Environmental Economics Analysis Term Paper Example | Topics and Well Written Essays - 3500 words

Environmental Economics Analysis - Term Paper Example Environmental economics is a subfield of economics concerned with environmental issues (other usages of the term are not uncommon). In using standard methods of neo-classical economics, it is distinguished from green economics or ecological economics, which include the nonstandard approaches to environmental problems, environmental science/environmental studies, or ecology. (Wikipedia) The economic growth is, in fact, good for the environment, and there are limits to the contribution that economic growth can make to human well being. Forests are being depleted throughout the world since this is the economically optimal strategy for the owners. However, forests not only provide timber but also perform global ecosystem services. Forests absorb carbon dioxide, preserve biodiversity, prevent soil erosion, maintain hydrological cycle, etc. Hence, global environmental sustainability, a prerequisite for economic sustainability, might require that limits be placed on the depletion of natural resource stocks, even if it appears that this means sacrificing some of the monetary value of these stocks As the market cannot reflect all the values of the services provided by the natural environment, this implies that environmental sustainability places a constraint on economic growth. Because the services provided by natural resources are not traded in the markets, they are not reflected in the value of conserving natural resource stocks. In economic terminology, these are examples of market failures, and that is an outcome, which is not efficient in an economic sense. Here the inefficiency is caused because too much of the polluting activity will be carried out, as the polluter will not take the interests of those adversely affected by the pollution into account. This has led to controversial research into measuring well being which tries to measure when pollution is actually starting to affect human health and general quality of life.  Ã‚