Environmental Economics: from the Normative Foundation for Protection and Sustainability to the Role of the Firm

ENE423 Environmental Economics: from the Normative Foundation for Protection and Sustainability to the Role of the Firm

  • Topics

    Topics

    Economics is about how resources are managed and used to meet individual needs and aspirations as well as social goals. In environmental economics we deal with those social goals that are broadly termed `environmental¿, and in this course we try to equip ourselves both with method and with examples and discussion. Also, we try to cover both normative aspects ¿ how things should be done ¿ and positive aspects.

    The ethical dimension ¿ say individuals or groups that are poorly represented, endowed or otherwise marginalized (unborn, say) is an important part of this study.

    The course is concerned with the impact of the economy on the environment, the significance of the environment to the economy, and how the `regulation¿ of economic activity is balanced to achieve among environmental, economic, and other social goals.

    For most goods and services in a modern society, we rely on markets to match producer costs with consumer demands and thus to govern consumption and production. As a by-product of such production and consumption there are demands on environmental public goods, as with the damages from pollution. The problem with pollution is that markets - if left alone - do not ensure an appropriate pollution reduction effort. This illustrates the breadth of problems that need answers: What are the incentives that generate pollution? What are the means and the costs of cleaning it up? What are the societal gains from pollution control? What regulatory or other mechanisms can be designed ¿ and are observed - to ensure the right balance between costs and gains? Sometimes these issues are straightforward; other times they are exceedingly complex. Quite typically, it does not take much in terms of rigor or experience to have learned a lot in terms of what is good business, good policy, and a good understanding of a broad set of policy issues.

    Building blocks in the course

    1. Environmental issues and public goods
    2. Ethical dimensions, political economy and institutions
    3. Stakeholders, and the role of government
    4. Valuation and prioritization
    5. Policy instruments, policy analysis and policy reform
    6. More on government and policy instruments: Natural resources: fisheries and exhaustibles

  • Learning outcome

    Learning outcome

    Knowledge: Upon successful completion, the student

    • Can identify ethical dimensions in environmental protection as relating to endowments or distribution and efficiency
    • Is able to connect the challenge of managing the environment to characteristics of

    -        the physical environment,

    -        the stakeholders, such as individuals and firms, their endowments and preferences

    -        institutions

    • Can place a human-centered approach in a context of potential broader obligations
    • Is able to identify environmental issues using the basic notion of public goods

    Skills: Upon successful completion, the student

    • Understands how market failure is often associated with an environmental problem and can point out the role of government intervention as well as voluntary action and private regulation
    • Is able to analyse the strengths and weaknesses of government policy instruments, pollution taxes, regulation, tradable permits, within the framework of a benevolent planner;
    • Knows the basic methodological challenges and methods used in prioritizing environmental problems and protection
    • Understand the institutions and political economy of environmental issues, including the basic notions of property rights and liability

    General Competence: Upon successful completion, the student

    • Is able to use these concepts and techniques in an applied setting and to communicate their role;
    • Is able to analyse an environmental management issue in the light stakeholder interests, institutions, and their evolution.

  • Teaching

    Teaching

    Lectures, about 20, including guest lectures.

  • Recommended prerequisites

    Recommended prerequisites

    Prerequisites: Students are recommended to have covered a program equivalent of the Bachelor program at NHH, and in particular to master intermediate economics (microeconomics in particular), and corresponding analytical tools.

    The course is recommended prior to ENE 426 The economics of climate change and cooperation.

  • Required prerequisites

    Required prerequisites

    Students are recommended to have covered a program equivalent of the Bachelor program at NHH, and in particular to master intermediate economics (microeconomics in particular), and corresponding analytical tools.

  • Requirements for course approval

    Requirements for course approval

    The student has to have two home assignments in English submitted and approved, two pages / 600 words each. The student can decide to have one of the assignments done in a group of up to 4 students, but the other assignment should be done individually. The assignments are graded approved/rejected. Having both assignments approved is necessary prior to submitting the term paper.

  • Assessment

    Assessment

    The assessment is based on a term paper (duration approx. 14 days) of approx.. six pages/ 2500 words, delivered alone.

  • Grading Scale

    Grading Scale

    A-F

  • Computer tools

    Computer tools

     None.

  • Semester

    Semester

    Autumn

  • Literature

    Literature

    Charles Kolstad¿d book (intermediate) Environmental Economics, plus supporting articles.

Overview

ECTS Credits
7.5
Teaching language
English.
Semester
Autumn

Course responsible

Gunnar S. Eskeland, Department of Business and Management Science