Environmental Economics




Useful Books


Useful Links

Home page of the Intergovernmental Panel On Climate Change
The 2006 Stern Review of the economics of climate change
2014 Climate Change Report; select the Fifth Assessment Report (AR5)
US Environment Protection Agency
European Environment Agency
UK Environment Agency
UK Department for Environment Food and Rural Affairs
UK Drinking Water Inspectorate – who set & monitor drinking water standards for the UK


Discussion Threads

Pricing raw water correctly

Raw water is hideously mis-priced in southern England: if there are three identical raw water sources, one in wet Northumberland, one in dry Essex, and the other in dry Sussex, the water costs exactly the same per cubic meter from all three sources, despite the fact that raw water is far scarcer in Essex and Sussex. This is because under Section 42 of the 1995 Environment Act the Environment Agency can only make Administrative-cost-recovery charges on its Abstraction licence charges: it cannot make a surplus. More sensible charges would vary around the country according to environmental scarcity, and be related to water abstractors’ opportunity cost of raw water. But at any reasonable rates for these (e.g. the increases in water companies’ long run marginal costs caused by EA licence restrictions) this would result in the EA raising considerable revenues. How terrible for a revenue-hungry Treasury! The benefit would be that raw water would start to be priced correctly in southern England, promoting water trading from areas of water surplus to deficit areas, and optimally incentivising leakage reduction and investment in alternative sources or demand-reduction policies.


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