The Environment in Economics.

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    • Abstract:
      The article presents information on the role of environment in economics. A new view has evolved that recognizes the importance of amenity services derived from the environment. According to the study, the new view has two distinct focuses which, interestingly, parallel the traditional ones on extractive resources. One focus is on specific natural environments, which can be put to extractive or amenity uses and are akin to stocks of nonrenewable resources that are consumed once and for all. The second is on pollution, a use of the assimilative capacity of the environment that is similar to sustainable yield exploitation of renewable resources-both are reversible, except in cases of extreme abuse and both involve flows rather than stocks. There are, of course, overlaps in the two focuses, but one feels that their conceptual and historical differences are worth emphasizing. To state the point more positively, environmental problems appear to offer an opportunity for economists to engage in multidisciplinary research that is theoretically respectable and of practical importance.