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 differences between two main approaches: environmental economics and ecological economics. Then, it will look at the economics of climate change, from different perspectives, and the social and economic consequences of climate change.

This module is 15 lecture hours, 7 and a half 2-hour classes.

Program:

1. Environmental vs ecological economics
2. The limits to growth and the «biological view»
3. The economics of climate change, 1
4. The economics of climate change, 2
5. On the social and economic consequences of climate change, 1
6. On the social and economic consequences of climate change, 2
7. Climate change: the recent trends. The Anthropocene debate.

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).

Reading list (for those who wish to know more)

1. 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. Henry Gee, A (Very) Short History of Life on Earth, Picador, 2021

4. Elizabeth Kolbert, The Sixth Extinction, An Unnatural History, Bloomsbury, 2014

5. Elizabeth Kolbert, Under a White Sky: The Nature of the Future, Random House, 2022

6. David Wallace-Wells, The Uninhabitable Earth: Life After Warming, Random House, 2019 

7. Naomi Klein, This Changes Everything: Capitalism vs. The Climate, Simon and Schuster, 2015

8. 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

9. Andreas Malm, The Progress of This Storm. Nature and Society in a Changing World, Verso, 2020

10. Nathaniel Rich, Losing Earth: A Recent History, Picador, 2020

11. Amitav Ghosh, The Great Derangement, Climate Change and The Unthinkable, University of Chicago Press, 2016

12. Dipesh Chakrabarty, The Climate of History in a Planetary Age, University of Chicago Press, 2021

13. Stephen Smith, Environmental Economics: A Very Short Introduction, Oxford University Press, 2011

14. Robert Costanza et al., Sustainable Wellbeing Futures: A Research and Action Agenda for Ecological Economics, Edward Elgar, 2020

15. Michael E. Mann, The New Climate War, Scribe Publications, 2021

16. Tim Jackson, Post Growth: Life After Capitalism, Polity Press, 2021

17. Jason Hickel, Less Is More: How Degrowth Will Save the World, Cornerstone, 2020

Teaching methods

Slides and discussions in class

Assessment methods

There will be two, separate written exams, one for each module 1. The exams will be given by open questions.

Teaching tools

Computer and online discussions

Office hours

See the website of Pier Giorgio Ardeni

See the website of Paolo Vanin