Studying the financial impact of environmental policies is the core concern of environmental economic studies. Environmental economists study the theoretical or empirical effects of environmental policies on the economies of different countries. Thanks to the field of economics, experts are able to appropriately design and put in place environmental policies, as well as analysing existing ones.
There is a basic argument underpinning the study of environmental economics; there are environmental costs of economic growth that go unaccounted for in the market model. Things like pollution and other kinds of environmental damage could result in market failure. Therefore, environmental economists analyse the negative and positives of specific policies, which also involves performing theoretical tests on possible economic consequences of environmental degradation.
For those looking to become environmental economists, your main aim is to identify specific problems in order to rectify them, and there can be more than one way of solving the same problem. For example, if an area is looking into the transition to clean energy, there are several ways of going about it. The government could impose a limit on carbon emissions, bring about quantity-based taxes on carbon emissions or offer tax credits to companies that adopt renewable power sources.
All of these suggestions rely on the state; therefore, the degree to which intervention is necessary is an important political factor in determining environmental economic policy.
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