2 - Environmental Harm and Efficiency

Summary

This book covers the fundamental principles of environmental law; how they can be reframed from a rational actor perspective. The tools of law and economics can be brought to bear on policy questions within environmental law. The approach taken in this book is to build on the existing consensus in international environmental law and to provide it with new analytical tools to improve the design of legal rules and to enable prospective modelling of the effects of rules in pre-implementation stages of evaluation and deliberation. The Pigouvian idea of environmental injuries as economic externalities. The core idea of Pigou’s model is that manufacturing costs that are excluded from the decision-making process will inherently not be reflected in the decision making of producers, and thus, manufacturing costs will be incorrectly perceived as lower than they actually are. The key is to ensure better decision making and to prevent environmental injuries by ‘internalising’ the cost externalities. Rational actors, forced to bear the costs of the injuries resulting from their production activities, will set optimal levels of production inclusive of minimising the costs of pollution injuries via reducing the incidence of those pollution injuries