ENVIRONMENTAL ECONOMICS AND POLICY
Updated A.Y. 2022-2023
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 will be addressed.
Environmental economics investigates the complex interrelations between the economic system and the environment. The starting point of the analysis is the recognition that in several cases incentives for citizens and firms towards environmental protection are wrongly shaped, due to several features of environmental goods: government intervention is needed to balance asymmetries between individual and social incentives. 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. An overview of the concept of sustainable development and of the most urgent environmental pressures to date.
2. The economic sources of environmental problems.
2. Pollution: efficient targets and policy responses
3. Climate change
3a. climate change and energy policy
3b. climate risks and environmental disasters
3c. why is climate change policy so complex?
4. The Economics of the Sustainability Transition
5. Dynamic responses to environmental issues: the role of eco-innovation
6. Behavioral drivers: are we rational and selfish when we take decisions that matter for the environment? Bounded rationality; social norms; risk perception
7. Waste management and policies: encouraging recycling and beyond - an introduction to the Circular Economy.
The treatment of these topics will be complemented by discussion on current policy design (including the well known EU Green Deal, the EU Circular Economy Action Plan, Emissions Trading implementation all over the world, the role of Sustainable Finance etc.), as well as, if possible, by classroom games.
Textbook: Perman, R. et al. (2011), “Natural resource and environmental economics”, Third Edition, Pearson. The relevant chapters are:
1. An introduction to natural resource and environmental economics.
2. The origins of the sustainability problem.
4. Concepts of sustainability.
5. Welfare economics and the environment.
II. ENVIRONMENTAL POLLUTION.
6. Pollution control: targets.
7. Pollution control: instruments.
8. Pollution policy with imperfect information.
10. International environmental problems.
IV. NATURAL RESOURCE EXPLOITATION.
14. The efficient and optimal use of natural resources.
15. Non-renewable resources.
Slides, made available on Teams, will be part of the compulsory course material, as some of the covered topics are not included in textbook chapters.
Further readings (reports and journal articles), compulsory or not, may be made available.