The critical difference in the study of natural resource economics and the environmental economics is that the natural resource economics aims at the demand, supply, and the distribution of natural resources, while environmental economics studies the environmental issues study like the benefits and costs of the environmental policies in dealing with pollution and global warming.

Therefore, natural resource economics will study the biotic and the abiotic resources of the earth, how they are distributed on the earth's surface, meaning, how much a nation is endowed with a resource, and how this allocation affects the demand and supply in the marketplace. On the other hand, environmental economics deals with issues like externalities. Externalities are the effects choices have on individuals, either positive or negative. For example, the emission of pollutants or using a vehicle has effects on individuals. The common public goods, which are the goods that are too expensive for individuals to access. Furthermore, market failure, where markets fail inefficient allocation of resources.