AECO 25A20 - Introduction to Environmental Economics

This course is an introduction to the field of Environmental Economics. Environmental economics is concerned with the impact of the economy on the environment, the significance of the environment to the economy, and the appropriate way of regulating economic activity so that a balance is achieved among environmental, economic, and other social goals. Environmental problems have become part of the most important problems our societies are facing. Environmental economics uses economic tools to understand these problems and propose solutions to them. A key question of economics is how scarce resources are allocated. Indeed, this question is also at the core of many of our most challenging environmental issues. Unregulated markets lead to an overuse of natural resources such as the atmosphere, oceans, land, and other natural habitats. Economic analysis can guide public policy to efficient utilization of these resources in a world of increasing scarcity and competing demands. In this course, we will discuss how. To this end, we will focus on three questions:

Why do unregulated markets cause environmental problems?

What is the socially optimal degree of environmental protection and how can it be determined?

How can the government regulate the economy to protect the environment more efficiently?

Once equipped with the toolkit of an environmental economist, we will discuss the major environmental problem of our time: global warming. Moreover, we will discuss other environmental issues such as air pollution and biodiversity loss.

Environmental Economics is a quantitative field. The course will make use of formal theoretical and empirical models. Students should be familiar with an intermediate level of mathematics before taking the class. The required level is the one from the course "MATHEMATIQUES APPLIQUEES AUX SCIENCES HUMAINES ET SOCIALES –Niveau intermédiaire."

-Acquire an overview of the main environmental problems of our time

• Understand the key concepts of environmental economics: Efficiency, Externalities, Public Goods, Market failures, Sustainability
• Understand how to apply economic concepts to solve concrete environmental problems (Pollution, Climate Change, Biodiversity Loss). Understand the challenges of doing so.