Learning outcomes of the course unit
The strong influence of economic activity on natural resources requires an analysis of the reasons behind economic behavior and the study of tools to improve the relationship between the economic facts and the environment. The objective of the course is to provide the knowledge needed to interpret the economic reality and its relationship with the environment and natural resources through: the study of the market mechanisms, the analysis off individual choice and applying economic instruments to reduce negative externalities and enhance the
positive ones. In particular, the course provides an introduction to
microeconomics, the conceptual keys to understand how environmental issues can be managed within an economic approach and, finally, the main economic instruments to assess the environmental resources and drive individual choices. The student, through the proposed study path, will apply the knowledge in the context of environmental resource evaluation and for formulating projects including environmental issues and impacts in an economic perspective. The course will offer opportunities for discussion on key environmental issues and exercises for enabling the student to assess and apply with critical thinking and autonomy in relation to the interactions between economic and environmental systems.
Course contents summary
The course of Environmental Economics aims to provide students with the knowledge necessary to evaluate environmental goods. The course is divided into two main parts. The first part will provide the basic knowledge of microeconomics, with emphasis on the fundamental concepts of scarcity and efficiency. In particular, the consumer theory
and the producer theory will be discussed in the context of constrained choices. In addition, the model of perfect competition will be discussed by analyzing the characteristics of the supply and demand functions. The second part of the course will propose the analysis of public
economics themes within the framework of environmental resources. The
concepts of public goods and externalities will be used to develop the economic instruments to control the effects of human behavior on the environment and to evaluate environmental goods. The main economic instruments covered include: environmental taxes, the negotiating mechanisms, the trading pollution entitlements, the cost-benefit analysis and the direct and indirect methods for evaluating environmental resources. The last theme will concern the environmental certification and the eco-labelling.
Introduction to Microeconomics
1. The market
1.1 Scarcity and prices
1.2 The circular economic system
1.3 The economic models
1.4 The law of supply and demand
1.5 The market equilibrium
2. Consumer Choice
2.1 The budget constraints
2.2 The preferences
2.3 The indifference curves and the consumer’s utility
2.4 The consumer choice
3. The firms and their objectives
3.1 The production function
3.2 The cost function
3.3 The maximization of the economic profit
3.4 The firm and the market: perfect competition and monopoly
1. The environment and the economic system
1.1 The environment from free resource to economic good
1.2 Neoclassical environmental economics
1.3 Economic System and Sustainable Development
1.4 The market imperfections
2. The optimal use of natural resources according to economic theory
2.1 Public goods and externalities
2.2 The regulation of environmental externalities
2.3 Evaluation of environmental goods
2.4 The measurement of environmental value
THE TOOLS OF ENVIRONMENTAL POLICY
3. The definition of environmental policies
3.1 Sustainable economic development
3.2 The tools of environmental policies
a) The optimal tax
b) The Coase theorem and the negotiating approach
c) Subsidies for non-polluting
3.3 The Cost-Benefit Analysis
- Michael L. Katz, Harvey S. Rosen, Carlo Andrea Bollino, Wyn Morgan,
Microeconomia, McGraw-Hill, 2015
- R.K. Turner, D.W. Pearce, I. Bateman, Economia Ambientale, Il Mulino, Bologna, 2003.
Acquisition of the ability to apply knowledge: exercises
Acquisition of judgment: During the course students will be encouraged
to develop a capacity for critical analysis and evaluation of the themes discussed.
Acquisition of learning skills: each topic will start from the illustration of the theoretical background and will be analyzed the on-going dynamics related to the relationship between economy and environment.
Acquisition of technical language: students will learn the meaning of the terms commonly used in the context of environmental resource evaluation.
Assessment methods and criteria
The exam is in written form and divided into two parts. The first part (1h30m) provides the student with two open questions, one of which is designed to test the knowledge acquired on one of the main topics of
microeconomics, and the second concerning the economic tools aimed at controlling the effects of human activities on environment. The open form of the two questions are useful to assess the student ability to draw
connections between the principles of microeconomic theory and the tools of environmental economics. Both questions are valued in thirtieth.
The second part of the exam (30min) is a test with 10 closed questions
about all the topics presented during the course. The aim of the second
part is to evaluate the knowledge of the key concepts of environmental
economics. Each right answer corresponds to 3 points, the wrong ones -0.5 points, while the not given answers 0 points. The maximum score of the test is 30 points. The final assessment of the exam is calculated as average of the three final scores.