Define environmental economics

Environmental economics is the study of how economic activity affects the environment. It looks at the interactions between natural resources and economic activities, such as production and consumption. It considers how to allocate resources in order to achieve optimal environmental outcomes, taking into account both short-term and long-term effects. This discipline applies microeconomic principles, such as cost-benefit analysis and market analysis, to environmental issues. It also takes into consideration the larger economic context in order to provide sustainable solutions to environmental concerns.