As humans’ environmental footprint rises in the twenty-first century, environmental economics and law are more relevant and essential than ever and require international cooperation to work effectively.

Concerned with analyzing environmental issues and methods for putting them into practice, they cover topics such as resource management, environmental protection, sustainable development, and land-use planning.

An overview of Environmental Law and Economics - Sheet1
A city with the natural environment_©pikisuperstar at


In the 1960s, environmentalism emerged as a significant political and intellectual movement. Since then, most environmental laws and regulations have been enacted. Environmental economics emerged in the West around the same time, with Post-Keynesian economist Paul Davidson making significant contributions. The field has since been recognized as an independent discipline that protects human health and the environment.

What Is Environmental Economics?

An overview of Environmental Law and Economics - Sheet2
Environmental economics_©partystock at

Environmental economics is a branch of economics that studies the economic effects of environmental policies worldwide. By addressing the cost-effective allocation, utilization, and conservation of the world’s natural resources, its main objective is to assist governments in developing appropriate environmental policies. The set policies are to be advantageous to the economy and have a minimal negative environmental impact.

Environmental economics may produce two types of policies: Prescriptive Regulations, where the government imposes strict regulations to lessen environmental harm, and Market-Based Regulations, which encourage desired behaviours through financial incentives.

What Areas Does Environmental Economics Cover?

  • Sustainable development – the development strategy that meets the present needs without compromising the needs of future generations.
  • Externalities – refers to the advantages and expenses brought on by business operations for which the price is unknown. For instance, there is no association between a market price for using natural resources and the environmental pollution we contribute to.
  • Market failure – externalities lead to market failure, which arises when the market doesn’t represent the actual cost of a good or resource. This happens mainly because the environment and its resources are taken for granted.
  • Valuation of the environment – natural resource values frequently do not correspond to market prices. This misalignment leads to overuse and underinvestment in them. Assessing the economic value of the environment aids in evaluating many aspects of environmental policies before their implementation.
  • Strategies – these are possible solutions set by environmental economists that deal with environmental protection.
An overview of Environmental Law and Economics - Sheet3
Green Economy_©

Solutions to Externalities

  • Environmental regulations – regulations that are increasingly recognized for their similarity to economic instruments.
  • Quotas on pollution – in theory, allowing firms to trade their emissions permits freely should result in lower pollution levels at the lowest possible cost.
  • Taxes and tariffs on pollution – a pollution tax that reduces pollution to the socially “optimal” level is set at a level where the benefits to society (for example, increased production) outweigh the costs.

Better defined property rights – the legal ownership rights that others are prohibited from violating without compensation.

An overview of Environmental Law and Economics - Sheet4
Pillars of Sustainability_©


These strategies all rely on government interference in the market. 

  • Carbon offsetting – the goal is to offset or compensate for carbon emissions
  • Cap and trade – companies are allowed to emit carbon up to a certain point, after which they must pay tax.
  • Carbon tax – the government taxes the companies according to the amount of carbon produced.

What Is Environmental Law?

An overview of Environmental Law and Economics - Sheet5
Environmental Law_©

Environmental law is a term used to govern how humans interact with the environment. It has historically been viewed as a means of reducing pollution and conserving and allocating natural resources. However, it has grown to encompass corporate law, international environmental governance, international trade, sustainable growth and development, food law, and climate change.

Some vital international laws are the Aarhus Convention, the Biological Weapons Convention, the Convention on the Conservation of Antarctic Marine Living Resources, the Framework Convention on Climate Change, and the World Heritage Convention. 

Types Of Environmental Law

  • Command-and-control legislation – the most prominent forms of regulated activity involve actual discharges of pollutants into the environment. Another activity regulated by command-and-control legislation is environmentally harmful trade, such as trade in wildlife
  • Environmental assessment mandates – mandatory environmental assessments protect the environment indirectly by increasing the quantity and quality of publicly available information on the environmental consequences of contemplated actions. This information helps government officials make better decisions and increases the public’s involvement in environmental policy development.
  • Economic incentives financial rewards provided to people to influence their behaviour to produce desired consumption and production patterns in an economy.


The following principles help illustrate environmental law around the world:

  • Public Participation and Transparency – the UNEP (United Nations Environmental Programme) states the need to protect human rights on opinions and to seek and impart ideas. There is also a right to access information appropriately and time from governments holding data over any aspect of environmental protection.
  • Cross-border responsibility – refers to the obligation of governments to protect their environment and to prevent damage by their activities to neighbouring nations.
  • Equity and Equality – aims to ensure that future generations enjoy the same or better benefits as the preceding generations.
  • Polluter Pays – stands for the idea that the environmental costs of commercial activity, including the cost of mitigating future damage, should be undertaken by those responsible for it instead of being imposed on the public. 
  • The Precautionary Principle – states that when there is a threat of environmental damage, governments must not use scientific uncertainty to abdicate responsibility or postpone measures.
  • Prevention – looks at the analysis of potential harms in such processes as risk assessment and puts in place measures for preventing incidents, accidents, and worst-case scenarios.
  • Sustainable Development – defined by UNEP as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
An overview of Environmental Law and Economics - Sheet6
Plant growing in the ground_©jcomp at

Resource Sustainability Laws

  • Forestry and landscape sustainability
  • Impact assessment and monitoring
  • Mineral resource sustainability
  • Water resource sustainability
  • Wildlife and plants
  • Fish and game

Pollution Control Laws

  • Air quality
  • Water quality
  • Waste management
  • Contaminant clean-up
  • Chemical safety

Environmental law is known to be controversial, as discussions over the necessity, fairness, and expense of environmental regulation are frequent. 

Relationship Between Architecture and The Environment

Green architecture_©

Good building design recognizes the relationship with the surrounding environment and strives to produce a healthy indoor environment while adapting to the surrounding landscape. That entails imposing minimal harm through pollution and resource depletion by considering the building’s energy efficiency, indoor air quality, and level of sustainability. Environmental law regulates the building and construction industry through various global green laws, regulations, and guidelines.

Reference List

  1. Environmental Science (2022). Environmental Law: Government and Public Policy Towards the Environment [online]. Available at:  [Accessed: 08 November 2022]
  2.  Yale Law School Career Development Office (2022). Environmental Law [online]. Available at:  [Accessed: 08 November 2022] 
  3. I. Campbell-Mohn C.  (2022). Environmental Law [online]. Available at: [Accessed: 08 November 2022]
  4. Chen J. (2022). Environmental Economics: Definition, Importance, and Example [online]. Available at: [Accessed: 08 November 2022]
  5. Wikipedia (2022). Environmental economics [online]. Available at: [Accessed: 08 November 2022]
  6. WallStreetMojo (2022). Environmental Economics [online]. Available at:  [Accessed: 08 November 2022]
  7. Wikipedia (2022). Environmental law [online]. Available at: [Accessed: 08 November 2022]
  8. Legal Career Path (2022). What is Environmental Law? [online]. Available at:  [Accessed: 08 November 2022]
  9. Nigerian Scholars (2022). Better-Defined Property Rights [online]. Available at:  [Accessed: 11 November 2022]
  10. WallStreetMojo (2022). Economic Incentives [online]. Available at:  [Accessed: 11 November 2022]

A graduated BSc. in Architecture and soon-to-be master’s student, aspiring to specialize in sustainable and energy-efficient built environment. Having lived in both the Middle East and Europe has ignited travel as a passion, which she considers a valuable learning experience in the architectural profession, contributing to a spark to explore further through writing at RTF.