This module examines the impact of economic activity on the quality of the natural environment. There is a strong connection between the economy and the environment as production and consumption activities cannot take place without the extraction of resources from the natural world. This module addresses the reasons behind why environmental problems exist and why unregulated markets sometimes fail to protect environmental quality. It also explores potential economic solutions to these problems, which include regulations, taxes, subsidies, and pollution permit trading schemes. This module seeks to provide the student with a balanced and objective analysis of the key environmental issues including climate change, deforestation and overdependence on fossil fuels. It will also equip students with the necessary knowledge to take part in any discussion about environmental policy from an economic perspective.

The nature, scope and key concepts of environmental economics is followed by a discussion on the connection between markets, efficiency and sustainability including the concepts of willingness to pay and demand as well as cost and supply. The next topic examines the optimal level of pollution which is then followed by an analysis of public policy instruments in the face of market failure. A practical application here is that of EU carbon emissions trading as well as carbon taxes levies by some countries. This is followed by an investigation of the main theoretical and practical issues relating to exhaustible resources (e.g. energy). Issues relating to the extraction of coal, oil and gas are assessed with a special focus on peak oil. In addition, theories on the harvesting of renewable resources with specific application to forestry are developed. The latter part of the module focuses on regional and global air pollutants especially with regard to the effectiveness of the international policy response to the problem of climate change.

On successful completion of this module, students will be able to: i) Explain the most important environment issues that face the global economy today; ii) Demonstrate how economic theory can facilitate an understanding of the relationship between the economy and the environment; iii) Demonstrate the effectiveness of various types of environmental policy; iv) Apply microeconomic analysis to natural resource and environmental problems; v) Relate environmental analysis to real world issues and circumstances through the use of practical problems and policies.

On successful completion of this module, students will be able to: i) Participate in debates regarding key environmental challenges facing the world economy ii) Appreciate the complexity of global environmental problems and why they are so difficult to remedy.

On successful completion of this module, students will be able to: N/A

The module is delivered through a series of lectures and tutorials, which have a significant focus on assessing the effectiveness of the current international approach to environmental policy. Each week, the students must complete a series of review questions that center around the application of economic theories to environmental problems. The questions are designed to engage students and evoke their curiosity on the extent, implications and policy options for key environmental issues. They gain significant knowledge around the importance of the environment in sustaining long-term economic growth and an appreciation of which environmental policies work best in both local and global contexts. In class discussion around the trade-off between the environment and economic growth develops the students sense of ethical responsibility especially around the maintenance of a high quality environment for future generations. In addition, through written exercises and class discussions students will have the ability to communicate to academic and non academic audiences on the importance of addressing climate issues. Because of the fast changing nature of environmental policy the module integrates the latest research reports such as those from the United Nations Framework on Climate Changes as well as the latest refereed journal articles around the latest climate change agreements.