Environmental economics is an area of study under the study of Economics. It consists of analysis and discussions about environmental issues that are of some relevance to the overall economic studies. The study of environmental economics is the empirical analysis of the role and relevance of economic efforts on the environmental factors. It deeply analyses the interplay between the economic activities and the environmental repercussions thereof. The subject is of strategic significance since the world over debate about sustainable development.
Cost benefit analysis of industrial waste, air and water pollution, global warming etc are some of the issues commonly discussed under the subject of environmental economics. Another term commonly used is the ecological economics which uses similar concepts. But the distinguishing factor between environmental economics and ecological economics is that the former studies the economy as a subsystem existing within the eco-system. It also distinctly focuses on the conservation of the natural capital. Policy formulation for safeguarding the environment is also a part of environmental economic study. Environmental economics also helps in the study of the natural inputs that work as the inputs to the eco- system and the degree to which these inputs are optimally used for the economic activities.
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