What is Environmental Economics?

Environmental economics is an emerging branch of economics that studies the relationship between the environment and economic activity. The overall goal of environmental economics, therefore, is to balance economic activity with its environmental impact.

An industrial environmental economist may take both pollution and natural resource depletion into consideration during the planning phase for the production of goods and products, and study ways to reduce the environmental impact during production while balancing cost and profit margins. In other words, an environmental economist weighs the advantages and disadvantages of environmental sustainability in the marketplace.

What to Expect from a Career in Environmental Economics

Environmental economist jobs may involve the study of federal policies regarding natural resources and how these environmental policies affect industries, markets and financial systems. Because sustainable living and green initiatives have become part of the public discourse, there has been a huge push for government and industry to get on board and develop eco-friendly ways to produce the goods everybody wants and needs.

Environmental economics jobs are an important part of this equation because they support the study of whether economies can support green projects and environmental policies. In other words, the best environmental solutions aren’t realistic if they aren’t economically feasible.

Through research, study and analysis, including mathematical modeling techniques, environmental economists are able to create the real-world costs of going green. If going green means market failure, then no one benefits from green strategies. Because of this, environmental economists search for answers to fledgling green business practices and policies and provide solutions that encourage both environmental sustainability and protection and economic success.  Environmental economists may work in a number of areas, including the government, non-profit, industry, and business sectors.

Environmental Valuation

Environmental economics jobs involve tackling any number of environmental policies around the world and their economic effects, including policies associated with air and water pollution, solid waste, toxic substances, natural resource depletion, and global warming, just to name a few.

Environmental economists consider environmental valuation through five, distinct methods:

  • Project evaluation
  • Regulatory review
  • Natural resource damage assessment
  • Environmental costing
  • Environmental accounting

Through these evaluations, environmental economists study market failures and recommend changes as to better model future markets. This progressive form of economics views a healthy market and economy as one that can distribute resources as to provide the best overall benefit to society.

How to Become an Environmental Economist: Education and Degrees in Environmental Economists

An environmental economics program is not a common offering in colleges and universities throughout the country; therefore, students interested in pursuing a career as environmental economists generally pursue graduate degrees or MBAs in economics and focus their elective studies on environmental and ecological economics.

Because the field of environmental economics is becoming acknowledged among economics programs, students can expect to find courses that focus on this branch of economics. Ecology, environmental science and ecological design are just a few of courses taken by students pursuing careers as environmental economists.

Graduate degrees are generally required for private sector and government economist positions, particularly for supervisory positions.

Salary and Employment Statistics for Environmental Economists

According to the United States Department of Labor, Bureau of Labor Statistics, the median annual salary for economists was $89,450 in May 2010, with the top 10 percent earning more than $155,490. Employment in this profession is projected to grow by 6 percent from 2010 to 2020.

The industries employing the largest number of economists in May 2010 (and their median annual salaries) included:

  • Scientific research and development services $109,720
  • Federal executive branch $106,840
  • Management, scientific, and technical consulting services $93,250
  • Local government $69,950
  • State government $61,620

The Sam W. Walton College of Business, Center for Business and Economic Research and Department of Economics, through their Survey of the Labor Market for New Ph.D. Hires in Economics 2009-2010, reported the following mean actual salaries:

  • Average of all survey respondents: $86,292
  • All Ph.D. granting institutions: $98,692
  • Bachelor and master degree granting institutions: $72,696

Resources for Environmental Economists

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