Environmental Economics for ERM


Course Objective

This module gives an introduction to the economic analysis of
environmental problems, and aims to give an overview of economic
environmental policy instruments in different policy contexts from the
local through to the global level. A critical cause of environmental
problems is that not all of the costs (including environmental) caused
by economic agents are borne by those responsible for generating them.

This problem will be conceptualized in this course through the notion of
externalities. There are various instruments and institutional
arrangements for addressing such externalities. Criteria for their
selection and evaluation will be studied. Applications of environmental
policies at various administrative levels (i.e. local, national,
international), different economic sectors and different country
contexts will be discussed. This course tackles some of the most
pressing environmental problems that our planet faces today, such as the
depletion of fish stocks, climate change, environmentally-induced
poverty, and environmental effects of trade and globalization.

The overarching objective of this course is to familiarize students with
the economic analysis of environmental problems. After following this
course, students should be able to judge how well certain policy
instruments and institutional arrangements perform in terms of
effectiveness, efficiency and the distribution of welfare in society.

Course Content

After having participated in this module, students should have the
knowledge to do the following:

1. Describe the fundamental nature of environmental problems from an
economic perspective, in relation to notions like externalities, public
goods and free riding.
2. Describe what these economic fundamentals imply for the feasibility
of various solutions to existing environmental problems.
3. Derive optimal levels of pollution and resource use from a societal
4. List economic policy instruments that are available, and discuss
their (dis)advantages with respect to predefined policy aims and with
respect to specific country contexts.
5. Argue how international trade, poverty and the environment are
interlinked, and discuss the role of globalisation in stimulating or
hampering sustainable development.
6. Discuss why water is different from other goods, argue why different
uses of water warrant different tariffs, and relate this to the concept
of price elasticity of demand.
7. Describe what are critical and debatable assumptions of core policy
insights within environmental economics, such as related to economic
costs-benefit analysis of climate policy.

In this course "Environmental Economics", one distinct subject will be
addressed per week. This implies that various activities (e.g. (guest)
lectures, interactive events) will take place on a weekly basis
addressing a distinct central topic. Last year's subjects and lectures
were as follows:

- Fundamentals (Week 1)
- Policy instruments (Week 2)
- Climate change and emission trading systems (Week 3)
- Common pool resource problems (Week 4)
- International trade, poverty and the environment (Week 5)
- Water Economics (Week 6)
- Wrap up & exam preparation (Week 7)

Teaching Methods

- Hoorcollege (h);
- Serious gaming (pra);
- Tutorials/consulting hours.

Method of Assessment

Last year's grade was determined as follows:

- Closed-book exam (T: 60%);
- Assignments (O: 40%).

Students must pass all elements (5.5 or higher).

Entry Requirements

This course is suited for students with a broad range of disciplinary
backgrounds. A background in economics is no prerequisite.


Harris, J.M. & Roach B. (2018). Environmental and Natural Resource
Economics: A Contemporary Approach – Fourth Edition. Routledge: Taylor &
Francis Group, London.

Target Audience

This course is suited for students with a broad range of disciplinary
backgrounds. This course provides some of the fundamental building
blocks for the MSc Environmental and Resource Management (ERM). It
provides the basic framework for economic re-search methods, such as
cost-benefit analysis and environmental valuation, which are treated in
the ERM course Environmental Policy Tools. We encourage students who are
more interested in thorough theoretical/mathematical analysis to follow
the environmental economics course provided by the Faculty of Economics
and Business Administration.

Additional Information

This course will provide a sound balance between theoretical lectures
and guest lectures by academic and policy experts in the field of
environmental economics. Several interactive sessions stimulate active
learning of students. To stress the societal importance of environmental
economics, guest lecturers performing in this course are also from
outside academia, and may include:

- Dr. Mark Lijesen (VU University Amsterdam)
- Dr. Sander de Bruyn (CE Delft)
- Dr. Corjan Brink (PBL Netherlands Environmental Assessment Agency)
- Dr. Andries Richter (Wageningen University & Research)
- Dr. David Zetland (Leiden University)

General Information

Course Code AM_468020
Credits 6 EC
Period P2
Course Level 400
Language of Tuition English
Faculty Faculty of Science
Course Coordinator dr. M.J. Koetse
Examiner dr. M.J. Koetse
Teaching Staff dr. J.J. Dijk
dr. M.J. Koetse

Practical Information

You need to register for this course yourself

Last-minute registration is available for this course.

Teaching Methods Seminar, Study Group, Lecture
Target audiences

This course is also available as: