Environmental Concepts

Environmental economics explores the relationship between economic activities and ecological sustainability, focusing on how markets, policies, and human behavior impact natural resources. Key topics in this field include environment as a public good, which examines the challenges of managing resources that are non-excludable and non-rivalrous, leading to issues like overuse and under-provision. The Coase Theorem provides insights into how well-defined property rights and bargaining can help resolve environmental externalities efficiently. Valuation of environmental goods is crucial in assigning economic value to nature’s benefits, ensuring their inclusion in decision-making. Cost-benefit analysis and compensation criteria help assess the effectiveness of environmental policies by weighing economic gains against ecological costs. Additionally, market failure explains inefficiencies arising from externalities, public goods, and information asymmetry, often requiring government intervention. Together, these concepts provide a framework for sustainable economic planning and policy development.