Want to know if trade will cost the earth?

From humble beginnings in the Sixties and Seventies, environmental economics has grown to become a major sub-discipline of economics. It is taught at undergraduate level in all good universities, but only a few institutions offer it at graduate level. Understandably, then, of the nearly 30 textbooks on the subject produced since 1990, not many are aimed at graduates. Of those, Philip Neher's Natural Resource Economics: Conservation and Exploitation (1990) remains the best, although it is limited in scope.

This new text by Quentin Grafton and his colleagues is therefore to be more than welcomed. It is best seen as a collection of separate "essays" on the major areas of environmental and resource economics rather than a text in a continuous flowing style. But it is very valuable nonetheless.

After covering the basic economics of pollution control, it then moves to the economics of fisheries, forests, water and exhaustible resources. There is a lengthy set of chapters (about 100 pages) on the theory of economic valuation (placing monetary values on individuals' preferences for environmental improvements), and the volume closes with some selected applications - biodiversity, global issues, trade and the environment - and issues relating to the links between growth and the environment and environmental accounting.

Students will particularly welcome the chapters on forests and biodiversity because they contain up-to-date material on some of the big debates taking place in those areas. For example, economists dispute the magnitude of the economic values that might be attached to genetic information for use in developing pharmaceutical drugs; and the arguments over this issue are treated nicely in this section of the book.

The valuation chapters are also useful in guiding the student towards some of the newer techniques that involve choice models; in these, respondents to a questionnaire choose between alternative options, which allows the analysts to infer the respondents' monetary valuations of the options and their characteristics.

Inevitably with such a rapidly developing and expanding subject, some of the issues are treated only lightly, and there are major omissions in other areas. Even so, here is a relatively inexpensive volume that can be dipped into and used as the occasion arises. While the undergraduate environmental economics market is getting crowded, the authors of this text have cleverly targeted their contributions one level above - where it is needed.

Postgraduates will find it useful as a guide to the wider literature, which inevitably remains largely confined to journals. Smart undergraduates will also find it very beneficial for going that extra mile to a first-class mark. None of the mathematics is overwhelmingly difficult. Finally, the authors have listed a large number of web pages so that readers can access real-world examples and material.

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