https://studiegids.vu.nl/en/courses/2024-2025/AM_1232After completing this module, the student is able to:Describe the fundamental nature of environmental problems from an economic perspective, in relation to notions like externalities, public goods and free riding.Derive optimal levels of pollution and resource use from a societal perspective.Describe what these economic fundamentals and optima imply for the feasibility of various solutions to existing environmental problems.Understand climate change as a global externality and its direct and indirect effects on the environment, societies and economy.List economic policy instruments that are available, and discuss their (dis)advantages with respect to predefined policy aims.Argue how international trade and the environment are interlinked, and discuss the role of trade in stimulating or hampering sustainable development.Describe what are critical and debatable assumptions of core policy insights within environmental economics (e.g. those related to economic costs-benefit analysis of climate policy, and those related to economic methods used).To understand the fundamental nature of water as a natural resource and water-related problems from an economic perspective, and to become familiar with the instruments and institutions of water resource management, like water pricing and water markets, as well as their efficiency and effectiveness.This course introduces students to the economic analysis of environmental problems, and aims to give an overview of the environmental policy instruments in different policy contexts, from the local up to the global perspective. A critical cause of environmental problems is that not all the costs (including environmental costs) caused by economic actors are borne by those responsible for generating them. Likewise, benefits from producing some goods and services do not always end up with those who bear the costs. This problem will be conceptualised in this course through the notion of externalities. There are various instruments and institutional arrangements for addressing externalities. Criteria for their selection and evaluation will be studied. Applications of environmental policies at various administrative levels (i.e. local, national, international), different economic sectors and regional contexts will be discussed. This course tackles some of the most pressing environmental problems that our planet faces today, such as the depletion of biodiversity, climate change, and environmental effects of trade and globalization. This course is suited for students with a broad range of disciplinary backgrounds. It provides some of the fundamental building blocks for the MSc track Global Environmental Change and Policy (GEC&P). It offers insight to the economic theory of market failure (i.e. negative externalities) and discusses appropriate policy responses both from the microeconomic principles and examples from practice (many of which are provided by guest lecturers). After this course, students will be able to structure public debates on environmental policy interventions and will be able to assess the economic implications (e.g. trade-offs) of implementing different policy instruments. We encourage students with a good background in economics to follow the course ‘Economics of Environmental Policy Instrument Design’ provided by the School of Business and Economics.6 EC = 160 hours in total. Lectures and literature study (96 hours) and preparing and making assignments (64 hours).Closed-book exam (50%) Written assignments (50%)Harris, J.M. & Roach B. (2018). Environmental and Natural Resource Economics: A Contemporary Approach – Fourth Edition. Routledge: Taylor & Francis Group, London.First year students of MSc Earth Sciences, specialization Global Environmental Change and PolicyAdmitted to MSc Earth Sciences, specialization Global Environmental Change and Policy