A problem of externalities

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Written by Ricardo Rayon

The issuee boils down to the fact that the world is losing species and ecosystems because the economic system has a blind spot.  It says that building a shopping mall to sell iPods is more valuable than having a wetland that buffers coasts against storms, filters water, and provide nesting grounds for birds.  The fact that the U.S. suburban landscape appears to have more bowliing alleys than wetlands is simply a symptom of an economic system that has its values--used here in the sense of its prices--all wrong.  It is what economists call a problem of externalities.

Ricardo Rayon, State of the World 2008, p.123. 

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