WELFARE STATE, REGULATIONS AND ENVIRONMENT

This course is designed to provide tools of public economics to analyze modern welfare states and the analysis of the role of government in society, the problem of externalities, and the protection of the environment. The role of the welfare state is never been more important than during a pandemic. The first part focuses on the issues of equity, efficiency, and the role of the state. We then look at problems of public choice, consider the implications of recent research in economics for welfare analysis, and discuss issues of market failure, public goods, externalities, and the role of environmental policy. The second part is devoted to environmental change and natural resource use, and in designing appropriate policy responses.

Topics to be covered include; the evaluation of regulatory and market-based instruments in controlling pollution; moral suasion and voluntary regulation; economics of natural resource use; cost-benefit analysis and environmental evaluation; pandemic economics. Case studies include the analysis of the benefits and costs of investing in different energy technologies.

Students should be familiar with basic economic concepts such as; supply and demand functions, consumers' surplus, opportunity cost, marginal analysis, and time discounting. Although an overview will be provided during the first couple of lessons, it may be helpful to review an introductory microeconomics textbook.

The market economy
Public goods: efficiency, congestion, revelation
Externalities
Market power: competition policy
Valuation of non-market goods
Welfare, taxation, and income redistribution
Inequality and poverty
Moral hazard and adverse selection
Overview and principles of environmental economics
The cost and benefits of environmental protection
Environmental policies and instruments
Economic efficiency and benefit-cost analysis
Economics of natural resources
Pandemic economics
Sustainability, the commons and globalization

Economics of the Public Sector, Norton, by Joseph E Stiglitz or Public Finance, Global Edition, by Harvey Rosen and Ted Gayer.

The second part of the course requires the following journal articles, that are available on the module’s website (will be updated). (Alternatively, students can find most of the articles below in Stavins, R. N., ed. Economics of the Environment: Selected Readings, Sixth Edition. New York, New York: W. W. Norton & Company, 2012.)

Fullerton, D. and Stavins, R., 1998. How economists see the environment. Nature, 395(6701), p.433.
Shogren, J.F. and Taylor, L.O., 2008. On behavioral-environmental economics. Review of Environmental Economics and Policy, 2(1), pp.26-44.
Palmer, K., Oates, W. E. and Portney, P. R., 1995. Tightening environmental standards: the benefit-cost or the no-cost paradigm? Journal of economic perspectives, 9(4), pp.119-132.
Diamond, P. A. and Hausman, J. A., 1994. Contingent valuation: is some number better than no number? Journal of economic perspectives, 8(4), pp.45- 64.
Goulder, L. H. and Stavins, R., 2002. An eye on the future-the economists’ practice of discounting. Nature, 419, pp.673-674.
Kelman, S., 1981. Cost-benefit analysis: an ethical critique. Regulation, 5, p.33. "Defending Cost-Benefit Analysis Replies to Steven Kelman." Regulation 5 (1981): 39.
Pindyck, R. S., 2007. Uncertainty in environmental economics. Review of environmental economics and policy, 1(1), pp.45-65.
Maugeri, L., 2009. Understanding oil price behavior through an analysis of a crisis. Review of Environmental Economics and Policy, 3(2), pp.147-166.
Reinhardt, F. L., Stavins, R.N. and Vietor, R.H., 2008. Corporate Social Responsibility Through an Economic Lens (No. w13989). National Bureau of Economic Research.
Portney, P. R., 2008. The (Not So) New Corporate Social Responsibility: An Empirical Perspective. Review of environmental economics and policy, 2(2), pp.261-275.
Nordhaus, W., 2007. Economics. Critical assumptions in the Stern Review on climate change. Science, 317(5835), p.201.
Stavins, R. N., 2011. The problem of the commons: still unsettled after 100 years. American Economic Review, 101(1), pp.81-108.
Hardin, G., 1968. The Tragedy of the Commons. Science, 162, pp. 1243-1248
Dasgupta, S. and De Cian, E. The influence of institutions, governance, and public opinion on the environment: Synthesized findings from applied econometrics studies. Energy Research & Social Science, (43), pp.77-95.

The final exam will be paper on a topic approved by me followed by an oral exam.

In-person and live lectures via Zoom.

English

written and oral

This subject deals with topics related to the macro-area "Poverty and inequalities" and contributes to the achievement of one or more goals of U. N. Agenda for Sustainable Development