Economic approaches and policy measures have been central to the sustainability debate, e.g. current debates on carbon taxes or the valuation of biodiversity. In this class, students will develop a profound understanding of the major sustainability concepts in the central sustainability-related economic schools of thought and apply this knowledge by evaluating core economic policy recommendations.
After reviewing fundamental definitions and concepts of sustainability, we will start the course by looking at core models of environmental and natural resource economics. Environmental and natural resource economics is based upon the neoclassical idea of welfare optimisation, including an "optimal" level of pollution. In the class, we will go through examples of how such an optimisation is done and we will discuss its conceptual approach and main assumptions.
Ecological economics, as the second major school of thought, partly builds upon environmental and natural resource economics, but largely criticises its narrow approach, its view of nature as well as of the theory of human behavior. In the second quarter of the course, we will study this critique and fundamental concepts of ecological economics, dealing with absolute natural limits, questions of intergenerational justice and time. In the second half of the class, we will use both approaches to understand and evaluate core economic strategies for sustainability.
The third part of the class will be about economic policy instruments for the environment (EPIs) such as taxes, emission trading schemes, bans or information measures. We will evaluate the quality of different EPIs against the core goals of environmental and ecological economics. To this end, we will look at empirical studies analysing their impact and we will discuss examples of how studies of human behavior can be used to improve these policy instruments.
In the last part of the class, we will delve into ecosystem services assessment and valuation (ESAV), another heavily debated topic in sustainability economics and policy. In simple terms, many economists believe we would not over-use nature, if it were valued according to its contribution to human welfare. Based upon case-studies, we will again use concepts of environmental and ecological economics to discuss possibilities and limits of ESAV, we will study different methods used to value nature and we will develop strategies of how to use valuation in order to manage specific ecosystems. Students will make team presentations in the sessions on policy instruments and valuation. Additional grading tools are a final essay (max. 3.000 words per student), in which students further develop their presentation topics, and homework-assignments.
This is a 2nd year elective with a Security and Sustainability concentration. It can be taken in place of C8 Economics II, for students who completed GRAD-C7adv Advanced Economics during the Fall 2019 semester. If you took GRAD-C7 Economics I Intro and received a recommendation, you may also take this elective in place of C8 Economics II. Please note that in each course we have designated spots for both 1st year students and 2nd year students. As with all electives, 2nd year students with the respective area of concentration will get preference within the designated spots for 2nd year students.
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