As the entry on "Economics: Orientation" points out, welfare economics puts the "satisfaction of individual human desires at or near the top of its own internal moral hierarchy." Two economists observe, "The basic premises of welfare economics are that the purpose of economic activity is to increase the well-being of the individuals that make up the society, and that each individual is the best judge of how well off he or she is in a given situation" (Stokey and Zeckhauser 1978, p. 277).

Environmental economics builds on the theory of welfare economics (or microeconomics) and in particular the view—prepresented as an ethical theory—that the satisfaction of preferences taken as they come ranked by the individual's willingness to pay (WTP) to satisfy them is a good thing because (by definition) this constitutes welfare or utility. According to economist David Pearce (1998, p. 221), "Economic values are about what people...