Environmental Economics

In Environmental Economics, resources are typically defined by their utility, limited availability, and the fact that they are consumed. A resource being "unlimited in abundance" contradicts the fundamental principle of scarcity, which underpins the concept of resources.

The shift to electric vehicles is an example of a positive production externality because it involves a production decision (using cleaner technology) that has beneficial side effects, such as reduced greenhouse gas emissions, which benefit society without being directly reflected in market prices.

Natural capital refers to the world’s natural assets—such as soil, air, water, and living organisms—that provide ecosystem services essential for human survival and economic activity. It forms the foundation for sustainable development and long-term wealth generation.

Cost Benefit Analysis (CBA) is a systematic method used to evaluate the strengths and weaknesses of alternatives. It considers both direct and indirect costs and benefits to determine the best approach or option based on economic efficiency.