ØASØK4200 Environmental Economics Course description

Economic activities impact the environment. Plastics end up in the ocean, producing one T-shirt consumes thousands of liters of water, and salmon farmers pour toxic chemicals into the seas to fight lice infestations. Economists see the natural world around them as providing environmental goods and services that we all enjoy, such as a lake to swim in, drinking water, or a forest that filters the air. Pollution to an economist is an unintended byproduct of activities that are otherwise desirable, like flying to New York, assembling computers, or eating dinner.

This course teaches students to think like economists about a wide range of environmental problems, from small, local ones to the biggest one of them all, climate change. Students learn about the economics of environmental regulation. We can try to reduce pollution in many ways: by providing information, `nudging´ people to `do the right thing´, subsidizing clean technologies, taxing emissions, creating cap-and-trade markets, banning substances, or signing up to international environmental agreements. The students learn how pollution crossing borders complicates the picture, and how trading goods affects where - and how much - pollution takes place. They will consider what taxing pollution means for other parts of the economy, and they will think about how green technologies are developed.

ØASØK4100 Microeconomics

None

Knowledge

Students will gain insight into:

• The fundamental ideas of the environment as provider of economic goods and services, and of pollution as being the unintended byproduct of economic actions.
• About a range of important environmental problems caused by economic activity, and their economic characteristics.
• Different economic types of regulation addressing pollution.
• The importance of context in economic analysis of the environment.
• Different methods to investigate the impact of pollution and regulations.

Skills

The students will learn:

• How to use economic analysis and modeling to assess pollution.
• How to use economic analysis to assess environmental regulation.
• How to understand empirical evidence regarding environmental problems and potential solutions.
• How to critically assess economic analyses directed at environmental problems.

• Basics: Externalities, public goods, Pareto efficiency, market failure, optimal pollution.
• Static pollution (local air pollution)
• Environmental regulation with economic instruments (taxes, subsidies, cap-and-trade)
• Dynamic pollution (climate change)
• International environmental agreements
• Trade in goods and pollution
• Green innovation
• Green taxes and the double dividend
• Behavioral environmental economics

Lectures with active student participation.

None.

There is one final 4-hour exam at the end of the semester.

One dictionary (Native language-English/English-native language or English-English)

Calculator (as specified in regulations for use of calculator)

Grading scale A - F.

An external examiner will together with the internal examiner grade the exam.

Svenn Jensen