Pervasive environmental spillovers are replacing the now outmoded bees and apple orchards as the economists' examples of external effects. The materials balance approach underlines the generality of residuals as the normal outcome of the throughput of materials in the course of production and...

Economic theory and empirical models suggest that economic instruments should help us to meet environmental goals at lower cost. Practical experience, however, shows that the cost savings of emission trading are smaller than expected and charges usually have had small incentive impacts. This...