On the costing of the earth

The economics of natural resources and the environment is now a sophisticated subject within economics, and the past decade has seen a plethora of undergraduate and graduate textbooks on the subject.

More than a decade ago, Jon Conrad, professor of economics at Cornell University, wrote a highly condensed and mathematical text with Colin Clark from the University of British Columbia ( Natural Resource Economics: Notes and Problems, 1987 ). Conrad has now produced a far more digestible and excellent text that will be suitable for the best of the undergraduates and all the graduates taking this increasingly popular subject. The novelty of the text is that the reader follows the book through by putting the problems into Excel and solving them. Given students' almost universal use of Excel, this is a valuable innovation.

Attractive, too, is the derivation of major theorems without the reader getting lost in fine detail. The topics covered include those one would expect: the economics of forest use, fisheries, "the mine" (non-renewable resources) and pollution. But Conrad goes further and deals with the elements of cost-benefit analysis and the economic valuation of environmental damage.

The only sense of unease comes with the final chapter on sustainable development, or coevolution, in essence a path of economic development in which environmental assets are also conserved. The chapter focuses on some interesting issues but seems to neglect much of the literature that has tried to make the concept of sustainability operational in terms of revised measures of gross national product or savings. Nonetheless, this small book is thoroughly welcome, and one can anticipate lots of student essays where Conrad's proofs will be trotted out verbatim. So long as they understand it all, who can blame them? It will be a tribute to Conrad's excellent precision and clarity.

David Pearce is professor of environmental economics, University College London.