One of the first environmental economics book that I read was Terry Anderson and Donald Leal's Free Market Environmentalism. This book's clear cases helped me to appreciate the power of Coasian logic in understanding environmental challenges. I first met Terry Anderson back in 2003 and over the years I have had the chance to speak to him on many occasions. For those who read the Wall Street Journal, Terry has long been a contributor to its Opinion Page. For decades, Terry served as the President of PERC and his effort created the nation's leading think tank in applying neo-classical economics to key environmental and natural resource issues. Of course, I am a fan of Resources for the Future but I "vote with my feet" to spend my time in Bozeman, MT. I look forward to returning there very soon. The PERC economists and lawyers have a logical world view and an optimistic vision for achieving the "win-win" of economic growth, rising living standards and environmental protection. Read some of PERC's reports to judge for yourself.
Clearly defined Property rights and trade create amazing possibilities. So much of modern politics is really a fight over property rights and attempts by interest groups to rewrite the "old rules". If we could agree on who owns what and promise to not renege on this deal, I bet that this alone would at least double the world's annual economic growth rate. Why? In a world of respected private property, there would be no war and no theft. Such agreed upon contracts would mean that costly self protection (i.e guarding your stuff, paying cops) could vanish and the absence of theft would effectively be a tax reduction for those who generate income, this in turn would generate greater wealth and trade and growth. The existence of private property would negate the Tragedy of the Commons challenge. Would inequality rise? Yes, but poverty would decline and environmental protection would sharply increase. So, collectively --- what are we trying to maximize as we set up the "rules of the game"?