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Learning Objectives


The course aims to provide the analytical and quantitative knowledge and skills needed to understand the origin and consequences of environmental problems, and to identify the most appropriate policy responses. At the end of the course, students will be able to read and understand reports and scientific articles on the subject, to comment on environmental policy choices, and to apply the quantitative skills developed in synergy with other courses of the MSc programme. The interdisciplinary teaching approach, consistent with the objectives of the MSc is also in line with the need to understand and explore how environmental problems can be addressed in realistic policy settings.


- detailed understanding and ability to analyze environmental problems arising from growth and development of modern economic systems;
- in-depth knowledge of the theoretical framework on the interactions between economic activities and the environmental system;
- knowledge and understanding of the main determinants of individual behavior relevant to environmental quality;
- knowledge of the concepts of efficiency (static and dynamic) and ability to apply them to the optimal use of natural resources (renewable and non-renewable), knowledge of the concepts of sustainable development and equity in the use of resources;
- understanding of the main issues related to energy production and use;
- ability to understand the problems related to local and global pollution, issues related to climate change, opportunities and limits of international cooperation;
- in-depth understanding of the characteristics of the tools (command-and-control and incentive-based) available to environmental policy authorities and their functioning; understanding of positive and negative aspects related to solutions of a voluntary nature;

The notions, concepts and theoretical and empirical models learned during the course will allow students to understand the concepts of sustainable development and optimal use of natural resources; to critically discuss the concepts of efficiency (static and dynamic); to evaluate the environmental damages and to contribute their management and reduction; to critically discuss and make proposals on local and global pollution, as well as climate change. The knowledge acquired will allow students to identify the pros and cons of the available policy tools and to formulate policy proposals; to understand environmental and energy policies; to understand theoretical and empirical economic-environmental modelling; to collect and process statistical information for monitoring the use of natural resources and environmental impacts. Acquired skills will be useful in the analysis of environmental problems and of environmental policy proposals (as may be required from national and international institutions), but also in theoretical and empirical modeling (doctoral courses or specialization schools).


Theoretical and applied knowledge of environmental issues learned in the classes can be used by students to critically evaluate, in a constructive and unbiased manner, the source of environmental problems and the appropriateness of the solutions proposed by national and international policy-makers.


Students will develop the know how needed to present and articulate complex issues in a formal and rigorous way, as well as the ability to clearly illustrate environmental problems and to foresee scenarios and possible interventions to both specialist and non-specialist audience.


The course provides students with mathematical and analytical formal skills required to interpret environmental issues, to read and understand scientific papers on the topic, to comment governments’ environmental policy choices, to consult and use databases, to write governmental reports and (basic) scientific works.




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 will be
Environmental economics studies the complex relations between economics and the
environment. The starting point of the course 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 will be treated at an intermediate-advanced
1. The sources of environmental problems: property rights and externalities (6 hours)
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 as 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 environmental problems can arise
from violations of the characteristics which define an efficient property rights structure.
2. Pollution: efficient targets and policy responses (8 hours)
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 will be considered also in
contexts characterized by limited information, uncertainty, non-perfectly competitive
markets, irreversibilities. Since many environmental problems spill over national
boundaries, particular attention will be devoted also to international cooperation and
3. Global pollutants and Climate change issues (6 hours)
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 Paris
Agreement. The recent EU Green Deal, aiming at zero net emissions of greenhouse gases
by 2050 in the EU, will also be scrutinized.
4. Dynamic efficiency and sustainable development (4 hours)
This section of the course addresses the optimal allocation of depletable resources (e.g.
oil), by making reference to the concepts of efficiency (static and dynamic), starting from
two period models to consider more complex analytical models (N periods, perfect
competition vs monopolistic market). The links between depletable resources use and
sustainable development will also be discussed.
5. Energy issues (4 hours)
World primary energy demand is expected to increase dramatically in the next 25 years.
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. Behavioral environmental economics (5 hours)
After a brief introduction on the main cognitive biases which affect individual decision
making processes, the course will provide a review of the main contributions of the
environmental economics literature on the drivers of environmental behaviors and on the
use of soft policy instruments.
7. Waste management, policies and the Circular Economy. (3 hours)
Inefficiencies in waste production and disposal decisions depend on wrong individual
incentives (of producers and consumers). After an examination of waste problems, this part
will review the recent economic literature on extrinsic and intrinsic motivations for individual
behaviors. An overview on the so called Circular Economy, will be provided, with special
attention to data and evidence on the transition towards a circular economic system.


Suggested textbooks:
- Phaneuf, D. and T. Requate (2017): A Course in Environmental Economics. Theory,
Policy, and Practice. Cambridge University Press
- Perman, R. et al. (2011), “Natural resource and environmental economics”, Fourth Edition,
Additional references and details will be provided during lectures (and published on the
course website)


Suggested textbooks:
- Phaneuf, D. and T. Requate (2017): A Course in Environmental Economics. Theory,
Policy, and Practice. Cambridge University Press
- Perman, R. et al. (2011), “Natural resource and environmental economics”, Fourth Edition,

Teaching methods

The course is based on in person lectures. Students are encouraged to actively participate
in the lectures.

Exam Rules

The final exam is a written test consisting of two questions. Time available will be 1h and 30
minutes. The two questions will be articulated in subquestions.

The final mark of the exam is expressed im a scale of thirty and will result from the average
marksfor the two questions. The marks will be obtained through the following graduation
Not suitable: important deficiencies in the knowledge and understanding of the topics;
limited ability to analyse and synthesise, frequent generalisations and limited critical and
judgmental skills; topics exposed in an inconsistent manner and with inappropriate
18-20: barely sufficient knowledge and understanding of the subjects, with only a broad and
imperfect understanding; barely sufficient capacity for analysis, synthesis and autonomy of
judgement; topics are exposed in a frequently inconsistent way and with inappropriate
21-23: Knowledge and comprehension of the topics slightly more than sufficient; ability to
analyse and synthesise in sufficient depth; topics exposed with appropriate language.
24-26: Fair knowledge and understanding of the subjects; good ability to analyse and
synthesise; not always appropriate language
27-29: In-depth knowledge and understanding of the topics; considerable capacity for
analysis and synthesis. Good autonomy of judgement. Arguments presented in a rigorous
manner and with appropriate language.
30-30L: Excellent level of knowledge and understanding of the topics. Excellent ability in
the analysis and synthesis of arguments, and independent judgement. Original exposition
and appropriate language.
The final mark will be communicated through the Delphi platform.