Introduction

Abstract

Many important environmental problems can be traced back to the use of materials and energy. These link environmental problems of scarcity and pollution to resource extraction and waste emissions. Environmental economics has mainly focused on a partial analysis of environmental problems, as illustrated by separate branches like resource economics’, dealing with depletion issues, and ‘pollution economics’, addressing pollution externalities. As a result, environmental economics tends to neglect the interdependence of environmental problems related to the particular economic stages which occur between extraction of resources and pollution of the environment. Without taking into account the linkages between the separate activities between extraction and waste treatment, the indirect effects of policies may be overlooked. For instance, a reduction in the use of one material to reach a certain level for environmental indicator X may require less use of a particular product, but this may trigger an increase in the use of another product providing the same service but made of another material, and then environmental indicator Y may be negatively affected. Therefore, for policy making it may be important to consider these tradeoffs explicitly.