Energy Economics

This up and coming career option deals with the consumption and supply of energy on a macroeconomic scale. Energy economists analyse energy markets and financial decisions that affect the global energy market. Energy commodities include gasoline, electricity, natural gas, coal etc. In recent years, natural resources like crude oil and geothermal deposits have been decreasing at an alarming rate and it is imperative that we now conserve these energy resorces and learn to use them efficiently. The objective of energy economics is to use these natural resources without degarding the environment in any way. This can be done because energy can be neither created nor destroyed. Rather, it can only be converted into different forms. Also, energy taken from the physical environment ultimately has to return back. So, energy has to be converted into renewable forms like solar, wind and hydroelectric energy to keep the environmental impact to a minimum.

In economics, energy will always have positive demand no matter what the price becomes. Because of this, energy is seen as an essential good. Meaning some portion of the consumer’s income always goes toward energy. As such, the public policies that affect the global energy market should be taken very seriously. The main concerns that energy economists have to deal with are the demand and supply for each of the main fossil fuels and the competition for these fuels and of course, the impact these fuels have on the environment.

Energy economists can be classified into resource and environmental economics, mineral economics, and energy. Each of these three specialities arose because of different perceived needs and they all have different bases. Resource and environmental economics arose due to a federal government study on natural resource availability. After seeing the problems with availability of natural resources, the US setup Resources for the Future, a research institute that dealt with managing natural resources. Mineral economics came about in the 1930s when mineral extraction issues were being faced. Finally, energy economics as a separate speciality came about in the 1970s when there was a energy crisis and the people needed some organisation that dealt with these kind of issues.

Thus, energy economics is a very viable field to pursue a career in as they are more in demand now than they ever have been.

-Siddhant Kulkarni

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