F1ES 4000 - Environmental Economics: Policy, Damages and Distribution (Lecture)

The course gives an introduction to environmental economics, with a focus on economic policy instruments, evaluation of damages, and the distributional effects of environmental policy. You will become familiarized with the reasoning and concepts that are used in economics to analyse environmental policy issues (public goods, externalities, double dividend), and understand the difference between efficiency and cost-effectiveness. Based on some important case studies (the US SO2 emissions market, the EU-ETS, climate policy), you will learn the different conditions for when emission standards, pigovian taxes, or tradable emission permits are the most applicable. The course will give you an understanding of the different methods that are used in economics to assign a monetary value to environmental improvements (or degradations) that go into a social cost-benefit analysis (CBA). When discussing climate policy, we will focus on the conceptual differences between Integrated Assessment Models that aim at a CBA and a carbon budget perspective.

Learning Outcomes:

• Become familiarized with economic analysis of environmental policy issues.
• Understand economic valuation methods and interpret the results.
• Knowledge of the differences between the different economic policy instruments used in environmental policy, in particular pigovian taxes and tradable emission permits.
• Knowledge of important case studies in environmental policy.

Professional Skills:

-Written presentation skills

-Identifying the economic issues in policy documents and approaches to discussing them, through comments on articles from magazines and thinktanks (this will be a task in the course’s written exams)

-Designing content for and creating a short video.

While an introductory course in economics is strongly recommended, it is not mandatory. (Students with diverse backgrounds have performed well in the course by putting in the necessary amount of work.) The course aims to be as accessible as possible, using graphical arguments mainly, as well as some simple algebra and calculus.

Students will receive short written feedback on assignments that are handed in to the professor. For presentations in class (if applicable), the professor will give feedback directly. Grading of in-class exams will be explained by an answer sheet (for the midterm) and short comments on the exams. But most of all, everyone will learn from discussions in class, and students are encouraged to ask questions on the subject matter directly in class.

The course assessment will be based on an average of the grades obtained in

(The video project on an economic policy instrument for environmental policy will be completed in groups of three to four students)

• In Class Presence: 2 hours a week / 24 hours a semester
• Online learning activities (contributing to moodle discussion): 0.5 hours a week / 6 hours a semester
• Reading and Preparation for Class: 2 hours a week / 24 hours a semester
• Research and Preparation for Group Work (in tutorials): 1 hour a week / 12 hours a semester
• Research and Writing for Individual Assessments: 1 hour a week / 12 hours a semester