The Coase Theorem and planning for sustainable development

For those interested; there is an excellent article by Lawrence Wai-chung Lai and Frank T Lorne available in the Town Planning Review Vol. 77, 1, 00041, 2006 (http://www.townplanningreview.org/)

This paper discusses the potential contribution and limitations of the Coase Theorem to the theorisation of sustainable development. The Coase Theorem can be manifested in numerous ways beyond the hypothetical example of direct negotiation between the polluters and the pollutees. Sustainable development not only provides a negotiative context, an infrastructure where compensation in the Coasian sense can be made, but also a framework for transforming negative externalities into positive externalities, as illustrated by a real life example from Canada. Central to the framework is a change in the mindsets of parties to a negotiation and Schumpeterian innovations.

Those in my DIT economics class should read this!