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What can economics teach us about the environment?

Economics can provide interesting insights into environmental issues. Three research areas are revealed.

This image is part of an animation of ocean surface currents from June 2005 to December 2007 from NASA satellites. This part shows the North Atlantic currents. Credits: NASA/SVS
This image is part of an animation of ocean surface currents from June 2005 to December 2007 from NASA satellites. This part shows the North Atlantic currents. Credits: NASA/SVS

Applying economics to environmental issues can assist with cost-benefit analysis. This works best when short-termism is ditched and the bigger picture assessed, including longer-term economic costs. In this Digital Journal round-up of the latest green economics, three areas of application are presented.

Unsustainable Arctic shipping

To some economists the melting Arctic ice are providing opportunities in the form of shorter shipping routes through the polar region. While this may confer a short-term advantage to some shipping companies, other economists have assessed the environmental trade-offs and costs in addition to the commercial benefits and opportunities in Arctic shipping.

The economics researchers from University College London argue that instead capital should be pouring resources into driving technological developments designed to accelerate the uptake of green fuels and technologies.

To correct what they see as market dysfunction, the researchers call for government intervention. This is outlined in the journal Transportation Research Part A: Policy and Practice and the paper “A techno-economic environmental cost model for Arctic shipping.”

Constructed wetlands are best to deal with agricultural runoff into waterways

Wetlands constructed along waterways have been assessed to be the most cost-effective way to reduce nitrate and sediment loads in large streams and rivers. Economists have predicted that rather than focusing on individual farms, instead conservation efforts using wetlands need be implemented at the watershed scale. To achieve this incentive payments may be required.

This is based around a predictive model where a computer simulation using data from the Le Sueur River Basin in southern Minnesota, which is a watershed subject to runoff from intense agricultural production of corn and soybeans, was processed.

In making the recommendation, the researchers from the University of Kansas consider the effects of excessive nitrate or sediment affect local fish populations, plus the amount of money that needs to be spent to treat drinking water.

The full detail is presented in the journal Proceedings of the National Academy of Sciences, where the research is titled “Integrated assessment modeling reveals near-channel management as cost-effective to improve water quality in agricultural watersheds.”

Cost of river floods

An international group of scientists (led by GFZ GeoForschungsZentrum Potsdam, Helmholtz Centre) have investigated the causes, patterns and effects of disastrous river flood. Thy have also measured the varying economic impact. Globally, over the past thirty years, the number of fatalities from river floods has declined worldwide. However, the amount of damage has risen sharply.

Lowering the casualty rate is connected to improved flood warnings, technical protection measures and heightened hazard awareness. Yet the causes relate to socio-economic reasons  like poverty, population growth, higher values in flood-prone regions plus as climate change.

These different factors can be accounted for in predicting the effect of future floods in terms of economic damage as well as laying out strategies to avid developing in known flood areas, especially when the impact is likely to be greatest for poorer communities.

The data appears in the publication Nature Reviews Earth & Environment, under the heading “Causes, impacts and patterns of disastrous river floods”.

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Written By

Dr. Tim Sandle is Digital Journal's Editor-at-Large for science news. Tim specializes in science, technology, environmental, business, and health journalism. He is additionally a practising microbiologist; and an author. He is also interested in history, politics and current affairs.

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