Environmental economics is a field of economics that focuses on the development assessment, evaluation, and application of economic concepts to environmental problems and policies. It focuses on the study of environmental costs and benefits, the valuation of natural resources and their use and the design of regulatory incentives and policies to promote sustainable economic growth.
The main concern in environmental economics is the monetary assessment of environmental products and services. This is the process of determining whether people are willing to pay for products or activities that are environmentally beneficial (WTP) or inconvenient (WTA). These valuations are crucial in evaluating the efficiency of market allocation. They are also essential in understanding the nature of externalities, the inability of market prices to take into consideration certain aspects of human activity that impact others. A person purchasing timber may not take into account the impact of water seepage on lower floors of adjacent houses. A company that pollutes might not be aware of the health risks to others.
Environmental economics is also concerned with the issue of non-marketable assets. This issue was the driving force for the first environmental revolution, which was triggered by Rachel https://recyclefortamworth.co.uk/2023/06/16/environmental-economics/ Carson’s Silent Spring of 1962. At the time, economists began to link external effects theory to an economic explanation for environmental concerns.
Ecological economics is the study of the interconnectedness of biological systems and the effects that humans have on them. It is an interdisciplinary discipline that has been criticized by scholars from other disciplines, including Marxist and critical geography perspectives, for not incorporating human relations with the natural environment into its analysis.