Environmental economics is a branch of economics that focuses on environmental concerns. Environmental economics differs from ecological economics in that it highlights the economy as a subsystem of the ecosystem with an emphasis on natural capital preservation. Environmental economics, in its broadest sense, studies how economic activity and policies affect the environment in which we live. It studies how environmental and natural resources are generated and managed using economic concepts. The costs and benefits of various policy solutions can be compared using a range of economic techniques. EPA is also conducting new research to improve approaches for calculating the economic impact of environmental outcomes. Environmental economists conduct research to determine the economic implications of environmental policy, both theoretically and empirically. This branch of economics aids users in the creation of appropriate environmental policies as well as the analysis of the effects and merits of existing or prospective policies. Sustainable scale, equitable distribution, and efficient allocation are the three interconnected goals of ecological economics. All three of these factors lead to human happiness and long-term sustainability.
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