Start with Stephen Smith's Environmental economics, an Oxford Very Short Introduction of about 140 pages that gets externalities, taxes, tradable permits and non-market valuation across without a single equation you have to solve. If you want something longer but still readable, Markets and the environment by Nathaniel Keohane and Sheila Olmstead is the standard non-technical introduction and covers the same ground with real policy cases.
The mistake people make is opening with the climate books. The Stern-Nordhaus argument is about discount rates and the social cost of carbon, and it is close to unreadable until you already know how those numbers get made. Learn the machinery, then read the fight.
The textbook layer
Tom Tietenberg wrote two of the books here and you want one, not both. Environmental economics and policy is the shorter version aimed at non-majors and policy students; Environmental and natural resource economics is the full course text, adding fisheries, forestry, minerals and energy. Pick by whether you need the resource half.
Intermediate Environmental Economics by Charles Kolstad is a real step up: it assumes intermediate microeconomics, uses calculus, and derives results rather than describing them. It is the right book if you intend to read journal articles afterwards and the wrong one if you do not.
Economics of the Environment is not a textbook at all — it is Robert Stavins's edited reader of selected papers, most of them the original articles the textbooks are summarising. Read it alongside a text, not instead of one.
Putting numbers on things nobody sells
The hard part of the field is valuation: what is a wetland worth, or a view, or a statistical life. Nature's services, edited by Gretchen Daily in 1997, is the volume that launched the ecosystem-services framing now used by governments everywhere; it is an edited collection of essays by ecologists and economists together, so the quality varies by chapter.
Priceless by Frank Ackerman and Lisa Heinzerling is the case against, and you should read it. It argues that cost-benefit analysis of health and environmental rules is not the neutral arithmetic it presents itself as, and it attacks the practice of monetising lives directly. Economists have answered it, mostly by arguing that the alternative to explicit numbers is implicit ones. The disagreement is live and worth watching both sides of.
The climate argument
The Economics of Climate Change is the Stern Review — a report commissioned by the UK Treasury, published in 2006, and much longer than most readers expect. Its conclusion that strong immediate action is cheap relative to the damages rests heavily on a very low pure rate of time preference. Climate Casino is William Nordhaus writing for general readers from the other side of that argument: a higher discount rate, an integrated assessment model, and a policy ramp that starts modestly and steepens.
Neither is a knockdown. The dispute is partly technical and partly ethical — how much weight the present owes the future is not a question economics can settle from inside. Read both and you will understand the shape of it.
Climate Shock by Gernot Wagner and Martin Weitzman reframes the whole thing around tail risk: what matters is not the expected warming but the small probability of catastrophic warming, which makes the case for action look more like insurance than investment. The case for a carbon tax by Shi-Ling Hsu is advocacy, and says so — a lawyer-economist arguing the instrument choice against cap-and-trade and regulation.
Two positions from outside the mainstream
Free market environmentalism by Terry Anderson and Donald Leal argues from property rights and common-law remedies that environmental problems are mostly failures of ownership rather than failures of markets. It is a minority position among environmental economists and is written to persuade. Natural Capitalism by Paul Hawken, Amory Lovins and L. Hunter Lovins is business-facing advocacy, strong on efficiency case studies and weak as an analytical text.
Read the list in order and the environmental law shelf will make far more sense afterwards — most of these instruments only exist because a statute created them.
Follow the full ordered path here: Environmental Economics Books: What to Read, in Order.
