in the multinational European Emissions Trading System and in sub-national programs in the United States such as the Regional Greenhouse Gas Initiative (RGGI) and California's ETS. This ex-post evaluation of an ETS as it evolves in real time in the real world provides a valuable supplement to what is already known from theoretical arguments and simulation studies about the advantages and disadvantages of the market strategy. Political cycles and political debate over the use of markets for environmental control make any form of climate policy extremely contentious. Pérez Henríquez argues that, despite ideological disagreements, the ETS approach, or, more popularly, 'cap-and-trade' policy design, remains the best hope for a cost-effective policy to reduce GHG emissions around the world.

What is the source of our environmental problems? Why is there in modern societies a persistent tendency to environmental damage? From within neoclassical economic theory there is a straightforward answer to those questions: it is because environmental goods and harms are unpriced. They come free. This position runs up against a view which runs in entirely the opposite direction, that our environmental problems have their source not in a failure to apply market norms rigorously enough, but in the very spread of these market mechanisms and norms. The source of environmental problems lies in part in the spread of markets both in real geographical terms across the globe and through the introduction of markets mechanisms and norms into spheres of life that previously have been protected from markets. In this book, John O’Neill conducts a thorough examination of these two opposing viewpoints covering a discussion of the ethical boundaries of markets, the role of private property rights in environmental protection, the nature of sustainability and the valuation of goods over time. This book is essential reading for undergraduate and postgraduate students studying courses in ecological and environmental economics.