Environment and how its issues should be tackled through public policy

Excerpts of a lecture delivered at Sri Jayewardenepura University – Part I

- By W.A. Wijewardena

ENVIRONMENT consists of all endowments which nature has bequeathed to organisms so that they could arise, coexist and, eventually as Nature has dictated, decay into oblivion.

These endowments cover a wide range of natural phenomena such as different organisms themselves, atmosphere, hydrosphere, earth including its minerals, sunlight, etc. Man, like other organisms, has been liberally using the environment for his living, ever since he came into existence on the earth. Yet, the very same man has been expressing concern about the degradation of the quality of the environment, sometimes actual and sometimes imagined, threatening, in his view, the sustainability and continuity of the living on the earth. Environmental degradation has no territory and, therefore, spills over the entire globe. 1

This concern has led to local, regional and now global action for the protection and preservation of the environmental quality. 2 Action taken to safeguard environment is a public good to be produced by the government since the private sector does not allocate sufficient resources for this work. Such action taken globally by the global community is a global public good and locally within the territory of a sovereign state is a local public good to be produced by the local sovereign government. Thus, it comes within the purview of public policy of sovereign governments. This article will identify the economics of environment and review the main issues that arise out of such economic principles for the formulation of public policy towards environment.

An essential input

From the point of view of economics, environment is an essential input used for all the three major activities in an economy: production, distribution and consumption.3 What this means is that no activity can be undertaken without the use of environment. It occurs due to the following nature of the economic activities that are being undertaken in an economy for the benefit of mankind.