Aims and objectives
The module examines the theoretical structure underlying the economic problems of the environment; causes of market failure; policies for the environment and the economic techniques underlying policy decisions (cost-benefit analysis).

Content
Causes of market failure. The market as an ideal. The theory of externalities, public goods and common property resources. Uncertainty and irriversibility. Discounting and the theory of optimal resource depletion. Economic basis of the 'Polluter Pays' Principle. Sustainable development. Policies for the Environment. Property rights and the Coase Theorem: bargaining and cooperation; transactions costs; cross-compliance. Pigovian taxes (including usage v. ambient contribution). Sales of pollution rights. Environmental standards and separate facilties. Economic techniques underlying policy decisions. Valuation of non-market effects. Cost-benefit analysis. Environmental forecasting.

Learning outcomes
On completion of this module students will be able to:

• Discuss the causes of market failure relating to environmental issues
• Evaluate the merits of various environmental economic techniques
• Apply environmental economic principles to topical environmental issues
• Evaluate the effectiveness of current environmental policies.