Environment

Environment Man’s life is interconnected with various other living and non-living things. The life also depends on social, political, ethical, philosophical and other aspects of economic system. In fact, the life of human beings is shaped by his living environment. The relationship between the economy and - - Environmental Economics the environment is generally explained in the form of a “ Material Balance Model’ ’ developed by AlenKneese and R.V. Ayres. The model considers the total economic process as a physically balanced flow between inputs and outputs. Inputs are bestowed with physical property of energy which is received from the environment. The interdependence of economics and environment is given in the figure10. and flow diagram B A E Size of GDP Environmental Quality Abatement Cost Figure . Recycled (R r c ) Recycled (R r p ) Raw Material (M) Residuals(R p ) Discharged (R d p ) Goods (G) Residuals Discharged (R d c ) (R c )