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SCHOOLS OF ECONOMIC THOUGHT ON ENVIRONMENTAL SUSTAINABILITY 45
Marshall’s attitude to the scarcity of resources accurately characterizes the
predominant contemporary position. This is particularly true when the value of
natural resources is to be incorporated in market prices in order to achieve more
realistic prices that motivate innovations. However, some of Marshall’s valuable
insights into the economic role of natural resources are echoed mainly by the more
alternative variants of mainstream economics. Unfortunately, compared to classical
economists, Marshall devoted too little attention to the scarcity of resources, and
this might have also contributed to the fact that mainstream neoclassical economics
do not consider this field worthy of serious attention (Barbier 1989: 18-19).
The background of environmental economics
The school of economic thought which accepts the foundations of neoclassical
economics but which displays a greater interest in environmental problems usually
goes by the label environmental economics in the academic literature. Its first
important representative was perhaps Marshall’s student Artur C. Pigou. His work
The Economics of Welfare, published in 1920, contains the foundations still used
in taxing production (or pollution) today. Its aim is that the costs caused by an
activity external effects? should be paid by the producer, and, indirectly, be
reflected in the price of the product. The objective is to use administrative tools
(e.g. taxation) to close the gap between the private and social costs (Turner et al.
1994: 4-5). This means that — according to environmental economics — society
may burden and pollute the environment, but care must be taken that the
magnitude of this activity remain at optimal levels on the basis of cost-benefit
analyses.
Ronald Coase added an additional consideration to the handling of externalities,
namely that — in the case that the rights of ownership (or, in lieu of it, of disposal)
are well defined throughout the economy — the parties intent on profit maximization
should launch spontaneous bargaining. As a result, the size of the externalities will
automatically settle on the social optimum, without any special state intervention.
The economic policy instruments of environmental economics are summed up
in the regulatory matrix of environmental loads (Kocsis 2002, Kerekes et al. 2018:
152-156).
The foundations of the neoclassical economic approach to non-renewable
resources (e.g., mineral stocks) were laid by Gray in 1914 and Hotelling in 1931,
while the general economic rules of the optimal use of renewable resources (e.g.,
fishponds, forests) were first described by Gordon in 1954 (Turner et al. 1991:
5-7). This trend makes considerable efforts to evaluate diverse natural resources
in monetary terms. The aim here is to extend the advantages of the market operation
to this area as well (Marjainé Szerényi 2001; 2011).
The externalities affect the wellbeing of a person (or persons) not involved in a given economic
transaction, for which they receive no compensation. It is important that the effect is not deliberate
but rather forms an inherent by-product of the production process (e.g. smoking smokestacks)
(Baumol — Oates 1988: 17-18). More recently, externalities (or external costs) have been interpreted
according to place, time and ,,degree of familiarity” as well (Kerekes et al. 2018: 170-173; Kocsis
— Kuslits 2019).