AØKA08235U Economics of the Environment and Climate Change

After completing the course the student is expected to be able to:

Knowledge: 

• Explain how economic activity depends upon and affects the environment
• Describe the evolution of the main ideas in the history of enviromental economics
• Account for the concepts of optimality and sustainable development used in the theory of environmental economics
• Discuss the main arguments in the debate on environmental limits to growth
• Describe the main challenges relating to global warming
• Account for the relevance of the theory of public goods and externalities for environmental and climate economics
• Describe the main alternative instruments of pollution control and climate policy and the criteria for the choice among them
• Identify the factors that should guide the choice of pollution control instrument when policy makers have imperfect information
• Account for how basic concepts from game theory can help to analyze international environmental problems such as global warming
• Reflect on the arguments and evidence in the debate on the effects of international trade on the environment
• Explain the alternative methods used to value non-marketed environmental goods and services
• Discuss the concepts of the “safe minimum standard” and the “precautionary principle” in environmental policy and how these principles arise from fundamental uncertainties and the risk of irreversible environmental damage

Skills:

• Explain and present central economic theories and models of the economy-environment nexus in a clear language.
• Apply the standard mathematical method for static optimization subject to constraints to analyze environmental policy problems such as the determination of the optimal level of pollution abatement and the optimal environmental tax rates.
• Apply the tools of graphical economic analysis to illustrate typical trade-offs in environmental and climate policy.

Competencies:

• Carry out a criticial evaluation of the stengths and weaknesses of the theories and models.
• Present and evaluate key parts of the theory of environmental regulation and discuss the role of the state and the market in the implementation of environmental policy goals.
• Apply the theoretical and empirical insights from the course in a critical analysis and discussion of important real-world problems and complex issues of environmental and climate policy.