Environmental economics is a branch of economics focusing on the development, evaluation and application of economic concepts and techniques to environmental issues and policy issues. It focuses on environmental costs and benefits analysis, the valuation of resources and their utilization and the design of incentives and regulatory policies to promote sustainable economic development.
Environmental economics is concerned primarily with the monetary value of environmental products and services. It is a matter of determining whether consumers are willing to pay for products or activities which are environmentally friendly (WTP) or not (WTA). These valuations are essential to making sure that market allocations are efficient. They are also crucial to understanding externalities which refer to the inability of the market to account for certain impacts human activities impact others. A person purchasing timber may not consider the impact of water seepage on lower floors in adjacent houses. A business that pollutes may not consider the health consequences to other people.
The issue of valuing non-marketable assets is a different issue in environmental economics. It was this concern that started the first environmental revolution triggered by Rachel Carson’s Silent Spring in 1962. It was during this time that economists began to connect the theory of https://recyclefortamworth.co.uk/2023/06/16/environmental-economics/ external effects with an economic understanding of environmental issues.
Ecological economics is the study of the interconnectedness of biological systems and the impacts humans have on them. It is an interdisciplinary field that has been criticized by researchers from other fields, including Marxists and critical geographers for not taking into account the human interaction with the natural environment in its analysis.