Environment and Resource Economics

Environment and resource economics examines how societies allocate, manage and value natural assets and ecosystem services while balancing economic growth and ecological stewardship. It studies the drivers of resource depletion, pollution and biodiversity loss, and the policies and market instruments—such as carbon pricing, tradable permits, payment for ecosystem services and regulatory standards—that can internalise environmental externalities. Central themes include the quest to decouple economic output from material and energy throughput, optimal extraction of renewable and non-renewable resources, intergenerational equity, and welfare trade-offs. Analytical tools range from applied general equilibrium and spatial econometric models to non-market valuation and cost–benefit analysis, all aimed at informing sustainable development strategies that reconcile human well-being with planetary boundaries.

Research from Nature Portfolio

Recent empirical work has explored how the rise of digital infrastructure in cities built around extractive industries can alter carbon emission trajectories. In resource-based cities, the expansion of broadband networks and platform technologies has been shown to reduce CO₂ emissions, primarily through improved public awareness of environmental risks, more efficient resource allocation and enhanced regulatory compliance. This carbon-mitigation effect is strongest in the early stages of digital diffusion and in jurisdictions with stringent environmental regulations, highlighting the interplay between digital policy and urban sustainability.

Another study in emerging economies has assessed the joint impact of renewable electricity consumption and human capital on environmental health, measured by the load capacity factor. In a panel of BRICS-Plus countries, increases in renewable power share and educational attainment yielded significant gains in ecological resilience, whereas higher levels of non-renewable electricity and industrialisation hindered sustainability. Both linear and non-linear analyses confirmed that policy-driven boosts to clean energy and skills formation provide durable improvements in environmental quality across diverse regional contexts.

Environment and Resource Economics publication trend

The graph below shows the total number of articles in environment and resource economics across all publications each year (not limited to Nature Index journals).

Technical terms

Decoupling: Separation of economic growth from environmental degradation, achieved when output rises while resource use or emissions fall.

Pigouvian tax: A levy on activities or goods that generate negative externalities, set equal to the marginal social cost of the damage caused.

Digital economy: Economic activities and services enabled by digital technologies, which can influence resource efficiency and monitoring.

Load Capacity Factor (LCF): The ratio of a region’s biocapacity to its ecological footprint, indicating whether it operates within ecological limits.

Renewable energy intensity: The share of total energy consumption supplied by renewable sources, used as a measure of clean-energy transition.

Non-renewable energy efficiency: The ratio of useful output (e.g. industrial production) to the consumption of non-renewable energy, reflecting improvements in fuel use.

Oil rents: Revenues accruing to governments or firms from oil extraction, calculated as the difference between oil prices and production costs.

References

1. Impact of the digital economy on carbon dioxide emissions in resource-based cities. Scientific Reports (2024).
2. Insights from BRICS-T economies on the impact of human capital and renewable electricity consumption on environmental quality. Scientific Reports (2023).
3. Oil rents and environmental sustainability: Do green technologies and environmental technological innovation matter?. Journal of Open Innovation: Technology, Market, and Complexity (2024).
4. Environmental benefits of nonrenewable energy efficiency and renewable energy intensity in the USA and EU: Examining the role of clean technologies. Sustainable Energy Technologies and Assessments (2023).
5. What Is Environmental Economics?.