88268 - Environmental and Resouce Economics

Learning outcomes

The purpose of the course is to introduce students with a background in Science to the methods and policy tools used in environmental and resource economics in order to achieve efficient management of pollution and environmental resources. More specifically, the course will introduce the concept of environmental externalities as the main source of environmental degradation, and the policy instruments used to correct these externalities. The course will also include an introduction to climate change economics and climate policy. Student having successfully completed the course are expected have a good understanding of issues and economic policies related to controlling environmental pollution and climate change.

Course contents

The first module will focus on the relationship between economics and climate change as it emerges from a number of authors and their books, from different perspectives.

How do economists – mostly those who study environmental and resource economics – but also scholars and writers deal with climate change?

In this module – 15 lecture hours, 7 and a half classes – I will discuss 7 (and more) authors and their books, some of which might be considered the most relevant on the issue of climate change, the environment and natural resources.

Perspectives and their authors:

The "progenitors":

• Donella H. Meadows and the Club of Rome

The economics of the anthropocene

• John R. McNeill and Peter Engelke

The "biological view"

• Elizabeth Kolbert
• Henry Gee
• David Wallace-Wells

The critical view

• Naomi Klein
• Raj Patel and Jason W. Moore
• Andreas Malm
• Nathaniel Rich

Different points of view

• Amitav Ghosh
• Dipesh Chakrabarty

Environmental vs ecological economics

• Stephen Smith
• Hermann Daly, Robert Costanza and others

The reckoning

• Michael E. Mann
• Tim Jackson
• Jason Hickel

The second module will begin with the introduction of environmental externalities and public goods as sources of failure of competitive markets to attain Pareto efficient market solutions. This type of market failure induces environmental regulation, which will be covered next. In this part, environmental policy instruments in theory and practice will be presented. More specifically, it will include: Command and control regulation (limits and standards); Market based instruments (emission taxes, subsidies, tradable emission permits, input taxes); and Voluntary agreements. This part will also cover bargaining solutions as a means of correcting environmental externalities (Coasian bargaining). We will next turn to a dynamic perspective emphasizing sustainable development and the conservation of different forms of capital stocks as the basis for sustainability. We will distinguish between weak and strong sustainability, and discuss how they can be measured, and we will distinguish natural, social, physical and human capital. We will next present the problems related to governing renewable and non-renewable resources, including a discussion of the Hotelling rule, the Environmental Kuznets Curve, green growth and environmental limits to economic growth.

Readings/Bibliography

First module (only). Books are for references (students are not required to buy them)

1. The progenitor

• Donella H. Meadows, Dennis L. Meadows, Jorgen Randers and William H. Behrens, The Limits to Growth, Universe Books, 1972

2. John R. McNeill and Peter Engelke, The Great Acceleration. An Environmental History of the Anthropocene, The Belknap Press of Harvard University Press, 2014

3. The biological view

• Henry Gee, A (Very) Short History of Life on Earth, Picador, 2021
• Elizabeth Kolbert, The Sixth Extinction, An Unnatural History, Bloomsbury, 2014
• Elizabeth Kolbert, Under a White Sky: The Nature of the Future, Random House, 2022
• David Wallace-Wells, The Uninhabitable Earth: Life After Warming, Random House, 2019 

4. The critical view

• Naomi Klein, This Changes Everything: Capitalism vs. The Climate, Simon and Schuster, 2015
• Raj Patel and Jason W. Moore, A History of the World in Seven Cheap Things. A Guide to Capitalism, Nature, and The Future of the Planet, Verso, 2020
• Andreas Malm, The Progress of This Storm. Nature and Society in a Changing World, Verso, 2020
• Nathaniel Rich, Losing Earth: A Recent History, Picador, 2020

5. A different perspective

• Amitav Ghosh, The Great Derangement, Climate Change and The Unthinkable, University of Chicago Press, 2016
• Dipesh Chakrabarty, The Climate of History in a Planetary Age, University of Chicago Press, 2021

6. Environmental vs ecological economics

• Stephen Smith, Environmental Economics: A Very Short Introduction, Oxford University Press, 2011
• Robert Costanza et al., Sustainable Wellbeing Futures: A Research and Action Agenda for Ecological Economics, Edward Elgar, 2020

7. Economics reckons with climate change

• Michael E. Mann, The New Climate War, Scribe Publications, 2021
• Tim Jackson, Post Growth: Life After Capitalism, Polity Press, 2021
• Jason Hickel, Less Is More: How Degrowth Will Save the World, Cornerstone, 2020

Teaching methods

Slides and discussions in class

Assessment methods

A discussion essay on one of the books. 

Teaching tools

Computer and online discussions

Office hours

See the website of Pier Giorgio Ardeni

See the website of Paolo Vanin