"Environmental economics is a sub-field of economics concerned with environmental issues."
Study of externalities (positive and negative) and their impact on the environment, methods for internalizing externalities.
Definition and explanation of externalities: When the actions of one agent impact the welfare of another agent in the economy, externalities occur. Externalities can be negative (harmful) or positive (beneficial).
Environmental degradation and pollution: Pollution can cause negative externalities on the environment and lead to environmental degradation. The economic impact of pollution must be analyzed to help guide mitigation efforts.
Market failure: Market failures usually occur where there are externalities. Pollution and other environmental factors often require corrective action to avoid or fix market failures.
Regulation of externalities: Regulations are one of the most effective tools to control negative externalities. For example, limiting air pollution emissions from factories via government regulations can help mitigate the harmful effects of pollution on the environment.
Coase theorem: The Coase theorem, developed by economist Ronald Coase, examines the role of property rights in responding to externalities. The theorem suggests that if property rights are well defined and transaction costs are low, bargaining can lead to efficient outcomes even in the presence of externalities.
Public goods: A public good is a good that is non-rivalrous and non-excludable, meaning that it's accessible to everyone and no one can be prevented from using it. Environmental protection and conservation are often considered public goods.
Natural resources and depletion: Our natural resources are susceptible to depletion when they are used without adequate regulation or protection. It is important for economists to evaluate the economic impact of natural resource depletion in order to promote a sustainable economy.
Sustainability: A sustainable economy is one which is able to meet present needs without compromising future generations' ability to meet their own needs. Creating a sustainable economy requires evaluating all externalities that may come from various economic activities.
Valuation of Environmental Externalities: Environmental externalities must be quantified to understand their economic impact. For example, economists may examine the value of a bee colony, which provides pollination services and grows crops, as the bee population declines.
Environmental policy instruments: Environmental policy instruments are tools used to regulate environmental externalities. The list includes taxes, subsidies, and cap-and-trade agreements which have been implemented successfully by many governments around the world.
Cost-Benefit analysis: Cost-benefit analysis measures the costs and benefits of various policy options in order to determine the most efficient one. This can be used to determine the cost-effectiveness of different policies and ensure that scarce resources are utilized in the best way possible.
Climate change: Climate change is one of the most important environmental problems we face today, and it is caused mainly by global greenhouse gas emissions. This topic addresses how externalities can contribute to climate change and how economic tools can be utilized to mitigate the same.
Ecolabeling and certification: Ecolabeling is a means of regulating environmental externalities that develops standards and certifications for sustainable products. It helps consumers to make informed choices and supports sustainable producers who take environmental impacts into account.
Environmental impact assessment: Environmental Impact Assessment measures the potential impact of a project or activity on the environment. It is a tool for assessing the potential externalities that may arise from a particular project or activity.
Corporate Social Responsibility (CSR): CSR is an approach in which corporations take the responsibility to act in a way that benefits society and the environment. It is impactful in mitigating economic externalities and ensuring the sustainable economic growth of a company.
Negative Production Externalities: These occur when a firm's production process results in pollution or harm to the environment. For example, a factory that is located near a river and discharges pollutants into the water.
Positive Production Externalities: These occur when the production process results in environmental benefits such as improved air quality or increased biodiversity. For example, a farm that adopts sustainable farming practices that improve soil quality and increase biodiversity.
Negative Consumption Externalities: These occur when the consumption of a product or service results in harm to the environment. For example, driving a gas-guzzling car that emits pollutants into the atmosphere.
Positive Consumption Externalities: These occur when the consumption of a product or service results in environmental benefits. For example, purchasing organic produce that is grown using sustainable farming practices.
Spatial Externalities: These occur when the location of economic activities impacts the environment. For instance, a development project that results in loss of habitat or fragmentation of ecosystems.
Knowledge Externalities: These occur when knowledge is developed in one area of environmental science or development that could be beneficial to another field. For instance, knowledge about how to use crop rotation and soil management techniques to mitigate soil erosion can be shared with other farmers.
Network Externalities: These occur when the environmental performance of one actor in a network (such as a supply chain) affects the outcomes of others in the network. For instance, a supplier's use of green energy sources that can reduce emissions across the value chain.
"It has become a widely studied subject due to growing environmental concerns in the twenty-first century."
"Theoretical or empirical studies of the economic effects of national or local environmental policies around the world."
"Particular issues include the costs and benefits of alternative environmental policies to deal with air pollution, water quality, toxic substances, solid waste, and global warming."
"Environmental economics is distinguished from ecological economics in that ecological economics emphasizes the economy as a subsystem of the ecosystem with its focus upon preserving natural capital."
"Ecological economists emphasizing 'strong' sustainability and rejecting the proposition that human-made ('physical') capital can substitute for natural capital."
"One survey of German economists found that ecological and environmental economics are different schools of economic thought."
"Ecological economics emphasizes the economy as a subsystem of the ecosystem."
"The focus [of ecological economics] is upon preserving natural capital."
"Ecological economists reject the proposition that human-made ('physical') capital can substitute for natural capital."
"...to deal with air pollution, water quality, toxic substances, solid waste, and global warming."
"Environmental policies have economic effects in national or local contexts around the world."
"Growing environmental concerns in the twenty-first century."
"Particular issues include the costs and benefits of alternative environmental policies."
"Dealing with air pollution, water quality, toxic substances, solid waste, and global warming."
"Ecological economics emphasizes the economy as a subsystem of the ecosystem."
"Preserving natural capital."
"Ecological and environmental economics are different schools of economic thought."
"Rejecting the proposition that human-made ('physical') capital can substitute for natural capital."
"Concerns regarding environmental issues."