Chapter 14 Regional energy and environmental analysis This chapter focuses on regional energy and environmental analysis. A basic feature of economic activity is the extraction of materials from the environment their transformation during production and consumption and their final restoration to the environment. The economics of environmental resources focuses on the types forms and quantities of materials returned their destinations and the laws institutions and markets governing their return to the environment. Energy economics is concerned with similar issues pertaining to the removal and use of energy resources from the environment. The chapter discusses the meaning of energy and environmental resources and describes their special characteristics that are thought to make the regional implications of their production important. It also discusses the effects of energy markets and the importance of energy rents in the interregional distribution of income and elaborates the role of environmental rents in the interregional distribution. The analysis of the distributional effects of energy and environmental resources is an important example of how regional economics is a fruitful approach. The chapter also describes a number of available formal theoretical and empirical models for the analysis of regional effects of the production and use of energy and environmental resources.