Master of International Affairs   Master of Public Policy  

Economics II: Sustainability

This course provides an overview of the economics of sustainability, at the intersection of economic growth, resource and environmental economics. Based on stylised facts, we begin the lectures by characterising objectives and problems economists and policymakers face worldwide in order to achieve sustainable development and green growth. We will discuss market imperfections that lead to unsustainable development as well as methods of valuation and accounting. After laying the foundation for policy analysis in a static setting, we will turn to inter-temporal optimisation. We will discuss optimal use of non-renewable and renewable resources. We also explore the determinants of growth, including factor accumulation and technological progress. This will enable us to merge the different theories and analyse how resource scarcity and environmental pollution may limit growth in the context of substitution and technical change, and to observe to what extent theory can explain the stylised facts introduced in the beginning. Finally, we will look at the interdependence between sustainability policy and present and future inequality, and analyse empirical evidence for this interdependence.