Environmental Economics and Policy

Course Objective: 

 

The course aims to acquaint the students with tools of microeconomics in dealing with environmental problems. This course targets to apprise the environment-economy interactions and familiarize the various economic regulatory tools in handling environmental problems.

Course Outcomes:  The students will be able to

1

Understand the main interactions between the environment and the economy and the physical constraints that place limits on the interaction

2

Be familiar with the history of the discipline of environmental economics and what is included in the discipline

3

Appreciate how markets allocate goods and why they sometimes fail allocate environmental goods optimally.

 4

Plan regulatory framework for correcting market failures.

5

Use economic techniques to analyze environmental problems and to assess environmental policies

6

Have the knowledge of the components of environmental policy, criteria for its design and assessment, and critique of these matters.

7

Apply the various quantitative regulations on the basis of criteria of cost effectiveness.

Course Content:  

 UNIT I

What is environmental economics?

Distinction between environmental Economics and natural resource economics.

 10 hrs

UNIT II

Introduction to Environmental Economics: Historical perspectives (classical, neo-classical and modern) Interface between Economy, Environment and Development; Environment versus development Controversy.

10 hrs

UNIT III

First and second law of thermodynamics. Efficiency and choice, Problems of Market Failure: Public bads and externalities. Social choice of optimum pollution

10 hrs

 UNIT IV

Theory of environment Regulation: Pigovian solutions; Subsidies for Abatement of pollution, Property Rights and the Coasian Approach: bargain Solution.

 10 hrs

 UNIT V

Quantitative regulation: Command and Control- Standard setting; Tradable pollution permits; Refundable deposits, Output Tax.

 10 hrs

UNIT VI

The Problem of uncertainty and risk in Environmental policy choice; Regulation with unknown Control cost; Monitoring emissions, enforcement and Moral hazard; Environmental Risk and uncertainty.

 10 hrs

Internal Assessment: 

 CIA 1

Unit I, Unit II 

 

 CIA 2

Assignment submission and/or presentation 

 

Text Books: 

1.       Kolstad, C, D. (2003) Environmental Economics, Oxford university Press

 Reference Books: 

1.       Thomas and Callan, Environmental Economics, Cengage Learning, 2009.

2.       Tietenberg, T. (1996), Environmental and Natural Resource Economics, Harper Collins, College Publishers, New York, Fourth Edition

3.       Bhattacharya, R. N. (Edited) (2001), Environmental Economics: An Indian Perspective, Oxford University Press, New Delhi.