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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 addressed.
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 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 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
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 agreements.
3. Global pollutants and 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 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
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
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
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.
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, Pearson.
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, Pearson.

Teaching methods

The course is based on in person lectures. Students are encouraged to actively participate in the lectures, interacting with the lecturer and with classmates during the presentations.

Exam Rules

Attending students MAY decide to take an exam in two parts.
First part: students are required to give an in-class 25/30 minute slides-based presentation on journal articles (among those in the list suggested by the instructor), followed by 5 minutes of discussion and questions.
Second part: a written exam consisting in a test where students will be asked to answer to ONLY ONE among two questions. The final grade is the average of the grades obtained in the presentation and in the written test.

The final exam is a written test consisting of two questions. The final grade is the average of the grades obtained in answering to the two questions.