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The course is organised in 22 frontal lessons of both theoretical and practical content.

At the end of the course, the students will have an in-depth knowledge of the theoretical concepts for analysing, from the point of view of Economics, the major issues concerning the environment, the natural resources and the “sustainable development”, the issues implied by climate change included.

At the end of the course, the students will be able to apply the major policy approaches to environmental problems as well as will be able to adopt applied methodologies concerning the economic and monetary evaluation of environmental goods and the assessment of the sustainability of economic processes.

At the end of the course, the students will be able to elaborate on the complex relation occurring between economic growth and environmental degradation as well as to provide autonomous judgments and research ideas about the complexity occurring between economic growth and sustainability from an environmental point of view. Finally, students will be able to investigate the processes of international integration involved by the environmental issues and challenges.

Part I: Principles of Environmental Economics
• Introduction to welfare economics
• The problem of social cost
- Public goods and negative externalities
- The problem of social cost
- The Coasian solution and its issues
• The economic value of environmental goods and its components
- Preferences and Willingness to Pay (WtP)
- Methods for measuring the economic value of environmental goods
- A case-study: the Exxon Valdez oil spill
• Environmental policies
- The optimal pollution level
- Pigouvian taxes, incentives and rights in environmental policy
- The Polluter Pays Principle
• The problem of optimal provision
- Public goods and positive externalities
- First-best solution: Samuelson
- Public goods provision with or without government
- A case-study: the Exxon Valdez oil spill
Part II: Sustainability: concepts and instruments
• Introduction
• Natural resources management and intertemporal or intergenerational choices
- The case of non-renewable resources and the problem of the discount rate
- The case of renewable resources
- The tragedy of the commons
• Economic development and the environment
- The relation between environmental degradation and economic development
- The Environmental Kuznets Curve (EKC)
- Less-developed and developing countries and the environment
• Sustainable economic development
- Strong and weak sustainability
- Growth and sustainability
- Sustainable development: definition and concepts
• The economics and politics of climate change
- The social cost of carbon
- The discount rate issue
- Carbon pricing: carbon tax vs ETS
- Climate as a global public good and the international agreements on climate change.

The exam is written and is divided in two parts.

The first part of the exam consists of three open-ended questions on the several parts of the program. The response to the questions is expected to demonstrate the student’s understanding of the key concepts but also their capacity of elaborating autonomous evaluations and judgments.
The second part consists of a closed-ended test (5-10 questions). Each question aims at assessing the student’s degree of knowledge on very specific parts of the course.

In the first part of the exam, each of the three open-ended question will receive an evaluation ranging between 0 and 6. In the second part of the exam, any question of the test admits four possible answers. One of them is the correct answer and will receive an evaluation of 2 points. The remaining three answers are wrong and will receive an evaluation of 0 points.

For the exam to be passed, the final grade must achieve at least 18/30. The final grade ranges between the minimum of 18/30 and the maximum of 30/30. The first part of the exam will be attributed a maximum of 18 points. The second part will be attributed a maximum of 12 points. For exams of very high quality the “cum laude” will be added to the 30/30 evaluation.

Recommended material:
Course slides. Available on-line at: https://lms.econ.univpm.it/course/view.php?id=220

Suggested textbooks:
Pearce, D., Turner, R.K. 1990: Economics of natural resources and the environment. Johns Hopkins University Press.
Goodstein, E.S. 2010: Economics and the environment. John Wiley & Sons.

Further readings (respective pdf files can be found in the course website indicated above):
PART I:
Carson et al., 2003: Contingent Valuation and lost passive use: damage from the Exxon Valdez oil spill, Environmental and Resource Economics, 25, 257-286.
Chay, K.Y., Greenstone, M. 2005: Does Air Quality Matter? Evidence from the Housing Market. Journal of Political Economy, 113(2), 376-424.
Coase, R. 1960: The problem of social cost, The Journal of Law & Economics, III, 1-44
Fleming, C.M., Cook, A., 2008: The recreational value of Lake McKenzie, Fraser Island: An application of the travel cost method, Tourism Management, 29, 1197–1205.
King, C.L., Phaneuf, D.J., Zhao, J., 2012: From Exxon to BP: Has Some Number Become Better than No Number? Journal of Economic Perspectives, 26(4), 3-276.
Le Goffe, P., 2000: Hedonic Pricing of Agriculture and Forestry Externalities, Environmental and Resource Economics, 15, 397–401.
Samuelson, P.A., 1954: The Pure Theory of Public Expenditure. The Review of Economics and Statistics, 36(4), 387-389.
Weitzman, M.L., 1974: Prices vs. Quantities. The Review of Economic Studies, 41 (4), 477-491.

PART II:
Grossman, G.M., Krueger, A.B. 1995: Economic growth and the environment. Quarterly Journal of Economics, 110, 353-377.
Hardin, G. 1968: The Tragedy of the Commons, Science, Vol. 162, 1243-1248
Lamperti, F., Bosetti, V., Roventini, A. Tavoni, M. 2019: The public costs of climate-induced financial instability. Nature Climate Change, Vol. 8, 829-833.
Meadows, D.H., Meadows, G., Randers, J., Behrens III, W.W. 1972: The Limits to Growth. New York: Universe Books.
Nordhaus, W.D. 1991: To Slow or Not to Slow: The Economics of The Greenhouse Effect. The Economic Journal, Vol. 101(407), 920-937.
Nordhaus, W.D. 2007: A Review of the Stern Review on the Economics of Climate Change. Journal of Economic Literature, Vol. XLV, 686–702.
OECD. 2008: Sustainable Development. Linking economy, society, environment. OECD: Parigi.
Ostrom, E. 2002: Common-pool resources and institutions: toward a revised theory. In: Gardner, B., Rausser, G. (eds.), Handbook of Agricultural Economics. Volume 2. Amsterdam: Elsevier Science, Chapter 24 (pp. 1315-1339).
Pacala, S., Socolow, R. 2007: Stabilization Wedges: Solving the Climate Problem for the Next 50 Years with Current Technologies. Science, Vol. 305, 968-972.
Stavins, R.N. 2011: The Problem of the Commons: Still Unsettled after 100 Years. American Economic Review, 101, 81-108.

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