Resource and Environmental Economics

Environmental economics is a particular specialization of neoclassical economics which studies two interlinked questions: the problem of environmental externalities and ascertaining the optimal price of a resource, as a means of mitigating the externalities that come with the use of the environment and natural resources. In response, economists have developed a variety of valuation methods, known collectively as nonmarket valuation methods to estimate the value of goods and services whose market is either imperfect or nonexistent. Over the last three decades, the field of valuation has become one of the cornerstones of environmental economics. However, it is not without its critics. For example, ecological environmentalists believe that the neoclassical assumptions that underpin environmental economics ignore the complex roles and impacts of humans in relation to the larger, interconnected ecological system. It has also been critiqued by geographers for failing to deal with issues of justice and equity in the use and misuse of the environment and natural resources.