Using economic analysis theories, an environmental economist investigates the environmental implications of economic decisions. From projects to policies, these economists will examine current and potential resource use and advise the public, governments, and business leaders on the environmental consequences. Environmental economists are also involved in the reshaping and development of analytical economic models to address complex issues in environmental economics. This procedure also entails determining how to assign economic value to the environment and how that value relates to the overall economy.
Environmental economists may work for the government or a business organization, assigning economic value to a piece of land so that leaders can assess a business proposal. A part of that evaluation will be determining the economic impact of the development on the environment. An environmental economist may work directly with government officials to develop or evaluate public policy involving trade and the environment in economic decision-making.
An environmental economist usually completes these tasks using traditional cost-benefit analytical models, regardless of the specific job. These models are used these economists to make policy and project decisions. All potential benefits and associated costs are weighed in these models. It is relatively simple to assess the hard costs of a proposed project, such as the potential impact on tax revenues or profitability, using traditional economics. However, assessing the environmental impact entails a slew of other complexities.
Environmental economists frequently find themselves in unfamiliar territory. An environmental economist may be required to assign value in new ways that are not yet adequately modeled economic theory. To effectively assess the situation and assign value at this point, the economist will need to develop new theory and models. The situation may also necessitate rethinking current theory and adjusting economic assessment tools.
Putting a monetary value on the environment is difficult. The main problem is that putting a monetary value on the environment is a difficult task. For example, an economist concerned about environmental costs might need to calculate the cost of clearing land for a development project. Assigning costs to things like soil erosion, habitat destruction, potential pollution, quality of life for nearresidents, and possibly even contributions to climate change is one of those conundrums. Above all, an environmental economist must accurately calculate these costs in order to accurately communicate the benefits and drawbacks of such development.
As a result, such economists have a wide range of skills. To accurately identify and quantify economic impact, they consult with a variety of other professionals, including environmental scientists. The job doesn’t end with data collection and analysis; in some cases, the data needed isn’t even available. Instead, environmental economists must collaborate with other professionals to develop new models and theories. Then, regardless of the profit potential for the invested parties, they must disseminate that information to a wide range of people — sometimes even the general public, when the environmental effects of a proposed economic situation are dire.