Environmental Economics for GEC&P


Course Objective

After completing this module, the student is able to:
- Understand and describe the fundamental nature of global environmental
change from an economic perspective, in relation to notions like
externalities, public goods and free riding;
- Describe what these economic fundamentals imply for the feasibility of
various solutions to existing environmental problems;
- Derive optimal levels of pollution and resource use from a societal
perspective, including the measurement of costs of externalities;
- Understand and discuss under which conditions environmental
regulations are necessary and under which conditions economic
instruments are more appropriate;
- Discuss how poverty, development, and environmental change are
interlinked, and discuss the role of globalisation in stimulating or
hampering sustainable development;
- Understand and apply economic methods for integrative analysis of
environmental change;
- List economic policy instruments that are available (such as taxes,
subsidies and emission trading), and discuss their (dis)advantages with
respect to predefined policy aims and with respect to specific contexts;
- Know and describe what are critical and debatable assumptions of core
policy insights within environmental economics, such as those related to
economic costs-benefit analysis of climate policy.

Course Content

This module introduces students to the economic analysis of global
environmental change 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 the costs (including environmental costs)
caused by economic agents are borne by those responsible for generating
them. This problem will be conceptualised 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.

This course is suited for students with a broad range of disciplinary
backgrounds. It provides some of the fundamental building blocks for the
Earth Sciences MSc track Global Environmental Change and Policy. It
offers insight to the economic theory of market failure (i.e. negative
externalities) and discusses appropriate policy responses both from the
microeconomic principles and examples from practice. After this course,
students will be able to structure public debates on environmental
policy interventions and will be able to assess the economic
implications (e.g. trade-offs) of implementing different policy
instruments. We encourage students with a BSc in Earth and Economy to
follow the course Economics of Environmental Policy Instrument Design
given by the School of Business and Economics.

Teaching Methods

6 ec = 160 hours in total. Lectures and literature study (96 hours) and
preparing and making assignments (64 hours).

Method of Assessment

Closed-book exam (60%)
Assignments (40%)

Entry Requirements

Admitted to MSc Earth Sciences, specialization Global Environmental
Change and Policy


Harris, J.M. & Roach B. (2017). Environmental and Natural Resource
Economics: A Contemporary Approach - Fourth Edition. Routledge: Taylor &
Francis Group, London.

Target Audience

First year students of MSc Earth Sciences, specialization Global
Environmental Change and Policy

General Information

Course Code AM_1232
Credits 6 EC
Period P2
Course Level 400
Language of Tuition English
Faculty Faculty of Science
Course Coordinator prof. dr. W.J.W. Botzen
Examiner prof. dr. W.J.W. Botzen
Teaching Staff prof. dr. W.J.W. Botzen

Practical Information

You need to register for this course yourself

Last-minute registration is available for this course.

Teaching Methods Lecture, Study Group, Computer lab
Target audiences

This course is also available as: