Those who are children today will inherit a world facing more widespread and complex ecological challenges than any of their ancestors did. Teaching kids to tackle these challenges with creativity and interest is of utmost importance.

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[edit] Steps

Teach kids to enjoy natural beauty . Take kids hiking, go for walks in the local park, beachcomb, garden, or set up a backyard bird feeder. You can also show them photographs and nature videos, and take them to zoos, aquariums and natural history museums.
Give kids concrete projects , such as recycling at school, starting a garden, planting trees, or riding their bike instead of asking for a ride. Start good habits, such as saving water or electricity. Explain how these habits are good for the environment.
Have kids teach each other by giving presentations in small groups, or working together on an outdoor project, like picking up litter in teams.
Introduce conservation concerns slowly, once kids are old enough.
Explain problems in manageable pieces . Kids, with limited world experience, are easily overwhelmed. For example, don't say: "Birds all over the world are endangered.", as that will make the child fearful and overwhelmed. Instead , say: "Lots of birds lose their nests when people cut down lots of trees. What should we do about that?"
Present both sides of every issue. For example, say: "Overfishing is bad, because it kills off lots of species. But fishermen work very hard and need those fish to feed their families."
Encourage problem solving . Instead of presenting a solution, explain to the child what is going on, and ask them to think of a solution. For example: "Humans need to build houses, but animals also need that space for their homes. How do you think we could work this out?"
Encourage political action . Help the child write a letter to a Senator, Mayor, Governor other representative. This teaches the child to be active in the political process and feel they can effect large-scale change.
Show examples of positive change . For example, talk about how Bald Eagles nearly went extinct, but were saved because people did a few simple things.
Lead by example Join the Audubon Society, Nature Conservancy, or some other environmental group. Show your child your involvement; let them come to events if possible.
Introduce them to other families who share your environmental values.

[edit] Tips

Keep your explanations positive. Instead of emphasizing the scale of a problem, emphasize the importance of individual action.
Keep your explanations honest but simple. Your child will probably be confused if you talk about the microeconomics of a fishery. However, they need to know that fishermen as well as fish need to be considered in solutions.

[edit] Warnings

Discourage environmental fanaticism that harms others. If your child hears an eco-terrorist group such as PETA, explain to them that it's important to be kind to both people and the environment, and that hurting people or their property doesn't make the problem go away.