The environmental challenges which we face do not require a wholesale realignment of our economies. Rather, they require an extension of the legal principles of capitalism. Property rights can be extended to presently unowned resources. Where this solution is impractical, market-mimicking policy rules (eg, effluent charges or marketable pollution permits) may be used to force polluters to take into account the social costs of their production processes. In short, the market can and should be extended to areas where it is presently absent.
Despite widespread belief to the contrary, a market economy and a clean environment are not mutually exclusive. This report, by offering market solution to market failures, will attempt to dispel this misconception and provide a sound theoretical and policy basis for market environmentalism.
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