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Mahtab Ali Larik

Writerbay.com

Environmental Economics

July 17, 2023

Disadvantages of Market Environmentalism

Introduction

Market environmentalism is a broad set of ideas centered on the market, as a most important

mechanism, for regulating the use of resources and solving environmental problems. Some of its

key concepts, which hold it as an effective mechanism, are as follows.

● The use of resources will change along with the change in market signals (Elliot 49). For

example, when resources become scarcer, competition will increase, and prices will rise,

then the use of resources will decline due to low demand because of high prices.

● There is an economic incentive to develop substitutes and increase efficiency in the use

of resources.

● Putting a value on environmental goods and services ensures that the market can operate

efficiently.

Under this mechanism, privately owned resources are efficiently managed, conserved, and

used. While on the other hand, open-access resources are liable to over-exploitation and

degradation (Elliot 48). Furthermore, the private sector is often more responsible than the

government. So they will be accountable for demands and any damage to the environment.

Along with this, private corporations are well at sustainably using natural resources. So they can

get more benefits with no loss in return.

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Disadvantages

Market environmentalism emphasizes valuing the environment and natural resources by

economic valuing policy and handing it to private corporations to conserve and use resources

efficiently (Roach 7). Most environmentalists, people working for the environment, consider it

the best step to protect the environment. On the other hand, analyzing this policy from a

pluralistic point of social and environmental consequences reveals more facts than just the

protection of the environment. Placing a monetary value on environmental goods and services

could be a better step but not the best. Behind this single benefit, it has the following

consequences.

● Environmental goods and services are gifts of nature, so everyone has the right to enjoy

them without discrimination. However, placing monetary value would create

discrimination using these gifts of nature. For example, some people who have financial

capability will enjoy more natural resources than those who are merely living for

subsistence. Such a step will make an environmentally rich and environmentally poor

class in society. Socially elite class citizens will have easy access to natural gifts, while

poor and middle-class people will experience deprivation in using natural resources.

● Placing a monetary value on natural goods will increase the cost of production and would

impact on prices of goods in the market. For example, if farmers are charged some

price/per liter for water consumption, they will sell their agricultural product at a price

where they could reap benefits after meeting all the production costs. As a result,

vegetables and other goods produced from natural resources will be expensive. Similarly,

industries that use natural resources to manufacture their goods will increase the rate of

their products to get benefits after subtracting the higher cost of production and tax.
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● Placing monetary value over environmental goods can easily make some countries

ecologically bankrupt. Underdeveloped countries that cannot pay their debt will sell their

natural environment to pay the debt.

● The high cost of production and lower benefits from agriculture will discourage farmers.

Consequently, decreased or zero agricultural activity in fertile lands will invite urban

expansion.

● Natural assets with high value will be conserved, and those with lower importance in

human life will face extinction, such as some species of birds, animals, insects, plants,

etc.

● Placing an economic value on natural goods and services resembles selling the

environment in the market, which is a financial policy, not an environmental policy for its

conservation. Instead of conserving the environment, this approach will lead to control of

the environment by those individuals or countries having financial abundance by

depriving poor people of natural resources.

Conclusion

This approach has harmful impacts in comparison to its single benefit. So, for the

conservation of the environment and natural resources, we should regulate industries for the

betterment of the environment and efficient use of natural resources, promote other

environmental policies and protection measures, providing subsidies to firms and industries on

their pro-environmental actions and initiatives, changing tax policies instead of placing monitory

value. Along with this, we should follow reduce, reuse, and recycle approach to conserve the

environment and ensure sustainable use of natural resources.

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Works Cited

Clive L. Spash. Ecological Economics Nature and Society. New ork: Routledge, 2017. English.

Elliot, Jennifer A. An Introduction to Sustainable developement. Fourth. London: Routledge,

2013. English.

Roach, Jonathan M. Harris and Brian. Environmental and Natural Resource Economics. New

York: Routledge, 2018. English.