Professor Michael Finus

Chair in Environmental Economics

Michael Finus works in the field of environmental economics and public goods, in particular on international environmental agreements. International and global environmental problems, like climate change, the depletion of the ozone layer, overfishing, deforestation of rain forests, and the extinction of species, are prominent examples which have received much attention in Michael’s work.

Michael is specifically interested in the resolution of economic problems that involve externalities (where the actions of individuals, firms and governments incur wider costs and/or benefits), where coordination and cooperation would generate large global welfare gains but which typically suffer from ‘free-riding’ (i.e. not everybody is contributing to cooperation and/or is not complying with agreed obligations). He analyses which factors cause free-riding, as well as how and through which measures these can be mitigated. Much of his work is focused on the problems with collective decision making, and public and global governance. Michael uses game theory in his analysis, a mathematical method which tries to predict the outcome of strategic interaction between decision-maker.  In his early work he focused on compliance with treaty obligations, in particular on hierarchical systems of sanctions which are political feasible and credible. He then became interested in looking at mechanisms that encourage membership in environmental treaties. For some of the policy problems, it was useful to combine the game theoretic analysis with empirically calibrated climate change models which capture the link between energy consumption, emissions, the economy and climate change damages across various world regions. This work was done in collaboration with CLIMNEG (University of Leuven, Belgium) and STACO (University of Wageningen, The Netherlands). Most recently, Michael has been interested in approaches that can account for psychological aspects in the economic analysis, to better explain the behaviour of individuals facing various environmental regulations. He is interested in developing new behavioural theories which will be tested through experiments.

Michael is a Lead Author on the International Panel on Climate Change (IPCC), which received the Nobel Peace Prize in 2007 together with Al Gore. The IPCC reviews the evidence on the scientific, economic and social dimensions of climate change at regular intervals. The idea is to state clearly what we know, but also what we do not know yet. The IPCC reports are important starting points for international climate policy coordination and negotiations that hopefully lead to comprehensive and effective climate agreements in the future.

Michael has published widely in internationally renowned journals including the Journal of Public Economics, Journal of Public Economic Theory, Social Choice and Welfare, Public Choice, Oxford Economic Papers, Environmental and Resource Economics and Environment and Development Economics. He has also published several books, including ‘Game Theory and International Environmental Cooperation’ (Edward Elgar, Cheltenham, UK, 2001). He is currently editing a special issue for the Journal of Environmental Economics and Management and two special issues for Environmental and Resource Economics.

Michael held previous appointments at the University of Exeter, Stirling, Singapore and Hagen (Germany). Michael is a Member of the Editorial Board of Letters in Spatial and Resource Sciences and Associate Editor of Environmental and Resource Economics. He regularly serves as a referee for 4 star journals such as American Economic Review, Journal of Political Economy, Games and Economic Behavior and Journal of Environmental Economics and Management. He was President-elect of the German Association of Environmental Economists (2008-2010) and Past President-elect 2010-2012. He is also a member of the European Association of Environmental and Resource Economists and of the Spanish- Portuguese Association of Resource and Environmental Economics. Michael is a Research Associate at the Centre for European Economic Policy Research in Mannheim (ZEW, Germany), sits on the steering committee of the University of Bath’s Institute for Sustainable Energy and the Environment and the new Institute for Policy Research at Bath. Michael was a visiting scholar at the Smith School of Enterprise and the Environment, University of Oxford, Visiting Professor at the University of Bordeaux, Institute Henri Poincaré, Paris and University Dauphine, Paris.