“If Hayek and Coase were Environmentalists: linking economics and ecology” (Terry Anderson, Hoover Institution, February 2015, 32 pp.)
This essay argues that the focus of ecology and economics on equilibria and externalities misses the dynamic connection between humans and nature and that there is a better alternative for linking ecology with economics, one that builds on the teachings of Nobel laureates Friedrich Hayek and Ronald Coase.
It emphasizes the role of property rights and markets and consider that transaction costs are institutional failures, kind of niches which can be filled by “enviropreneurs who see opportunities in what environmental economists call externalities” to a certain extent akin to Darwinian evolution of species.
Reading this paper is not easy and one must be familiar not only with Hayek and Coase but also with Pigou, Demsetz, Hardin….and complements “Environmental markets: a property rights approach” (Anderson & Libecap, 2014) aleady reviewed.
