Second, environmental impacts can be long run and cumulative, so that even ZPG can gradually degrade the environment in which it finds itself.

perverse incentives—that is, incentives created by a policy that actually work against the overall objectives of that policy.

An incentive is something that attracts or repels people and leads them to modify their behavior in some way. An economic incentive is something in the economic world that leads people to channel their efforts at economic production and consumption in certain directions.

with conventional “command-and-control” policies. This relies on laws and regulations that directly or indirectly specify pollution-control technologies or practices that polluters should use.

Environmental economics is the application of the principles of economics to the study of how environmental resources are managed.

The “us-versus-them” quality that characterizes many environmental disputes is really an internal disagreement within a single group. Society as a whole is essentially in the same position as a single household that pumps water from its own well and discharges wastes into its own septic system, which happens to be near the well.

Sustainability does not mean that resources must remain untouched; rather, it means that their rates of use must be chosen so as not to jeopardize future generations.

The reason for this is that we want to reveal basic connections and relationships among the important elements of a problem, relationships that are difficult to see if we just observe the surface richness of the real world.

To study economics is to study the way an economy and its institutions are set up, and how individuals and groups make decisions about transforming and managing scarce resources to increase human wealth,