Environmental and Resource Economics

Environmental and Resource Economics

Component code / course code:

Semester: winter

ECTS credits: 2

Lecture hours per week (SWS):

Lecturer:

Course Language: English

Prerequisites:

Very good basic knowledge of microeconomics as well as general previous mathematical and economic knowledge. 

Qualification objectives: 

After completing the course, the students should have developed a deeper understanding of the relationships between the economy and the environment, recognize possible market failure, assess corrective environmental policy interventions and competently discuss partial analytical models for the analysis of environmental and resource economic issues and be able to formulate policy recommendations. 

Course contents: 

1. Environmental economics:
   1. Environmental economic models, the definition of external effects, sustainability criteria, operating principles of environmental policy)
   2. Consideration of the external effects in a general equilibrium model (determination of the Pareto optimum and comparison to the market equilibrium, Pigou tax)
   3. Internationalization of external effects in a partial market model with the help of Pigou tax, Coase negotiation solution, and liability approaches
   4. Consideration of standard-oriented instruments of environmental policy (requirements, levies, certificates) and comparison of instruments with regard to their ecological effectiveness, as well as economically static and dynamic efficiency
   5. Description of the peculiarities of international environmental problems (e.g. greenhouse gas emissions), derivation of the non-cooperative and cooperative equilibrium 
   6. Resource economics: 
      • Introduction to resource economics (classification of natural resources)
      • Determination of the mining path of a non-renewable resource in market equilibrium and the Pareto optimum (influencing factors: discount rate, technical progress, inventory-dependent mining costs, backstop technology, expropriation risks, common pool problems, market power)
      • Determination of the harvest path of a renewable resource in market equilibrium and the Pareto optimum (sustainable harvest path, bio-economic equilibrium, common pool problem

Teaching format (e.g. online/in person lecture/Seminar/Lab etc.): In person lecture

Examination type: Written exam, 60 minutes