Environmental Economics Flashcards, test questions and answers

Discover flashcards, test exam answers, and assignments to help you learn more about Environmental Economics and other subjects. Don’t miss the chance to use them for more effective college education. Use our database of questions and answers on Environmental Economics and get quick solutions for your test.

What is Environmental Economics?

Environmental economics is a branch of economics that studies the relationship between humans and nature. It looks at how human activities have a direct impact on the environment, and how environmental changes can then affect economic decisions. Environmental economics focuses on using economic tools to understand how environmental issues and policies can affect businesses, communities, and households. Environmental economics considers both positive and negative externalities of human activities. Positive externalities are benefits that arise from an activity without being accounted for in its cost. An example of this would be increasing access to clean air or water, which can benefit people even if they do not consume them directly. Negative externalities are costs incurred by individuals or groups due to another’s action but not paid for by those responsible for them. An example would be air pollution from a factory that affects nearby people who have no connection with it financially. Environmental economists use various tools to evaluate the costs and benefits of different policies aimed at protecting the environment such as taxes, subsidies, regulations, tradable permits, public-private partnerships and voluntary agreements. They also look into different market structures related to the environment such as emissions trading systems (ETS). ETSs allow companies facing high compliance costs associated with environmental protection measures to buy emission allowances from those that have achieved their emission reduction targets at lower costs than expected. The goal of environmental economics is ultimately to find solutions that promote sustainable development while ensuring economic growth over time in order to improve quality of life for all people around the world while preserving natural resources for future generations.