Grounds for regulation and intervention in environmental matters: view of environmental and ecological economics
by Roberto Fernandez Gago, Federico Marbella Sanchez
International Journal of Global Environmental Issues (IJGENVI), Vol. 1, No. 1, 2001

Abstract: The view taken by environmental economics of the environment tends to see it as having certain characteristics. Among these are that it is a free good, inexhaustible, belonging to nobody and without any form of regulatory price, in the absence of an exchange value. These characteristics lead to indiscriminate use and exploitation beyond what would be socially desirable, giving rise to negative externalities. Moreover, the absence of any contractual relationship between the numerous economic agents taking advantage of the environment, the difficulty of identifying them and of formalising and guaranteeing their respective obligations render unworkable potential negotiated solutions aimed at reducing undesirable economic effects (negative externalities). This justifies intervention and regulatory actions on the part of the authorities. For ecological economics, the environment interacts with the economic system through physical flows. It provides resources for productive activities and receives the residues arising from extraction, transformation and consumption processes. The links between the two systems raise questions of continuity or survival when an objective of uninterrupted growth in the economic system exhausts the resources the environment can provide. The matter should be considered in terms of sustainable development. Resolution of the problem through development that can be sustained requires the aim of economic growth to be made compatible with ecological equilibrium, sustained by the dynamic balance of physical variables. Fixing economic objectives and physical limits calls for multidisciplinary actions that would be hard to achieve and get accepted without regulatory intervention by the various States concerned. The problem of the environment exists at a global level and hence requires standards to have a worldwide homogeneous dimension, since there is no justification for fixing differing ecological objectives. In the European framework, there is broad consensus as to the need for homogeneity in environmental standards. The European Community Treaty assigned to the Community itself the mission of encouraging growth that would be sustainable and non-inflationary and respect the environment. In the case of Spain, the Constitution fixes the principles of the regulatory framework, imposing on the authorities responsibility for rational use and conferring on them powers to impose sanctions to this end. This framework is rounded out by standards set at State level and by the various Autonomous Regions in accordance with the division of competences envisaged by the Constitution itself.

Online publication date: Mon, 18-Aug-2003

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