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Module Title LM Environmental Economics
SchoolBirmingham Business School
Department Birmingham Business School
Module Code 08 19956
Module Lead Dr. Matthew Cole
Level Masters Level
Credits 20
Semester Semester 1
Restrictions An understanding of basic microeconomics is required. Compulsory for MSc Environmental and Natural Resource Economics
Description Students are introduced to the concept of the externality, the Coase theorem and the importance of property rights as a determinant of market failure. Alternative revelation methods for determining the value of public goods are presented. The optimality of the Pigouvian tax based solution is derived and contrasted to other regulatory methods of pollution control including tradable permits, environmental subsidies and command and control. The proper implementation of these measures is explored within the context of imperfect competition, imperfect mixing, imperfect monitoring ability, uncertainty and tax interaction effects. The final part of the course deals with the monitoring and enforcement of environmental regulations; and the ex-post regulation of environmental hazards using strict and negligence based liability versus ex-ante standards.
Learning Outcomes By the end of the module the student should be able to:
  • Demonstrate comprehensive understanding of the role of property rights as determinants of environmental degradation
  • Understand the economic arguments in favour of particular forms of environmental regulations and how these are modified by problems relating to market structure, uncertainty and non-observability of polluting activities
  • Demonstrate knowledge and understanding of the complex economic issues underlying monitoring and enforcement
  • Critically evaluate the relative advantages of ex-ante regulations and legal liability for dealing with environmental hazards
  • Comment critically on contemporaneous environmental issues from an economics perspective
Assessment 19956-01 : Exam : Exam (Centrally Timetabled) - Written Unseen (80%)
19956-03 : Essay : Coursework (20%)
Assessment Methods & Exceptions Assessments:
3 hour written examination (80%)
2,000 word essay (20%)

Reassessment: 3 hour exam (100%)
Other None
Reading List Kolstad, C. 2000. Environmental Economics. Oxford: Oxford University Press.
Baumol, W & Oates, W. 1988. The Theory of Environmental Policy. Cambridge: Cambridge University Press.