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Name: Institution: Course: Tutor: Date: Environmental Economics Introduction In order to attain sustainable economic growth and development, the environment needs to be put in consideration when making major economic decisions. This is because the resources that the economy employs are largely derived from the environment…
To a great extent, this has impacted on the quality of life of the population. The market economy has various implications on the general wellbeing of the environment. Relative effects are both negative and positive. Although negative effects are apparent in the short run, positive effects are more pronounced. It is against this background that this paper reviews the impacts of the market economy on environmental protection. To enhance a harmonic view, it begins by reviewing the negative effects and then proceeds to evaluating the positive effects. The market decisions place emphasis on increased production. According to Morgen, Pizer and Shih (1998), increased economic production implies an increase in production of wastes. This contributes to environmental pollution and resource depletion. Although incomes are likely to rise, environmental protection remains at risk. Under-valuation of natural resources has made it difficult for the environmental damages to be addressed effectively. The profits that firms and producers enjoy are not reflective of the environmental damages that production processes impose on the environment. In this consideration, market decisions compromise the wellbeing of the environment. In his research, Kolstad (2010) indicates that the market economy has had significant negative effects on the holistic wellbeing of the environment. ...
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