Environmental goods are typically non-market goods, including clean

air The atmosphere of Earth is the layer of gases, known collectively as air, retained by Earth's gravity that surrounds the planet and forms its planetary atmosphere. The atmosphere of Earth protects life on Earth by creating pressure allowing f ...

, clean

water Water (chemical formula ) is an inorganic, transparent, tasteless, odorless, and nearly colorless chemical substance, which is the main constituent of Earth's hydrosphere and the fluids of all known living organisms (in which it acts as a ...

landscape A landscape is the visible features of an area of land, its landforms, and how they integrate with natural or man-made features, often considered in terms of their aesthetic appeal.''New Oxford American Dictionary''. A landscape includes the ...

, green transport infrastructure (

footpaths A footpath (also pedestrian way, walking trail, nature trail) is a type of thoroughfare that is intended for use only by pedestrians and not other forms of traffic such as motorized vehicles, bicycles and horses. They can be found in a wide v ...

cycleways Cycling infrastructure is all infrastructure cyclists are allowed to use. Bikeways include bike paths, bike lanes, cycle tracks, rail trails and, where permitted, sidewalks. Roads used by motorists are also cycling infrastructure, except wher ...

greenways Greenway or Greenways may refer to: * Greenway (landscape), a linear park focused on a trail or bike path * Another term for bicycle boulevards in some jurisdictions People * Greenway (surname) Places Australia * Electoral Division of Greenway ...

, etc.),

public park An urban park or metropolitan park, also known as a municipal park (North America) or a public park, public open space, or municipal gardens ( UK), is a park in cities and other incorporated places that offer recreation and green space to re ...

urban parks An urban park or metropolitan park, also known as a municipal park (North America) or a public park, public open space, or municipal gardens ( UK), is a park in cities and other incorporated places that offer recreation and green space to re ...

river A river is a natural flowing watercourse, usually freshwater, flowing towards an ocean, sea, lake or another river. In some cases, a river flows into the ground and becomes dry at the end of its course without reaching another body of wate ...

mountain A mountain is an elevated portion of the Earth's crust, generally with steep sides that show significant exposed bedrock. Although definitions vary, a mountain may differ from a plateau in having a limited Summit (topography), summit area, and ...

forest A forest is an area of land dominated by trees. Hundreds of definitions of forest are used throughout the world, incorporating factors such as tree density, tree height, land use, legal standing, and ecological function. The United Nations' ...

s, and

beach A beach is a landform alongside a body of water which consists of loose particles. The particles composing a beach are typically made from rock, such as sand, gravel, shingle, pebbles, etc., or biological sources, such as mollusc shel ...

es. Environmental goods are a sub-category of

public goods In economics, a public good (also referred to as a social good or collective good)Oakland, W. H. (1987). Theory of public goods. In Handbook of public economics (Vol. 2, pp. 485-535). Elsevier. is a good that is both non-excludable and non-riva ...

. Concerns with environmental goods focus on the effects that the exploitation of ecological systems have on the economy, the well-being of humans and other species, and on the environment. Users not having to pay an upfront cost and external factors like pollution that can damage environmental goods indefinitely are some of the challenges in protecting environmental goods.

Valuation

There have been many efforts to place an economic value on environmental goods, but no consensus yet exists on the method of valuation. The challenges in the way of obtaining these economic values include the

free-rider problem In the social sciences, the free-rider problem is a type of market failure that occurs when those who benefit from resources, public goods (such as public roads or public library), or services of a communal nature do not pay for them or under-p ...

, difficulties in assigning ownership, and the non-divisibility of environmental goods.

Methods

Assigning a

willingness to pay In behavioral economics, willingness to pay (WTP) is the maximum price at or below which a consumer will definitely buy one unit of a product.Varian, Hal R. (1992), Microeconomic Analysis, Vol. 3. New York: W.W. Norton. This corresponds to the st ...

to environmental goods is one method that economists use to try to assess their value. Small scale simulated markets have been used in conjunction with contingent valuation methods in order to assess the relative values of economic goods, as well as to attempt to assign them dollar values. Other studies criticize these methods for expecting an unrealistic amount of mental effort on the part of the subjects who are asked to assign values, as well as for introducing framing effects and inherent biases relating to subjects' perceptions of dollar values.

Measures of economic progress

Alternative measures of economic progress, including the Genuine Progress Indicator,

Gross National Happiness Gross National Happiness (GNH), sometimes called Gross Domestic Happiness (GDH), is a philosophy that guides the government of Bhutan. It includes an index which is used to measure the collective happiness and well-being of a population. Gross Nat ...

, and

Gross National Well-being Gross National Well-being/Wellness (GNW) or Happiness (GNH) a socioeconomic development and measurement framework. The GNW/GNH Index consists of seven dimensions: economic, environmental, physical, mental, work, social, and political. Most wellnes ...

factor living environmental wellness, ecological vitality, and the effects of

resource depletion Resource depletion is the consumption of a resource faster than it can be replenished. Natural resources are commonly divided between renewable resources and non-renewable resources (see also mineral resource classification). Use of either ...

and long-term environmental damage into their models. These metrics aim to categorize not only the economical and monetary values of environmental goods and services, but also their effects on the emotional and psychological well-being of individuals within a society.

Trade definition

In trade documents released by the United States, "environmental good" primarily refers to goods that are used for preserving the environment, such as renewable energy technologies and pollution management systems. In 2015, the U.S. exported $238 billion of environmental goods, while trading among nations globally of environmental goods totaled around $1 trillion. The United States and the

World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade. With effective cooperation in the United Nations System, governments use the organization to establish, revise, and e ...

(WTO) and aims to lower tariffs on environmental goods in hopes of increasing the United States' access to more sustainable technology.

Environmental Goods Agreement

Delegates from 17 members of the WTO have been negotiating the Environmental Goods Agreement in hopes of cutting tariffs on many environmental goods. The negotiation aims to increase the transfer of technologies which are cleaner for the environment and more cost competitive, including technologies in the realm of air pollution control, waste treatment, renewable energy, and environmental monitoring, and energy efficiency. The WTO hopes to provide higher-quality environmental goods at cheaper costs and to help developing countries to expedite the process of obtaining cleaner technologies. This agreement also aims to lower costs of environmental protection, and to provide "green" jobs to people around the world.

References