The public concern that has been created in relation to the environment over the last week tempts one to suggest a list of measures that could start to address the issue. However, there needs to be a common understanding of what the real issue is.

Is construction of new buildings or the refurbishment of existing ones the problem? Is traffic a problem? Is the reduced extent of open spaces for leisure purposes a problem? And what about the cleanliness of the air? Are waste landfills a problem? What are we really talking about?

For every proposal there is a counter argument, because the environment has an economic cost and an economic benefit.

We could take the decision to stop new construction or we could take the decision not to allow any more development of tourism and leisure facilities. We could introduce legislation that would reduce the level of dust in the air or reduce carbon emissions. We could also take steps to reduce traffic congestion.

We could do all this and still we would not have consensus about anything because we all interpret the environment issue in terms of what is in it for me.

One simple example is waste landfills. We all believe that there need to be waste landfills and we were all upset about the Maghtab landfill. However, there is certainly no consensus as to where a new landfill should be located.

There can never be a consensus about the solutions to the challenges posed by the environment issue because it deals with the most classical of all economic problems - scarcity and opportunity cost. Therefore, I strongly believe that we need to discuss the environment in economic terms, because whatever is decided on this issue has an economic impact. It will mean more or less economic wealth being created, more or less jobs being created.

Thus, since no one has as yet provided a better solution to economic problems, we need to resort to the price mechanism that determines supply and demand for a solution.

If we accept that economics is about making the most of what we have, then every society, including Malta, must answer the question whether to make the maximum use of the land space we have now, or should we restrict the use we make of land space so that enough is left available for future generations.

This leads to the issue of scarcity in that resources related to the environment are limited in supply but people's wants seem to be unlimited. This forces us to make choices and, for every choice that we make, there is an opportunity cost. What are we giving up every time we make use of a resource related to the environment?

At this stage it needs to be stated that even air has an opportunity cost, because clean air comes at a cost.

Once we recognise that, with regard to the environment, there is an opportunity cost for every choice that we make, then we should use the price mechanism so that people make choices that are environment friendly. The private sector is already making very good use of the price mechanism and some are making handsome profits.

Just consider the price of land in certain residential areas, as an example. I believe that the government should likewise resort to the price mechanism to make the polluter pay and to restrict the wastage of resources.

There are a number of initiatives that can be taken to tap fully the price mechanism such as a significantly larger road tax for road vehicles whose engine exceeds a certain size; a tax for dwellings that have a swimming pool or that exceed a certain size; an increased charge for using the moorings provided at the yacht marinas; a windfall tax on the sale of land or properties situated in the areas that have just been included in the development zones; an increased fee for entertainment outlets that remain open beyond a certain time of the day.

All these initiatives could provide additional revenue for the government that could then be used in embellishing the environment or in environment protection measure. Thus we could argue till we go blue in the face as to whether we need more or less development of property for residential use, or whether the air and the sea is clean enough, or whether we should leave a better environment for our children.

At the end of the day, I believe that it is an economic issue and we should use the price mechanism to achieve the objective of a healthier, safer and more friendly environment.