ENVIRONMENTAL ECONOMICS

The course is part of the educational activities of the degree course in Environmental Sciences. It aims to offer a holistic view of the environment in its multidimensionality and to provide the ability to apply the scientific approach to the analysis of environmental systems and issues. Specifically, the course aims to endow students with the social-economic point of view of the environmetal issue, providing, at the same time, a basic understanding of the economic jargon and of the analytical tools of economics applied to the environment. Accordingly the course introduces basic microeconomic concepts necessary to understand the role of markets as efficient resources' allocators; discussing then the interactions between economic and environmental systems it examines why and how "environmental" resources (renewable and non renewable including ecosystems goods and services) can be used unsustainably (market failures); presents the strengths and weaknesses of main public sector interventions substantiating environmental policies; it concludes with an introduction on the methods that can be applied to evaluate the cost and effectiveness of environmental policies mentioning the problems related to the evalutation of non market goods and services.

At the end of the class, the studen will acquire the following:

1. Knowledge and understanding
1.1 Understanding of the complex relation between environmental and economic systems
1.2 Basic understanding of the economic thinking and of its applicability to the environmental context.
1.3 Understanding market failures and their translation in environmental terms: the different motivation for "unsustainability" in resources use.
1.4 Knowledge of types, strengths, weaknesses and limitation of public intervention tools .
1.5 Basic knowledge on methods for the assessment of environmental policies.

2. Ability to apply knowledge and understanding:
2.1 Ability to interpret and assess autonomously the motivations of environmental impacts and their consequences, using the economic perspective.
2.2 Ability to assess pros and cons of the different typologies of public intervention in support ot the environment
2.3 Ability to apply simple assessment methodologies to evaluate cost and effectiveness of environmental policies

3. Independent thinking:
3.1 Ability to use economic thinking to interpret and reflect upon the relation between economy and environment
3.2 Ability to orientate within different approaches to assess sustainability and environmental performaces and their results.
3.4 Ability to evaluate when and which kind of policy action is more appropriate to tackle differen environmental problems in different contexts.

Basic knowledge of the mathematical concept of first derivative, function and of the solution of simple optimization problems with multiple variables is useful for an easier understanding of many topics developed during classes.

- Relationship between economic system, environmental system, sustainability and development;
- The market as interaction between demand and supply and resource allocator. Efficiency properties.
- Market failures and their implication for the environment and resources' use: public goods, externalities, open access, imperfect information;
- From statics to dynamics: exploitation of renewable and non-renewable resources, The role of discounting.
- Environmental policies: correcting for market failures (command and control, market based instruments, property rights and market for pollution rights) pros & cons. Limits to public intervention.
- Assessing environmental policies : cost benefit and cost effectiveness.The problem of non market goods and services
- Sustainable development, basic.

For the economic teaching:
Lieberman, Hall "Principi di Economia" Apogeo Editore (any release)

For the environmental economics teaching:
Turner, Pearce, Bateman, "Economia dell'ambiente", Il Mulino

For some in depth topics (solo alcuni capitoli indicati dal docente):
H. Varian "Microeconomia", Cafoscarina Editrice
Tol (2014), "Climate Economics", Edward Elgar Editore

Written exam consisting in two open questions requiring to present theorethical issues or solve simple exercises.

written

The written exam consists into two open questions, contributing each with 15 points to the final evaluation. One of the two questions is "applied" and proposes the solutions of simple exercises requiring calculations or, anyway, the application of methodologies introduced during the lectures. The second question is more theoretical and aims to test the conceptual understanding of some basic principles underpinning the taught subjects. Accordingly, the correct ansnwering of just one question, is not enough to pass the test. The distinction will be awarderd when, in addition to the correctness of the answers, the examinee shows the ability to identify potential connections across the topics object of the questions.

Frontal lectures on the teorethical part complemented by simple applied exercises and examples developed during the lectures

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