Business is increasingly being held accountable for the social and environmental implications of its activities. Managing these diverse interactions can be very complex. Environmental economics is an approach to reconciling financial objectives with social responsibilities. It describes techniques for capturing a monetary value for the environment and therefore, a monetary value for impacts on the environment. In this way, environmental considerations are brought into perspective for business. Another tool that is used for integrating environmental considerations in business decisions is multi-criteria assessment. The difference between these two tools is illustrated when business makes the transition from a qualitative approach (considering environmental impacts) to a quantitative one (financially accounting for environmental impacts). Policy-makers concerned with the management of natural resources are increasingly causing businesses to make this transition through the use of economic instruments. This paper discusses how environmental economics can be used to bridge the traditional separation of economic and environmental considerations. Reference is made to international experience in the chemical processing industry.

You do not currently have access to this content.