Civil Engineering Reference
In-Depth Information
to that portrayed by
Figure 9.1.
To correct this misleading picture, environmental
economists usually represent the economic linear system within a larger box, or
circle, to represent the environment. This approach is adopted in
Chapter 11.
It is used to illustrate that there is an interdependent relationship between the
environment and the economy; that the environment provides resource inputs and
carries away the waste outputs and cannot be taken for granted. As an example of a
representation of the environmental approach see
Figure 11.4
(page 184).
Unfortunately, however, the conventional mindset of those presently managing
firms in the construction industry mirrors the approach taken by neoclassical
economists. For this to be replaced with a genuine sustainable perspective,
a commitment to understanding the ideas of environmental economics becomes
most important.
It is worth closing this chapter with the observation that both neoclassical and
environmental economists share a common belief that consumers and producers
express preferences through their willingness to pay. This may appear ironic, but
it seems that in the final analysis most economists are preoccupied with expressing
everything in monetary value. This suits neoclassical economists whose main point
of reference is the trade of material goods and services in markets at specified prices.
It is far more problematic for environmental economists who seek to place monetary
values on environmental goods and services that are commonly treated as 'free'
goods. We shall elaborate on this further in the next chapter and deal specifically
with valuation techniques in
Chapter 11
.
Key Points 9.3
❍
Life cycle analysis involves a detailed study of the impacts of a product
from cradle to grave. In the case of buildings and infrastructure, it
emphasises the large amount of resources and waste that are involved in
the construction process.
❍
Neoclassical economists hold a strong belief that markets steer economies.
❍
Environmental economists emphasise that the economy is dependent on
the environment for several functions that cradle-to-grave analysis helps
to value.
❍
Environmental economics offers the construction industry a perspective
that could help it to secure more sustainable outcomes.
