AØKA08235U Economics of the Environment and Climate Change (p)

Volume 2021/2022

MSc programme in Economics – elective course

Bacheloruddannelsen i økonomi – Prioriteret valgfag på 3. år (angivet med et p) Vedr prioriterede valgfag, se studieordningen.

The Danish BSc programme in Economics - prioritized elective at the 3rd year (symbolized by ‘p’)


Due to similar syllabus it is not allowed to register this course if the following courses has been passed: "Economics of the Environment, Natural Resources and Climate Change" (AØKK08382U and AØKA08227U) and "Miljø-, ressource- og klimaøkonomi (AØKK08094U)".



The course introduces the economic concepts and methods relevant for analyzing problems and policies relating to the environment and climate change. The course will explain the environmental economic approach to sustainable development and the role that economic instruments can play in protecting the environment and fighting global warming.


Taking the course will prepare students for further advanced studies in the Economics of the Environment, Natural Resources and Climate Change at the Master level.

Learning Outcome

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



  • 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



  • 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.



  • 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.

The main syllabus of the course consists of selected chapters from the textbook by Roger Perman, Yue Ma, Michael Common, David Maddison, and James Gilvray: Natural Resource and Environmental Economics, 4th edition, Addison Wesley, 2011 (ISBN: 978-0-321-41753-4).

In addition, a few journal articles will be included in the syllabus.


Students should have followed courses corresponding to Microeconomics I, Microeconomics II, Macroeconomics I, Macroeconomics II, Mathematics A and Mathematics B at the Bachelor programme in Economics, University of Copenhagen.
Lectures presenting the relevant theories and evidence.
An active dialogue between the teacher and students during the lectures will be strived for.

Students will be encouraged to work with exercises related to the lectures on a voluntary basis in groups or individually.

Restrictions due to pandemic crisis:
The teaching in this course may be changed to be taught either fully or partly online due to a pandemic crisis like COVID-19. In case of changes and further information, please read the study messages in KUnet or the announcements in the course room on Absalon (for enrolled students).
2 hours lectures 1 to 2 times a week from week 6 to 20.

The overall schema for the BA 3rd year and Master courses can be seen at KUnet:
MSc in Economics => "courses and teaching" => "Planning and overview" => "Your timetable"
BA i Økonomi/KA i Økonomi => "Kurser og undervisning" => "Planlægning og overblik" => "Dit skema"

Timetable and venue:
To see the time and location of lectures please press the link under "Timetable"/​"Se skema" at the right side of this page. F means Spring.

You can find the similar information in English at
-Select Department: “2200-Økonomisk Institut” (and wait for respond)
-Select Module:: “2200-F22; [Name of course]””
-Select Report Type: “List – Weekdays”
-Select Period: “Forår/Spring – Weeks 5-30”
Press: “ View Timetable”

Please be aware:
- The schedule of the lectures can be changed without the participants´ acceptance. If this happens you can see the new schedule in your personal timetable at KUnet, in the app myUCPH and through the links in the right side and the link above.
- It is the students´s own responsibility continuously throughout the study to stay informed about their study, their teaching, their schedule, their exams etc. through the curriculum of the study programme, the study pages at KUnet, student messages, the course description, the Digital Exam portal, Absalon, the personal schema at KUnet and myUCPH app etc.
  • Category
  • Hours
  • Lectures
  • 42
  • Preparation
  • 161
  • Exam
  • 3
  • Total
  • 206


The lecturer gives oral feedback on questions raised by students during the lectures and during the lecturer’s designated office hours.

7,5 ECTS
Type of assessment
Written examination, 3 hours under invigilation
as an ITX-exam in the exam venues of the university.

The exam assignment is given in English and must be answered in English.

Changes due to Coronavirus:
In the event that COVID-19 restrictions may affect the conduction of the ITX-exams, the written exam and the re-sit exam will be changed to a 3 hours take-home exam with all aids. If done so, the changes will be announced in study messages at KUnet and in the Digital Exam portal.

The take-home exam is an individual exam and it is not allowed to communicate with any one about the exam assignment nor the solution at all. It is also prohibited to distribute data and other information at all. If this or alike actions happens, it will be regarded as cheating and plagiarism.
Exam registration requirements

There are no requirements during the course that the student has to fulfill to be able to sit the exam.



No aids allowed at the written ITX-exam.


If the ITX-exam is changed to a take-home exam due to COVID-19, the written take-home exam will be with all aids.


Information about allowed aids for the re-examination, please go to the section "Re-exam".


Marking scale
7-point grading scale
Censorship form
No external censorship
at the written exam.
The written ITX-exam may be chosen for external assessment by random sample.
An oral re-examination may be with external assessment.
Exam period

The regular exam takes place:

15 June 2022


Exam information:

The exact time and place will be available in Digital Exam from the middle of the semester.

The Department can change the exam to another type, day, time and place than announced.

More information about examination, rules, aids etc. is available at Master(UK), Master(DK) and Bachelor(DK).



The written reexam takes place::

18 August 2022



If few students register, it might change to a 20 minutes oral examination without preparation time.

No aids allowed during the examination.


Due to COVID-19, the re-sit might change to 20 minutes oral ONLINE exam with all aids, without preparation time.


Exact type, day, time and place is available in Digital Exam in August.

The Department can change to another type, day, time and place than announced.

More info: Master(UK), Master(DK) and Bachelor.

Criteria for exam assesment

Students are assessed on the extent to which they master the learning outcome for the course.


In order to obtain the top grade “12”, the student must with no or only a few minor weaknesses be able to demonstrate an excellent performance displaying a high level of command of all aspects of the relevant material and can make use of the knowledge, skills and competencies listed in the learning outcomes.


In order to obtain the passing grade “02”, the student must in a satisfactory way be able to demonstrate a minimal acceptable level of  the knowledge, skills and competencies listed in the learning outcomes.