Introduction

At Higher Level (HL), IB Environmental Systems and Societies (ESS) expands beyond ecological science to include economics. For the 2026 first assessment, HL students must be able to explain how economic theories and policies shape sustainability outcomes.

This makes economics in ESS both challenging and exciting. It helps students see how resource use, environmental impacts, and global inequality are driven not just by science, but also by market systems, pricing, and international cooperation. To succeed, you’ll need to connect economics directly to sustainability case studies and exam questions.

Quick Start Checklist for HL Students

When revising economics and sustainability, make sure you can:

• Define sustainability in economic terms.
• Explain market failures and externalities.
• Link economics to resource management and ecological footprints.
• Evaluate policies such as taxes, subsidies, and trading schemes.
• Use case studies of economic solutions.

Economics and Sustainability in the ESS Syllabus

Economics appears in HL under three main themes:

1. Resource Economics
   • How resources are valued and priced.
   • Why renewable resources are often undervalued.
   • Overuse of common-pool resources (e.g., fisheries, forests).
2. Market Failures and Externalities
   • Environmental problems often occur because markets fail to account for external costs.
   • Example: coal power appears cheap but ignores health costs and carbon emissions.
3. Environmental Policies and Solutions
   • Carbon taxes and subsidies for renewables.
   • Cap-and-trade systems for emissions.
   • Payments for ecosystem services.

Key Economic Concepts in ESS HL

• Tragedy of the Commons: overuse of shared resources without regulation.
• Externalities: hidden costs of production or consumption (e.g., pollution).
• Cost-Benefit Analysis (CBA): weighing economic, social, and environmental outcomes.
• Sustainable Development: balancing growth with ecological limits.

Case Studies for Economics and Sustainability

• EU Emissions Trading Scheme (ETS): cap-and-trade policy reducing emissions in Europe.
• Carbon Tax in Sweden: effective at lowering emissions while maintaining economic growth.
• Amazon Rainforest: economic pressures of deforestation for cattle and soy.
• Costa Rica: payments for ecosystem services supporting forest conservation.

How Economics Is Tested in ESS HL Exams

Paper 1

• HL-specific questions may include data on costs, benefits, or emissions policies.

Paper 2

Essay-style questions may include:

• “Evaluate the role of economic policies in achieving sustainability.”
• “Discuss how externalities influence environmental decision-making.”

Exam Tips for HL Students

1. Link economics to sustainability. Always bring answers back to ecological limits.
2. Balance perspectives. Show how policies affect governments, businesses, and communities.
3. Use case studies. Sweden’s carbon tax and Costa Rica’s PES are especially strong.

FAQs

1. Do I need to know detailed economic formulas?
No. ESS HL requires conceptual understanding rather than complex calculations.

2. How deep should I go into policies like carbon trading?
Focus on how they work, their strengths, weaknesses, and real-world examples.

3. Could economic content appear in Paper 1?
Yes, HL students receive extra Paper 1 questions with an economic or policy focus.

Conclusion

Economics is a powerful part of the ESS HL extension because it connects human systems directly to sustainability. By mastering resource economics, externalities, and policy tools—and applying them to case studies—you’ll be prepared to tackle exam questions in the 2026 first assessment.

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