ABSTRACT
A central point of contention between social ecological economics and standard environmental economics concerns the question how far, if at all, markets and market mimicking procedures are appropriate for solving environmental problems. Standard neo-classical environmental economics claims that the source of environmental problems lies in the fact that preferences for environmental goods are not reflected in monetary prices, and correspondingly that their solution requires the pricing of all environmental goods and bads. The extension of markets can take place directly through the construction of markets (e.g., tradable emissions permits). Alternatively, it can occur indirectly by calculating shadow prices for environmental goods for the purposes of cost-benefit analysis (CBA), employing either preferences revealed in market behaviour (e.g. travel costs or property markets), or stated preferences about hypothetical changes (e.g. contingent valuation).
