Profile course »Environmental Economics«

Course with weekly lectures (90 min.) and exercises (45 min.) within the framework of the BA Profile »Sustainability«

The profile course »Environmental Economics« consists of three main parts. The first part deals with the most important economic reasons for market failure in the environmental sector and explains why these different types of market failure lead to an overuse of our natural resources and to a dramatic decline of environmental quality. Based on this analysis suitable instruments of environmental policy are developed with the overall goal of preserving our natural environment within the framework of a market economy.

The second part of the course deals with environmental cost-benefit analysis, especially with the assessment of the benefits accruing from public projects aiming at an improvement of environmental policy. First, the welfare theoretical foundations of cost-benefit analysis are discussed and then practical methods of project appraisal are explained.

The third part of the course is focussed on intertemporal problems of environmental economics. As a starting point different theoretical concepts of sustainability are discussed. Then the principles of intertemporal welfare maximization with non-renewable resources are scrutinized using simple neoclassical resource models like the cake-eating model. Finally, the possibilities and strategies to realize a sustainable development with renewable resources are discussed.

An exercise course accompanying the lectures offers students the opportunity to get a deeper understanding of the topics dealt with in the lecture course by solving numerical exercises and discussing case studies.

In addition to this course a seminar on environmental economics is held within the BA Profile »Sustainability« each term where current problems of environmental policy are discussed.