What Is Energy Economics?

Esther Ejim
Esther Ejim
Businesswoman talking on a mobile phone
Businesswoman talking on a mobile phone

Energy economics is a term that is used to describe the deliberate and focused study of the subject of energy and its various related concepts. Some of the related concepts that are studied as part of energy economics include the various sources of energy, the rate of usage stemming from demand, the business aspects of the subject, and the effect that the use of the product has on the environment. Other topics that may be studied under energy economics include the alternatives to the predominant forms of energy and the ability to sustain the current level of energy forms in juxtaposition to the level of demand.

One of the factors that is studied under the subject of energy economics includes the various sources of energy in the sense of the derivable forms of the commodity. Energy in the sense that it applies to the study of energy economics refers to the type of energy that can be converted into some other form of energy to a stated purpose. In this sense, the kinds of energy resources that come to mind are the fossil-based energy sources, including coal and crude oil. This particular resource is currently the predominant source of energy, and the concern with reliance on such sources is the fact that they are limited and will run out one day, which is why they are referred to as nonrenewable. Another consideration with these sources of energy is the fact that the demand for them is far greater than what can be reasonable sustained far into the future.

Under energy economics, other sources of energy will be studied, especially those that can be sustained and that do not have the same sort of detrimental effect on the environment as that of fossil-based energy sources. Included in these sort of alternative energy sources are wind, nuclear power, hydro powers and energy that is derived from solar sources. Other forms of alternative energy sources include the energy that is derived from waste material and the energy that is derived from plant matter, or bioenergy. The effects of these sources of energy are mostly less severe on the environment than the other ones that are based on fossil remains. Another factor that may be studied under this field is the manner in which the energy is distributed in terms of the countries with huge deposits of crude oil and the dynamics of power such a wealth invests in the countries that have it.

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