Economics, Environmental Issues

Environmental economics is an area of economics dealing with the relationship between the economy and the environment. Environmental economists study the economics of natural resources from both sides - their extraction and use, and the waste products returned to the environment. They also study how economic incentives hurt or help the environment, and how they can be used to create sustainable policies and environmental solutions.

What Does an Environmental Economist Do?

Environmental economists research the economics of environmental issues such as renewable energy use, construction of new hydroelectric power plants or transnational pipelines, and pollution control measures. They may conduct cost-benefit analyses of industrial activities or proposed regulations involving natural resources, usually using a suite of advanced statistical and computer software programs. They may also run sophisticated environmental modeling programs. Based on these analyses, they may develop cost-effective and sustainable policy recommendations, and communicate them to policymakers through reports and presentations.

Environmental economists may study or develop policy recommendations relating to:

  • Externalities, or unintentional effects on the environment or human health resulting from economic activity
  • Permit trading, also referred to “cap and trade”. This approach was successfully used to address acid rain in the 1990s. It's also been proposed as a policy tool to address release of the greenhouse gases that cause global warming.
  • Cost-benefit analysis of environmental regulations
  • The economics of biofuels, waste management, land cleanup and other environmental technologies and industries
  • Valuation, which aims to assign dollar values to natural resources. Valuation also deals with nature-provided “ecosystem services”, such as erosion prevention by trees or water filtering by plants.

Where Does an Environmental Economist Work?

As of 2012, the majority of environmental economists were employed in federal or state government, or in professional, scientific, and technical services. However, larger environmental consulting firms are now beginning to hire economists. Professionals in these positions help determine the financial and environmental costs of development projects, and may help project planners mitigate those costs.

Economists themselves may be employed as project managers for development initiatives backed by large organizations such as the World Bank and U.S. Aid. These positions may involve travel to overseas destinations.

What Is the Average Environmental Economist Salary?

While the U.S. Bureau of Labor Statistics (BLS) does not collect data on environmental economists specifically, the median annual wage for economists as a whole was $93, 070 in 2013. Those working for the federal government typically earn the most, followed by those in management, scientific, and technical consulting services.

State Total Employment Bottom 25% Median Salary Top 75%
Alabama 40 $59, 300 $72, 420 $158, 570
Alaska 90 $73, 690 $87, 880 $98, 360
Arizona 170 $52, 970 $64, 900 $87, 530
Arkansas 50 $46, 770 $63, 250 $87, 040
California 3, 050 $68, 380 $94, 160 $120, 880
Colorado 270 $65, 060 $88, 980 $109, 540
Connecticut 190 $75, 700 $88, 260 $95, 180
Delaware 30 $58, 250 $67, 500 $82, 400
District of Columbia 4, 890 $82, 350 $109, 820 $142, 350
Florida 220 $52, 930 $74, 560 $92, 230
Georgia 320 $71, 900 $88, 680 $111, 490
Hawaii $50, 520 $60, 570 $78, 140
Idaho $43, 150 $50, 450 $69, 370
Illinois 330 $72, 100 $92, 970 $116, 120
Indiana $90, 310
Iowa 70 $55, 410 $64, 350 $82, 260
Kansas 60 $52, 360 $57, 820 $91, 820
Kentucky 80 $45, 480 $61, 550 $77, 080
Louisiana $62, 550 $89, 460 $116, 040
Maine $52, 850 $59, 780 $97, 610
Maryland 410 $84, 440 $108, 720 $133, 260
Massachusetts 850 $61, 090 $81, 970 $117, 260
Michigan 140 $66, 980 $78, 700 $92, 280
Minnesota $48, 200 $59, 620 $70, 570
Mississippi $36, 200 $70, 870 $88, 720
Missouri 230 $57, 880 $82, 560 $95, 470
Montana $59, 120 $80, 390 $106, 220
New Hampshire $50, 860 $60, 380 $94, 430
New Jersey 200 $74, 550 $95, 680 $126, 110
New Mexico $52, 900 $59, 600 $65, 600
New York 640 $77, 600 $103, 390 $141, 730
North Carolina 210 $54, 870 $82, 480 $118, 000
Ohio 130 $71, 530 $90, 510 $129, 930
Oklahoma 100 $46, 070 $65, 560 $90, 010
Oregon $60, 980 $77, 360 $95, 340
Pennsylvania 590 $63, 330 $84, 170 $104, 760
Puerto Rico $28, 330 $35, 000 $45, 990
South Carolina $49, 340 $59, 930 $84, 860
Tennessee $61, 450 $83, 580 $106, 360
Texas 840 $59, 500 $92, 260 $132, 270
Utah $55, 570 $70, 950 $91, 220
Vermont $54, 770 $66, 450 $79, 320
Virginia 1, 060 $86, 130 $116, 230 $146, 570
Washington 390 $65, 810 $77, 920 $91, 790
West Virginia $31, 240 $37, 320 $59, 040
Wisconsin 240 $46, 320 $56, 960 $81, 730
Wyoming $59, 340 $65, 420 $75, 090

Table data taken from BLS (

Environmental Economics Jobs & Job Description

An environmental economist studies and predicts the impact of environmental events on the local, national, and global economic scales. Environmental economics jobs apply field research data to economic incentives and use the resulting models to assess labor, markets, trading, and outcomes. While environmental economist jobs do vary significantly, the list here includes typical job duties that most economists feel comfortable performing:
  • Conduct research obtained from literature reviews, sample findings, and computer predictive data
  • Analyze historical data and historical issues to formulate an economic theory to explain behavior; apply to current circumstances
  • Analyze ecological and economic trends and cycles; use model data to relay information about future trends
  • Hypothesize how the environmental event or trend in question causes an economic outcome, and what the impact may be
  • Look for the economic incentives that lead people or companies to behave in certain ways
  • Look to change economic incentives so that people behave differently toward environmental concerns
  • Consult with policymakers in regard to economic pressures that cause people and companies to conform to regulations
  • Make predictions by identifying, collecting, analyzing, and using environmental and historical economic information
  • Provide reports to external stakeholders on economic performance and outcomes
  • Consult with policymakers, industry leaders, and other potential stakeholders
  • Prepare reports regarding economic findings
  • Assess and assign economic value to an industry or company's tasks, strategies, and past and future outcomes

History of Environmental Issues

Various Environmental Issues

Historical Environmental Issues