This course analyses the economic principles underlying the design of efficient environmental policies and the optimal management of natural resources. It identifies conditions under which market failures lead to environmental degradation or to the overexploitation of natural resources, and discusses economic policies that can counteract such market failures. Such policies include imposing taxes on certain economic activities, or allocating property rights that allow these activities to be undertaken. If property rights—which may take the form of pollution permits, or individual quotas for the harvesting of natural resources—are transferable between agents, the trade of property rights between self-interested agents yields economic efficiency as a market-based outcome.
Upon successful completion, students will have the knowledge and skills to:
- Understand how various market failures may lead to environmental degradation or the overexploitation of natural resources;
- Use economic modelling to evaluate various approaches to the design of efficient environmental policies and of rules for the optimal management of natural resources;
- Construct and analyse simple dynamic models of natural resource management.
- Tutorial presentations and participation: 10%
- Midterm exam: 30% (redeemable)
- Final exam: 60%
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WorkloadTwo lectures per week plus tutorials throughout the semester.
Requisite and Incompatibility
Prescribed TextsN.O. Keohane and S.M. Olmstead, Markets and the Environment, Island Press, 2007
Preliminary ReadingWilliam D. Nordhaus, The Climate Casino: Risk, Uncertainty, and Economics for a Warming World, Yale University Press, 2013
Assumed KnowledgeYou should possess basic mathematical skills, such as being able to solve algebraic equations, graph functions, and take derivatives and partial derivatives. Additional formal techniques for constructing and analysing dynamic models will be developed as part of the course.The book by William Nordhaus listed below as an additional reference provides background and motivation for many of the issues that will be discussed during the semester, and would thus be useful preliminary reading.
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Commonwealth Support (CSP) Students
If you have been offered a Commonwealth supported place, your fees are set by the Australian Government for each course. At ANU 1 EFTSL is 48 units (normally 8 x 6-unit courses). More information about your student contribution amount for each course at Fees.
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- 6 units
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Offerings, Dates and Class Summary Links
Class summaries, if available, can be accessed by clicking on the View link for the relevant class number.
|Class number||Class start date||Last day to enrol||Census date||Class end date||Mode Of Delivery||Class Summary|
|5945||25 Jul 2022||01 Aug 2022||31 Aug 2022||28 Oct 2022||In Person||N/A|