KECD 2345 - PUBLIC AND ENVIRONMENTAL ECONOMICS

1 Introduction

In this class, we will study topics in Public Finance and Environmental Economics. The course consists of three parts.

In the first part of the course, we will focus on the theory of optimal taxation. We will discuss how taxes affect economic behaviour and the welfare of citizens. We will then discuss how the government can optimize taxes to finance public goods and achieve its redistributive goals.

In the second part of the course, we will introduce environmental externalities. We will discuss which policy instruments the government can use in their presence to improve social welfare. In particular, we will discuss the effect of environmental policies on inequality and how the government can address these effects. We will also discuss methods to evaluate environmental policies. Moreover, we will discuss climate change and various climate policies..

In the third part of the course, students will present a research paper related to the topics studied in parts 1 and 2.

Evaluation

• Participation (10%): Students are expected to participate in class by asking questions.
• Presentation (45%): Students will form groups and present a research paper related to the topics discussed in class.
• Final exam (45%): Takes place in the last session.

Lectures

1 Introduction (Lecture 1)

2 Public Finance (Lecture 2-5)

• The effects of taxation: distortions and welfare losses
• Inequality and taxation: optimal income taxes

3 Environmental Economics (Lecture 6-8)

• Environmental externalities and policy instruments
• Environmental policies and inequality
• Climate change and climate policies

4 Student Presentations (Lecture 9-11)

5 Final Exam