Application of the principles and methods of economics to the
study of how scarce environmental resources are allocated by
individuals and society. Focus on the role of incentives to
manage the natural environment and on how to design economic
mechanisms to bring into balance environmental impacts with human
desires.
Athena Title
Environmental Economics
Prerequisite
AAEC 2580 or AAEC 2580E or ECON 2106 or ECON 2106E or ECON 2106H
Semester Course Offered
Offered fall
Grading System
A - F (Traditional)
Student learning Outcomes
Students will explain how economic activity depends upon and affects the natural environment, and under which conditions of "market failure" economic activity yields excessive environmental degradation.
Students will compare major environmental policy instruments—such as taxes, tradable permits, standards, and voluntary approaches—using evaluation criteria that include efficiency, cost-effectiveness, equity, incentives for long-term improvement, and political or public acceptability. Explain the advantages and disadvantages of each instrument.
Students will collect and analyze reliable economic and environmental data from real-world contexts to extract key insights and communicate them effectively.
Topical Outline
1. Introduction to Environmental Economics and Policy
2. The Economy and the Environment
3. Some Tools (Brief overview of basic micro: supply and demand and how these are used to measure costs and benefits)
4. Economic Efficiency and Market Failure: Externalities, Public Goods and the Commons
5. Modeling pollution control (Introducing marginal abatement cost and marginal damage functions to calculate costs and benefits of pollution control, and to find efficient levels of pollution)
6. Environmental policies
a. Criteria for evaluating environmental policies
b. Decentralized policies
c. Command-and-Control Strategies
d. Incentive-Based Strategies/Market-based Instruments
7. Climate change
8. Expanding the measurement of economic and social progress: Sustainability and Quality of Life
Institutional Competencies Learning Outcomes
Analytical Thinking
The ability to reason, interpret, analyze, and solve problems from a wide array of authentic contexts.
Critical Thinking
The ability to pursue and comprehensively evaluate information before accepting or establishing a conclusion, decision, or action.
