Question

explain the linkages between the economy and the environment​

Answer 1

Let us begin by considering in general the ways in which the economy and the environment are interlinked. Then we will look at how environmental economics has developed and the scope of the subject. We employ the typical characterisation found in many textbooks and assume that the economy can be divided into two sectors: production and consumption. These sectors use the environment in three main ways.

: as a supplier of natural resource inputs

: as a supplier of environmental or amenity goods

: in its capacity as waste sink

Using the environment in one of these ways may affect the other uses, as will become clear in the following discussion.