HISTORICAL ASPECTS OF THE ECONOMIC FOUNDATIONS OF CONTEMPORARY ENVIRONMENTAL LAW

Contemporary environmental law is deeply embedded in economic theory, particularly in the analysis of market failures, welfare optimization, and institutional design. This study examines the economic foundations of environmental law through a theoretical and analytical framework grounded in the law-and-economics tradition and institutional economics. Rather than relying on empirical data or econometric estimation, the paper adopts a conceptual approach that classifies environmental problems according to well-established categories of market failure, including negative externalities, public goods, common-pool resources, and non-market values. Building on this classification, the study evaluates the principal regulatory instruments of environmental law—command-and-control regulation, Pigouvian taxes, tradable permit systems, subsidies, and deposit-refund schemes—by examining their theoretical efficiency, incentive structures, distributional implications, and dynamic effects on innovation. Particular attention is devoted to the role of institutions and governance, emphasizing property-rights allocation, regulatory credibility, and policy stability as critical determinants of regulatory effectiveness. The analysis is complemented by conceptual visual frameworks that synthesize the alignment between economic problem structures and legal instruments. The research argues that environmental law is best understood as a hybrid system in which economic logic, legal normativity, and institutional constraints interact. Its contribution lies in offering a coherent conceptual framework that integrates economic reasoning into environmental legal analysis, thereby providing a foundation for future empirical research and policy evaluation.