Agricultural Economics Department


Date of this Version

August 2003

Document Type



Published in Cornhusker Economics, 08/13/2003. Produced by the Cooperative Extension, Institute of Agriculture and Natural Resources, Department of Agricultural Economics, University of Nebraska–Lincoln.


Environmental goods and services often have characteristics which make it necessary to publicly provide them at no direct cost to the users or beneficiaries. With environmental goods and services, or more generally public goods, charging people for the product in a private market context is usually inefficient because of low marginal costs, and often not possible because those who don’t pay for the good cannot be excluded from its benefits. As a result, historically most environmental goods have been publicly provided via public investment, law, regulatory action or some combination of regulatory and investment programs.