Instructor’s Manual FOR ENVIRONMENTAL ECONOMICS An Introduction Release Barry C. Field Martha K. Field

Chapter 1
What Is Environmental Economics?
Updates for 2024 Release
Chapter 1 includes updates on climate change data, specifically for exhibits on
carbon taxes and CO2 emissions. The emphasis on incentives as a key concept remains
consistent with previous editions.
Objectives
The purpose of this chapter is to whet students’ appetites, by presenting them with
some examples of the types of problems environmental economists work on and some of
the approaches they take. Most of the examples are illustrated with short exhibits to
increase their immediacy. They are meant to be sketches that are easily understandable by
students, without the need of devoting a lot of class time to their deeper interpretation.
Main Points
At this juncture, there are just two leading ideas to emphasize: (a) the critical role
of incentives in producing environmental degradation and in designing environmental
policies and (b) the importance of studying the short- and long-run benefits and costs of
environmental improvements.
Teaching Ideas
It is especially important to set a positive tone early. Most students will come to
the class as environmental advocates. With its attention to costs, trade-offs, and notions
of efficiency, environmental economics can seem for many to lead toward a weakening
of the forces of environmental advocacy and to lower aspiration levels for environmental
improvements. That is why many environmental advocacy groups look at environmental
economics with a jaundiced eye. It’s important to begin getting the message across that
this is incorrect, that, instead, the subject will prove to be very useful in such things as
designing environmental policies with more teeth than some of those we have had in the
past, getting more environmental improvement from the resources we devote to these
programs, and learning more about the real levels of environmental damages and the
values people put on improving the natural environment.
Many students will also come to the class with the simplistic notion that
environmental deterioration is primarily a result of “capitalism,” where decisions are