Characteristics and criticism of conventional eco- and environmental economics models

S. Karajz
Ecological Marketing and Management
270 - 279


The aim of the article. The aim of the article is to introduce basic theories of environmental economics, dealing with environment factors, and to present critical view on them.

The results of the analysis. The necessity to create a new economic paradigm or to elaborate a new approach to economics can most efficiently be justified by providing a critical analysis of conventional economic theories. Following this view, the material introduces basic theories of environmental economics belonging to the branch of economics dealing with environmental factors and based on conventional or neoclassical foundations (problems of public welfare, Pigouvian taxes, the Coase theorem, optimal utilisation of natural resources, the standard price theory) and presents critical views related to these issues.

Conclusions and directions of further researches. The conventional economics is based on fundamental assumption of neoclassical welfare economics according to which the primarily aim of economics is obviously to achieve Pareto optimal conditions. This optimum can be in two meanings: if Pareto optimum means Pareto norms, it reflects relevant conditions for economic policy. If Pareto optimum is linked with marginal analysis when a determined fictitious economic optimum is sought for in a perfect competition situation, it an instrument used for formal analytical analysis.

According to this allocation of resources or the volume of production is optimal if there is a situation in which it is possible to make any individual better off without making someone else worse off.

conventional environmental economics, public goods, prisoner’s dilemma, Pigovian tax, Coase theorem

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