What Are the Different Aspects of Environmental Economics?

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  • Written By: Jan Fletcher
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  • Last Modified Date: 17 September 2019
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Different aspects of environmental economics may involve analyzing costs of waste recovery and disposal, or calculating the financial impact of protecting and restoring an environment or ecosystem. The cost of environmental degradation to public health and wildlife is another area often studied by environmental economists. Quantifying the economic impacts and return on investment (ROI) for energy generation alternatives to fossil fuel and calculating the costs of energy conservation efforts are other topics the study of environmental economics may include. Economists may sometimes conduct economic analysis to determine the impact of using cropland to produce biofuels.

Efforts to reduce or recover waste are often incentivized following an economic analysis. Once an analysis is undertaken, various economic gains may become more apparent. For example, a paper products manufacturer may conduct an economic analysis to determine if greater cost savings can be realized by incorporating a certain percentage of discarded cardboard into manufactured products, instead of using all-virgin material. Recycled material may cost less, and an analysis may be done to accurately measure that difference.

Restoration of the environment typically incurs labor and equipment costs. Sometimes, environmentally valuable land must be purchased from the current property owner in order to restore it to its natural condition. An expert in environmental economics may be called upon to calculate these costs, as this is another aspect of this field.


Quantifying the impact of environmental degradation is another focus within the field of environmental economics. Experts may attempt to more accurately measure the costs of degradation, and the results obtained may reveal the hidden impacts to various stakeholders. When all the costs are measured, policymakers or corporate decision makers may have a more accurate basis upon which to make what are sometimes politically difficult decisions.

The economic impact of the decline or loss of wildlife may be partially measured by the resulting loss of recreational activities to a nearby population. Economists may also be able to measure positive and negative economic impacts from restoring riparian vegetation, in order to prevent stream-bank erosion. Sometimes, such erosion can threaten existing residential or commercial structures.

Calculating the anticipated ROI of energy conservation measures is a commonly explored aspect of environmental economics. Since cost savings are usually an effective incentive to reduce negative impacts on the environment, disseminating this knowledge through various channels may have a significant impact on people's behavior. Energy conservation is typically something the end user controls; for example, by lowering a thermostat at the office, or at home. An analysis of the economic impacts of switching to biofuels may be another aspect of environmental economics that is measured for a variety of reasons. These could include the anticipated or current ROI on a field that has been or will be converted from food crops to fuel crops, or the anticipated or future impact that mass cultivation of biofuels may have within a specific region.


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Post 2

@Nefertini - Environmental science can examine the environment from a social sciences perspective like economics as well as a physical sciences perspective like biology or chemistry. Hopefully a multidisciplinary look at environmental issues will help preserve the planet and its resources for all of its inhabitants.

Post 1

It's too bad we're more concerned about the economic issues related to the environment than we are about the way pollution, fracking, and other human activities affect the planet and the other living beings, i.e plants and animals, that share the earth with us.

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