Facoltà di Economia

Aggiornato A.A. 2019-2020

Course Content

This course aims at providing students with the analytical tools and methodological skills that are necessary to understand the origins of environmental problems, and to identify the appropriate policies to solve them. During the course, the most recent developments and debates in environmental and natural resource economics are addressed.

Environmental economics studies the complex interrelations between economics and the environment. The starting point of the analysis is the recognition that in several cases markets do not provide the right amount of environmental protection, and that some government intervention is needed to balance different social needs. In a world where human pressure and economic activities stress the environment by exploiting fisheries, forests, minerals, energy sources, and other environmental resources, it is increasingly important to study how economic tools can be used to develop sustainable environmental approaches and policies.

During the course, a selection of specific topics will be presented at an intermediate-advanced level:
 

1. The sources of environmental problems: property rights, externalities and the Tragedy of the Commons

2. Pollution: efficient targets and policy responses

3. Climate change issues

4. Energy issues

5. Behavioral environmental economics

6. Waste management and policies

 

SUGGESTED READINGS:

Perman, R. et al. (2011), “Natural resource and environmental economics”, Third Edition, Pearson: relevant chapters: 2, 5, 6, 7, 8, 15.

Further readings (slides, reports and journal articles) will be available on the course website.

Aggiornato A.A. 2018-2019

Instructors:
Prof. Timo Goeschl
Prof. Mariangela Zoli

Course Content

The course has three components that work individually and together.
The first block introduce the field, methods, and concepts of Environmental Economics. Environmental problems are problems of economic externalities. These externalities give rise to inefficiencies such as undesirable negative health effects, decreases in productivity, and other forms of welfare loss. Many of these inefficiencies could be avoided through the consistent application of the principles of microeconomics and welfare economics. These principles explain the economic drivers of environmental damages, help determine desirable policy outcomes, and assist in the design and implementation of environmental policy instruments. This course offers the tools and concepts for thinking conceptually and analytically about the welfare economics of environmental pollution at a graduate level.

The second block introduces experimental economics as a method, discusses the game forms of greatest importance to environmental economists (public good game, common-property extraction game) and their core findings, and examines three uses of experimental methods in environmental economics: Theory-testing, test-bedding, and the valuation of non-market goods.

The third part of the course addresses some specific topics in environmental and natural resource economics. In a world where human pressure and economic activities stress the environment by exploiting fisheries, forests, minerals, energy sources, and other environmental resources, it is increasingly important to study how economic tools can be used to develop sustainable environmental approaches and policies.

Schedule

1 Introduction to Environmental Economics: the topics, concepts, and theoretical framework [P&R 1,2]
2 Fundamental issues: Damages, Externalities & Instruments [P&R  3]
3 Regulation under Imperfect Information [P&R 4]
4 Cap and Trade [P&R 8]
5 Non-point Source Pollution [P&R 9]
6 The Experimental Paradigm: Concepts and Methods
7 Key Game Forms and Core Results for the Environmental Economist
8 Experiments for Theory Testing in Environmental Economics
9 Experiments for Test-Bedding Environmental Policies
10 Experiments in Non-Market Valuation
11 International environmental problems
12 Climate change
13 Exhaustible resources
14 Energy
15  Renewable resources
16 Waste as externality
17 Waste management policies
18 Environmental crime

Readings

- Phaneuf, D. and T. Requate (2017): A Course in Environmental Economics. Theory, Policy, and Practice. Cambridge University Press [P&R]

- Normann, Hans-Theo, und Roberto Ricciuti. 2009. „Laboratory experiments for economic policy making“. Journal of Economic Surveys 23 (3): 407–32.

- Greenstone, M., & Gayer, T. (2009). Quasi-experimental and experimental approaches to environmental economics. Journal of Environmental Economics and Management, 57(1), 21-44.

- Perman, R. et al. (2011), “Natural resource and environmental economics”, Fourth Edition, Pearson;

Further readings (slides, reports and journal articles) will be available on the course website.

Aggiornato A.A. 2017-2018

Aim and program of the course: This course aims at providing students with the analytical tools and methodological skills that are necessary to understand the origins of environmental problems, and to identify the appropriate policies to solve them. During the course, the most recent developments and debates in environmental and natural resource economics are addressed. Environmental economics studies the complex interrelations between economics and the environment. The starting point of the analysis is the recognition that in several cases markets do not provide the right amount of environmental protection, and that some government intervention is needed to balance different social needs. In a world where human pressure and economic activities stress the environment by exploiting fisheries, forests, minerals, energy sources, and other environmental resources, it is increasingly important to study how economic tools can be used to develop sustainable environmental approaches and policies. During the course, a selection of specific topics are presented at an intermediate-advanced level: 1. The sources of environmental problems: property rights, externalities and the Tragedy of the Commons This part of the course introduces the general conceptual framework used to approach environmental problems. The way in which producers and consumers use environmental resources depends on the property rights governing those resources. It will be shown that in several cases environmental problems arise from violations of the characteristics, which define an efficient property rights structure. 2. Pollution: efficient targets and policy responses The problem of pollution is a major concern of environmental economics. Depending on the mechanisms through which pollution damages the environment, different targets and policies can be identified. Methods of attaining pollution targets are considered also in contexts characterized by limited information, uncertainty, non-perfectly competitive markets, irreversibilities. 3. Climate change issues Climate change is recognized as the major environmental problem facing the planet. This part of the course provides an overview of international policy negotiations, the role of Carbon Markets, Carbon Finance and the Kyoto Mechanisms (Emissions trading - the European Union Emission Trading Scheme, the Clean Development Mechanism and the Joint Implementation). 4. Energy issues This part of the course will be devoted to the analysis of energy markets, by considering problems related to the dependence on fossil fuels but also issues emerging in the transition towards alternative sources (non-conventional hydrocarbons – shale gas and oil; uranium; renewables). 5. Waste management and policies Inefficiencies in waste production and disposal decisions depend on wrong individual incentives (of both producers and consumers). Traditional policy instruments (i.e. taxes, subsidies, fines, etc.) can affect individual choices, but, in several cases, alternative, behavioral policy instruments may be more effective. This part of the course will review some of the most recent scientific papers dealing with extrinsic and intrinsic motivations for individual behaviors, the emergence of social norms, and the role of behavioral instruments. SUGGESTED READINGS: Perman, R. et al. (2011), “Natural resource and environmental economics”, Fourth Edition, Pearson; Xepapadeas A. (1997), “Advanced principles in environmental policy”, Edward Elgar Pub. Further readings (slides, reports and journal articles) will be available on the course website. Learning Outcome Knowledge and Understanding The course provides students with the knowledge and theoretical basis needed to understand and analyze environmental policy issues. In particular, the lectures provide students with: - the ability to describe environmental problems related to the growth and development of modern economic systems; - a detailed understanding of the theoretical framework that analyzes the interaction between economic and environmental system, of the concepts of efficiency (static and dynamic) in using natural resources, as well as the concepts of environmental sustainability and equity; - the ability to understand problems related to climate change, opportunities and limits of the international cooperation, the relative merits and drawbacks of the main policy instruments (command-and-control and incentive-based instruments), the role of behavioral policy instruments; - understanding of the main issues related to energy demand and supply, waste management problems and policy responses; - knowledge of mathematical and statistical analyses applied to environmental issues. Applying Knowledge and Understanding The concepts acquired during the course will help students to understand more clearly problems related to climate change, sustainable development and the optimal use of natural resources, to critically discuss the concepts of efficiency (static and dynamic), to evaluate and manage environmental damages, to critically discuss and make proposals concerning the sources of local pollution and waste problems. Knowledge and skills developed during the lectures will enable students to identify the advantages and limitations of the various policy instruments and to formulate concrete policy proposals to tackle environmental problems.

Aggiornato A.A. 2016-2017

Aim and program of the course:

This course aims at providing students with the analytical tools and methodological skills that are necessary to understand the origins of environmental problems, and to identify the appropriate policies to solve them. During the course, the most recent developments and debates in environmental and natural resource economics are addressed.

Environmental economics studies the complex interrelations between economics and the environment. The starting point of the analysis is the recognition that in several cases markets do not provide the right amount of environmental protection, and that some government intervention is needed to balance different social needs. In a world where human pressure and economic activities stress the environment by exploiting fisheries, forests, minerals, energy sources, and other environmental resources, it is increasingly important to study how economic tools can be used to develop sustainable environmental approaches and policies.

During the course, a selection of specific topics will be presented at an intermediate-advanced level:
1. The sources of environmental problems: property rights, externalities and the Tragedy of the Commons
This part of the course introduces the general conceptual framework used to approach environmental problems. The way in which producers and consumers use environmental resources depends on the property rights governing those resources. It will be shown that in several cases environmental problems arise from violations of the characteristics, which define an efficient property rights structure.
2. Pollution: efficient targets and policy responses
The problem of pollution is a major concern of environmental economics. Depending on the mechanisms through which pollution damages the environment, different targets and policies can be identified. Methods of attaining pollution targets are considered also in contexts characterized by limited information, uncertainty, non-perfectly competitive markets, irreversibilities.
3. Climate change issues
Climate change is recognized as the major environmental problem facing the planet. This part of the course provides an overview of international policy negotiations, the role of Carbon Markets, Carbon Finance and the Kyoto Mechanisms (Emissions trading - the European Union Emission Trading Scheme, the Clean Development Mechanism and the Joint Implementation).
4. Energy issues
This part of the course will be devoted to the analysis of energy markets, by considering problems related to the dependence on fossil fuels but also issues emerging in the transition towards alternative sources (non-conventional hydrocarbons – shale gas and oil; uranium; renewables).
5. Waste management and policies
Inefficiencies in waste production and disposal decisions depend on wrong individual incentives (of both producers and consumers). Traditional policy instruments (i.e. taxes, subsidies, fines, etc.) can affect individual choices, but, in several cases, alternative, behavioral policy instruments may be more effective. This part of the course will review some of the most recent scientific papers dealing with extrinsic and intrinsic motivations for individual behaviors, the emergence of social norms, and the role of behavioral instruments.

SUGGESTED READINGS:
Perman, R. et al. (2011), “Natural resource and environmental economics”, Fourth Edition, Pearson;
Xepapadeas A. (1997), “Advanced principles in environmental policy”, Edward Elgar Pub.

Further readings (slides, reports and journal articles) will be available on the course website.

 

Learning Outcome

Knowledge and Understanding

The course provides students with the knowledge and theoretical basis needed to understand and analyze environmental policy issues. In particular, the lectures provide students with:
- the ability to describe environmental problems related to the growth and development of modern economic systems;
- a detailed understanding of the theoretical framework that analyzes the interaction between economic and environmental system, of the concepts of efficiency (static and dynamic) in using natural resources, as well as the concepts of environmental sustainability and equity;
- the ability to understand problems related to climate change, opportunities and limits of the international cooperation, the relative merits and drawbacks of the main policy instruments (command-and-control and incentive-based instruments), the role of behavioral policy instruments;
- understanding of the main issues related to energy demand and supply, waste management problems and policy responses;
- knowledge of mathematical and statistical analyses applied to environmental issues.

Applying Knowledge and Understanding

The concepts acquired during the course will help students to understand more clearly problems related to climate change, sustainable development and the optimal use of natural resources, to critically discuss the concepts of efficiency (static and dynamic), to evaluate and manage environmental damages, to critically discuss and make proposals concerning the sources of local pollution and waste problems. Knowledge and skills developed during the lectures will enable students to identify the advantages and limitations of the various policy instruments and to formulate concrete policy proposals to tackle environmental problems.

Aggiornato A.A. 2015-2016

Aim and program of the course:

This course aims at providing students with the analytical tools and methodological skills that are necessary to understand the origins of contemporary environmental problems, and to identify the appropriate policies to solve them. During the course, the most recent developments and debates in environmental and natural resource economics are addressed to students.

Environmental economics studies the complex interrelations between economics and the environment. The starting point of the analysis is the recognition that in several cases markets do not provide the right amount of environmental protection, and that some government intervention is frequently needed to balance different social needs. In a world where human pressure and economic activities stress the environment by exploiting fisheries, forests, minerals, energy sources, and other environmental resources, it is increasingly important to study how economic tools can be used to develop sustainable environmental approaches and policies.

During the course, a selection of specific topics of environmental economics will be treated at an intermediate-advanced level:

1. The sources of environmental problems: property rights and externalities

This part of the course introduces the general conceptual framework used to approach environmental problems. After an examination of the relationship between human actions, as manifested through the economic system, and the environmental system (intended both as a source of resources and a sink), some of the most commonly used criteria for judging the desirability of the outcomes of this relationship are discussed. The manner in which producers and consumers use environmental resources depends on the property rights governing those resources. It will be shown that it is from violations of the characteristics which define an efficient property rights structure that environmental problems can arise.

2. Pollution: efficient targets and policy responses

The problem of pollution is a major concern of environmental economics. On the basis of the mechanisms through which pollution damage the environment, different targets and policies can be identified. Methods of attaining pollution targets are considered also in contexts characterized by limited information, uncertainty, non-perfectly competitive markets, irreversibilities. Since many environmental problems spill over national boundaries, particular attention is devoted also to international cooperation and agreements.

3. Climate change issues

Climate change is widely recognized as the major environmental problem facing the planet. This part of the course provides an overview of the history of the international policy negotiations, with a specific focus on Carbon Markets, Carbon Finance and the Kyoto Mechanisms (Emissions trading - the European Union Emission Trading Scheme, the Clean Development Mechanism and the Joint Implementation).

4. Dynamic efficiency and sustainable development

The discussion of the main criteria that are relevant to identify environmental problems is the focus of this part of the course. Besides the two concepts of efficiency (static and dynamic efficiency), other equity arguments are analyzed, with particular reference to the allocation of a depletable resource over time.

5. Energy issues

Energy is the life-blood that drives our economy. World primary energy demand is expected to increase dramatically in the next 25 years. Most of this demand will come from developing countries, especially India and China. Meeting this demand will not be easy in a global energy system constrained by geopolitical insecurities, scarcities of energy supply and use, and growing regulatory pressures to reduce carbon emissions from the burning of fossil fuels. This part of the course will be devoted to the analysis of energy markets, by considering our dependence from fossil fuels but also problems emerging in the transition to other sources (non-conventional sources – shale gas and oil; uranium; renewables).

6. Waste management and policies

Inefficiencies in waste production and disposal decisions depend on wrong individual incentives (of producers and consumers). After an examination of waste problems, this lecture will review the recent economic literature on extrinsic and intrinsic motivations for individual behaviors.

EXAM:

The final exam is a written test consisting of two questions, where students are required to discuss some topics among those presented in class.

SUGGESTED READINGS:

Perman, R. et al. (2003), “Natural resource and environmental economics”, Pearson; Xepapadeas A. (1997), “Advanced principles in environmental policy”, Edward Elgar Pub.

Further readings (slides, reports and journal articles) will be provided during the course (available on the course website).

Aggiornato A.A. 2014-2015

Aim and program of the course:
This course aims at providing students with the analytical tools and methodological skills that are necessary to understand the origins of contemporary environmental problems, and to identify the appropriate policies to solve them. During the course, the most recent developments and debates in environmental and natural resource economics are addressed to students.
Environmental economics studies the complex interrelations between economics and the environment. The starting point of the analysis is the recognition that in several cases markets do not provide the right amount of environmental protection, and that some government intervention is frequently needed to balance different social needs. In a world where human pressure and economic activities stress the environment by exploiting  fisheries, forests, minerals, energy sources, and other environmental resources, it is increasingly important to study how economic tools can be used to develop sustainable environmental approaches and policies.

During the course, a selection of specific topics of environmental economics will be treated at an intermediate-advanced level:

1. The sources of environmental problems: property rights and externalities
This part of the course introduces the general conceptual framework used to approach environmental problems. After an examination of the relationship between human actions, as manifested through the economic system, and the environmental system (intended both as a source of resources and a sink), some of the most commonly used criteria for judging the desirability of the outcomes of this relationship are discussed. The manner in which producers and consumers use environmental resources depends on the property rights governing those resources. It will be shown that it is from violations of the characteristics which define an efficient property rights structure that environmental problems can arise.

2. Pollution: efficient targets and policy responses
The problem of pollution is a major concern of environmental economics. On the basis of the mechanisms through which pollution damage the environment, different targets and policies can be identified. Methods of attaining pollution targets are considered also in contexts characterized by limited information, uncertainty, non-perfectly competitive markets, irreversibilities. Since many environmental problems spill over national boundaries, particular attention is devoted also to international cooperation and agreements.

3. Climate change issues
Climate change is widely recognized as the major environmental problem facing the planet. This part of the course provides an overview of the history of the international policy negotiations, with a specific focus on Carbon Markets, Carbon Finance and the Kyoto Mechanisms (Emissions trading - the European Union Emission Trading Scheme, the Clean Development Mechanism and the Joint Implementation).

4. Dynamic efficiency and sustainable development
The discussion of the main criteria that are relevant to identify environmental problems is the focus of this part of the course. Besides the two concepts of efficiency (static and dynamic efficiency), other equity arguments are analyzed, with particular reference to the allocation of a depletable resource over time.

5. Energy issues
Energy is the life-blood that drives our economy. World primary energy demand is expected to increase dramatically in the next 25 years. Most of this demand will come from developing countries, especially India and China. Meeting this demand will not be easy in a global energy system constrained by geopolitical insecurities, scarcities of energy supply and use, and growing regulatory pressures to reduce carbon emissions from the burning of fossil fuels. This part of the course will be devoted to the analysis of energy markets, by considering our dependence from fossil fuels but also problems emerging in the transition to other sources (non-conventional sources – shale gas and oil; uranium; renewables).

6. Waste management and policies
Inefficiencies in waste production and disposal decisions depend on wrong individual incentives (of producers and consumers). After an examination of waste problems, this lecture will review the recent economic literature on extrinsic and intrinsic motivations for individual behaviors.

SUGGESTED READINGS:

Perman, R. et al. (2003), “Natural resource and environmental economics”, Pearson; 

Xepapadeas A. (1997), “Advanced principles in environmental policy”, Edward Elgar Pub.

Further readings (slides, reports and journal articles) will be provided during the course (available on the course website).