AØKA08235U Economics of the Environment and Climate Change
MSc programme in Economics – elective course
Bacheloruddannelsen i økonomi – Prioriteret valgfag på 3. år (angivet med et p)
The Danish BSc programme in Economics - prioritized elective at the 3rd year (symbolized by ‘p’)
Grundet pensum overlab er det ikke tilladt at deltage på dette fag, hvis følgende fag er bestået: "Economics of the Environment, Natural Resources and Climate Change" (AØKK08382U og AØKA08227U), "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.
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.
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.
2 hours lectures 1 to 2 times a week from week 36 to 50 (except week 42).
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 "Se skema" (See schedule) 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-F20; [Name of course]””
-Select Report Type: “List – Weekdays”
-Select Period: “Forår/Spring – Weeks 5-30”
Press: “ View Timetable”
The lecturer gives oral feedback on questions raised by students during the lectures and during the lecturer’s designated office hours.
For foreign students not enrolled: Admission requirements, registration etc: Study Economics.
For gæste- og enkelfagsstuderende: Tilmelding via Uddannelse i Økonomi.
- 7,5 ECTS
- Type of assessment
- Written assignment, 3 hoursThe exam assignment is in English and must be answered in English.
The Board of Study has decided to change the exam to an online take-home exam, due to the Corona-crisis. The exam is still individual and you may not communicate with others about the exam assignment or solutions in any circumstances.
- Exam registration requirements
There are no requirements during the course that the student has to fulfill to be able to sit the exam.
- Marking scale
- 7-point grading scale
- Censorship form
- No external censorship
for the written exam. The exam may be chosen for external censorship by random check.
- Exam period
The exam takes place:
4 June 2020
The exact time will be available in the Digital Exam from the middle of the semester.
In special cases, the exam date can be changed to another day and time within the exam period.
The written reexam takes place:
20 August 2020
The re-sit is changed to an online take-home exam.
NOTE: If only few students register for the written re-exam, the re-exam might change to an online oral examination with aids, but without preparation time. If changed to an oral re-exam, the exam date, time and place might change as well. The Examination's Office then inform the students by KU e-mail.
Info is available in Digital Exam early August.
Criteria for exam assesment
Students are assessed on the extent to which they master the learning outcome for the course.
To receive the top grade, 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.