Economics and the Environment: A signalling and incentives approach

Coordinating our use of the earth's natural resources is not easy. Resource users are many, their goals diverse, and their impacts on the environment often uncertain.

How we use those resources depends on the signals and incentives we receive, from either the market or our governments. These systems encourage certain uses of natural resources, but they are not perfect. We harm the environment not out of malice, but because we do not know the consequences of our actions, or the incentives for...