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ES30031: Economics of environmental regulation

Follow this link for further information on academic years Academic Year: 2014/5
Further information on owning departmentsOwning Department/School: Department of Economics
Further information on credits Credits: 6
Further information on unit levels Level: Honours (FHEQ level 6)
Further information on teaching periods Period: Semester 1
Further information on unit assessment Assessment Summary: EX 100%
Further information on unit assessment Assessment Detail:
  • Examination (EX 100%)
Further information on supplementary assessment Supplementary Assessment: Reassessment not allowed
Further information on requisites Requisites: Before taking this unit you must take ES20011
Further information on descriptions Description: Aims:
The objective of this unit is to provide an overview of the theory of environmental regulation. We start with the most simplest of cases and gradually relax our assumptions. For example, we introduce uncertainty with respect to costs, unobservability of source emissions and accumulation of pollution in the environment. For the latter, we introduce some dynamic optimisation techniques but focus on providing a qualitative rather than a quantitative solution to the problem of optimal control of a stock pollutant. To provide an appreciation of how the theory is implemented, we review elements of current practices in safeguarding natural resources such as air and water quality. The unit can be taken in conjunction with ES30032 Environmental and Natural Resource Economics in Semester 2 to form a stream in environmental and natural resource economics, but the units can also be taken independently of each other.

Learning Outcomes:
By the end of this unit, students should be able to
* frame an environmental problem in an analytical manner
* provide a theoretical and intuitive explanation for why externalities occur
* adopt an analytical approach to solving for optimal regulation
* explain why practical implementation of policy often deviates from textbook prescriptions
* transfer knowledge from specific problems studied to other problems sharing similar characteristics
* enter into debate, which is grounded in theory, on why certain policies intended to limit environmental damage are superior to others and under which circumstances.

Ability to:
* solve environmental problems in analytical manner;
* use economics to provide solutions to such problems, as well as argue the pros and cons of suggested solutions.

The course is primarily about how to regulate polluting activities. In addition, we also study some economics of welfare to provide context and the economics of valuation. The topics covered are:
* setting the context: welfare economics & the environment
* target setting: the efficient level of pollution
* theory of regulation and implementation
* relaxation of assumptions: certainty; observability; flow pollutants & the determination of appropriate regulation
* valuation
Key text: Perman, R., Ma, Y., Common, M., Maddison, D., McGilvray, J., Natural resource and environmental economics, Longman and New York, 2011.
Another suitable text: Goodstein, E.S., Economics and the environment, John Wiley and Sons, 2011.
Further information on programme availabilityProgramme availability:

ES30031 is Optional on the following programmes:

Department of Economics
  • UHES-AFB03 : BSc(Hons) Economics (Year 3)
  • UHES-AKB03 : BSc(Hons) Economics with Year long work placement (Year 4)
  • UHES-AFB02 : BSc(Hons) Economics and International Development (Year 3)
  • UHES-AKB02 : BSc(Hons) Economics and International Development with Year long work placement (Year 4)
  • UHES-AFB01 : BSc(Hons) Economics and Politics (Year 3)
  • UHES-AKB01 : BSc(Hons) Economics and Politics with Year long work placement (Year 4)

* This unit catalogue is applicable for the 2014/15 academic year only. Students continuing their studies into 2015/16 and beyond should not assume that this unit will be available in future years in the format displayed here for 2014/15.
* Programmes and units are subject to change at any time, in accordance with normal University procedures.
* Availability of units will be subject to constraints such as staff availability, minimum and maximum group sizes, and timetabling factors as well as a student's ability to meet any pre-requisite rules.