Module Identifier RSM1510  
Academic Year 2001/2002  
Co-ordinator Dr Michael Christie  
Semester Semester 2  
Other staff Professor Peter Midmore  
Course delivery Lecture   11 x 2 hours  
Assessment Assignment   Conference paper   40%  
  Exam   2 Hours 2 questions out of 6   60%  

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).


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:

Reading Lists

** Recommended Text
Bateman, DI; Organic Farming and Society: An Economic Perspective. (1994) In The Economics of Organic farming: An International perspective (eds) Lampkin,NH & Padel,S. Wallingford: CAB International
Field, B. (1994) Environmental Economics: An Introduction.
Hanley, N and Spash, C. (1992) Cost Benefit Analysis and the Environment. Aldershot: Edward Elgar
Hodge, I. (1995) Environmental Economics. Macmillan
Markandya, A and Richardson, J (ed). (1992) Earthscan Reader in Environmental Economics. Earthscan Publications
Pearce, DW and Turner, KR. (1990) Economics of Natural Resouces and the Environment. Harvester Wheatsheaf
Pearce,D, Markandya, A and Barbier, EB. (1989) Blueprint for a Green Economy. Earthscan Publications
Winter, M. (1996) Rural Politics: Policies for Agriculture, Forestry and the Environment. Routledge