As the world becomes increasingly aware of the daily impact that human activity has on the environment, new schools of thought have been developed to better fit environmental considerations into the way we live our lives and conduct our business. Environmental economics has become a key method for businesses and governments to gain a wider picture of their effect on the environment and the people who live within it.
Environmental economics is the study of the financial impact of environmental policies. According to environmental economics, the environmental costs of economic activity are unaccounted for in most economic models. Externalities like environmental degradation, depletion of resources, and pollution are potential causes of market failure, where the market ends up affecting the environment in ways that are detrimental to society. The environmental economist’s role is to determine the costs and benefits of economic policies and their relation to the environment, as well as to improve the relationship between these two interdependent areas.
Environmental economists may study existing policies to gain a better understanding of their environmental impact, as well as recommend policies that take environmental benefits into account. For example, an environmental economist may:
- Perform valuation of natural resources and identify methods to preserve or improve existing resources
- Develop cost-benefit analyses of economic or environmental regulations
- Identify and study externalities like pollution or erosion resulting from ongoing or proposed economic activity
- Study the potential benefits of sustainable policies in land use and development, waste management, energy use, etc.
Environmental economists offer a valuable perspective for the construction industry, where everything from location to building materials to the infrastructure supporting a construction project can have a marked effect on the surrounding environment. With the help of environmental economists, governments and industries can make more informed decisions that maximize environmental benefits and minimize the degradation of the environment at the expense of society.
Part of CREED LA’s mission is to ensure that the construction industry in Los Angeles supports projects that have positive impacts for the community, as well as the local environment. Environmental economists play a part in helping us achieve this goal. To find out more about how our non-profit organization works to build a better community and environment for LA, visit us online or contact us today at (877) 810-7473.