What is Environmental Economics?

Environmental economics refers to the use of the principles and methods of economic science and environmental science to analyze the contradiction between economic development and environmental protection, and the relationship between economic reproduction, population reproduction, and natural reproduction, and to choose economic and reasonable material transformation methods To create a clean, comfortable and beautiful living and working environment for human beings with minimal labor consumption. ^[1]

Environmental pollution and damage, in addition to people failing to understand the laws of natural ecology, are analyzed from economic reasons, mainly because people have not fully weighed the relationship between economic development and environmental protection, and only consider recent direct and direct

The process of socio-economic reproduction, including production, circulation, distribution, and consumption, is not carried out in a self-closed system, but with the same

Basic theory

Including the relationship between social systems, economic development, scientific and technological progress and environmental protection, and theories and methods of environmental measurement.

Environmental economics is a fast-growing emerging discipline. The development history in recent decades shows that environmental

Wang Hua, Senior Environmental Economist, World Bank Headquarters

Economic analysis has shown various promising prospects, which can be confirmed from the large number of recently published textbooks, monographs, periodicals, various academic seminars, and related international projects. This means that environmental economic research is gradually maturing, and its momentum of accelerated growth also reflects the fruitful results of environmental economic analysis. Moreover, on the one hand, with the development of mainstream economics, environmental economics can continuously draw nutrition from it, and draw on its new theoretical tools and analytical methods to promote the continuous improvement and development of its own discipline system. For example, in the past 10 years, new growth theory has been used to analyze the path of sustainable development, new trade theory has explained the impact of the environment on the international competitiveness of products, game theory has been used to analyze cooperation and struggle in global environmental issues, and applied industrial organization theory to imperfect competition. Great progress has been made in research on the effectiveness of environmental policy tools in the market. On the other hand, as Deacon.TR and other (1998) nine prominent experts in the American environmental economics industry emphasized when summarizing the evolution and development trends of environmental economics in the past decades, along with environmental management and sustainable development strategies of various countries The formulation and implementation of policy issues in real needs will provide a lasting driving force for the continuous development of environmental economics, so that the research content of environmental economics will be continuously enriched with the development of real economy. Sterner and Bergh (1998) were invited by the Editorial Board of the Journal of Environmental and Resource Economics to summarize the latest developments in environmental economics. They believe that the following will be the focus of environmental economics in the coming period: ^5]

Environmental value assessment

Environmental value assessment theory has received more and more attention in environmental economics in recent years. The main methods include willingness survey method, hedonic price method, travel cost method, production function method, etc. Although there are still many controversies in theory and practice, its role in environmental decision-making has become increasingly important. In addition, green account research that incorporates environmental assessment into the national accounting system is also one of the focus of future research.

Environmental economic analysis in a global context

Different from the closed economic model, the analysis of the international dimension of environmental issues mainly involves two aspects: the governance of cross-border and global environmental issues, and the relationship between foreign trade and the environment. The trend of economic globalization has caused global environmental issues to attract much attention. Some economic models, such as game theory models, have been used to explain global environmental decision-making behaviors in cooperative and non-cooperative situations. Cost-benefit analysis is also applied to global environmental policies. In the process of globalization, the relationship between trade and the environment has become increasingly close, and it has an important impact on the pattern of world economic development. Research in this area will also gradually increase. At present, people are mainly interested in building models that can explain aspects of specialization, production-market relations, and policy feedback effects, including the introduction of environmental factors into the analysis of the Heckscher-Ohlin model. In addition, it is generally believed that factors such as regional differences, technological innovation, and the characteristics of developing countries should be considered when studying the environment-trade interaction. ^[6]

Environmental Economic Analysis of Spatial Dimension

The spatial dimension of environmental problems is often overlooked by environmental economists, but now people are gradually discovering that there is a lot of work to be done in this field, especially in cross-disciplinary backgrounds. For example, in conjunction with natural science, geography, and ecology, in these disciplines, spatial models are common. Space-related environmental issues such as non-point source pollution, land use, urban environment, transportation, and location choice will become the focus of research.

Ecological tax reform

Taxation is one of the important policy tools in environmental management. At present, the so-called "ecological tax" reform policy is generally implemented in European countries, which is to gradually shift the basis of taxation from labor to energy use and environmental pollution treatment. This conversion process It is believed to produce a "win-win" result of environmental improvements and reduced tax distortions to the economy. Therefore, theoretical research on this aspect is and will continue to be one of the important research topics in environmental economics.

Applications of general equilibrium analysis

Obviously, environmental economics uses many analytical methods to describe, predict, and analyze the economic-environmental characteristics of a problem. These models usually have different technical structures (linear and non-linear, static or dynamic), and the models are universal, accurate and realistic. Because environmental problems are often interrelated and interrelated, for example, in road traffic environmental problems, traffic congestion, accidents, exhaust emissions, and noise are interlinked. Therefore, the general equilibrium analysis method will play an increasingly important role in comprehensively considering environmental issues and using various policy tools to achieve optimal environmental effects.