Module Identifier RS25210  
Academic Year 2007/2008  
Co-ordinator Dr Michael Christie  
Semester Semester 1  
Course delivery Lecture   2 x 1 hour lectures per week  
Assessment TypeAssessment Length/DetailsProportion
Semester Exam2 Hours Written examination Outcomes assessed: 1, 2, 3, 4, 5  100%
Supplementary Exam2 Hours Written examination Outcomes assessed: All  100%

Learning outcomes

On completion of this module, students will be able to :

1. Discuss the causes of market failure relating to environmental issues;
2. Discuss and evaluate economic models relating to optimal environmental standards;
3. Evaluate the effectiveness of a range of policy instruments for the environment;
4. Discuss and evaluate methodologies for environmental valuation;
5. Critically evaluate the application of economic principles to contemporary environmental policy issues.

Brief description

This module examines the economic principles underlying the analysis of environmental problems and applies these principles to contemporary policy issues. Topics covered in this module include discussion of economic principles and market failure; optimal environmental standards; Coase theorem, polluter pays principle, command and control policies, Pigovian (pollution) taxes, pollution subsidies, pollution permits; and environmental valuation methodologies. These principles are then applied to contemporary environmental policy issues.


This module examines the economic principles underlying the analysis of environmental problems and encourages students to apply these principles to contemporary policy issues.

The module aims are:
a. To understand economic principles relating to market failure;
b. To discuss the characteristics of environmental goods;
c. To critically evaluate the application of economic principles to contemporary environmental policy issues.

Transferable skills

.3 Use and analysis of numerical information
Students will complete a series of class exercises that will aim to demonstrate and enhance their understanding of economic principles.

.4 Writing in an academic context
Students will be required to undertake a written examination.

Reading Lists

** General Text
Brent, R J (1996) Applied cost-benefit analysis Edward Elgar 1858982855
Field, B C (1994) Environmental economics: an introduction McGraw-Hill 0070207976
Harrington, W; Morgenstern, R D and Sterner, T (2004) Choosing environmental policy: comparing instruments and outcomes in the United States and Europe. Resources for the future
Hensher, Rose and Green (2005) Applied choice analysis: a primer Cambridge University Press
Herriges, J A and Klim, C L (1999) Valuing recreation and the environment: revealed preference methods in theory and practice Edward Elgar 185898646X
Kahn, H; Brown, W and Martel, L (1976) The next 200 years: scenario for America and the World Associated Business Programmes, 1977. 0852270712
Kalof, L and Satterfield, T (2005) The Earthscan reader in environmental values Earthscan Publications
Kula, (1994) Economics of natural resources, the environment and policies
Louviere, Hensher and Swait (2000) Stated choice methods: analysis and applications Cambridge University Press
Malthus, T (1798) An essay on the principle of population
Markandya A (Ed) (1992) The Earthscan Reader in envirmental economics London: Earthscan
Markyanda, A and Richardson, J (editors) (1992) Earthscan reader in environmental economics Earthscan Publications
McLaren, D; Bullock, S and Yousuf, N (1998) Tomorrow's world
Meadows, D H and Randers, J (1992) Beyond the limits: confronting global collapse; envisioning a sustainable future
Meadows, D H et al (1972) The limits to growth
Mitchell and Carson (1989) Using surveys to value public goods: the CV method
Pareto, P (1909) Manuel d'economie politique
Pearce D, Markandya A and Barbier E B (1989) Blueprint for a Green Economy Earthscan Publications
Pearce, DW and Turner, RK (1990) Economics of Natural Resouces and the Environment Harvester Wheatsheaf
Perman and McGilvray (1999) Natural resource and environmental economics Chapter 3.
Roberts, J (2004) Environmental policy Routledge
Smith, A (1776) The wealth of nations
World Commission on Environment and Development (1987) Our common future
** Recommended Text
Begg, D; Fisher S and Dornsbusch, R (1994) Economics McGraw-Hill
Folmer, H, Gabel, H L and Opschoor, H (1997) Principles of environmental and resource economics Edward Elgar: Cheltenham
Garrod, G and Willis, K G (1999) Economics valuation of the environment: methods and case studies Edward Elgar 1840643277
Hanley, N and Spash, C (1992) Cost benefit analysis and the environment Edward Elgar: Cheltenham
Hodge, I (1995) Environmental economics Macmillan
Meadows, D; Randers, J and Meadows, D (2005) Limits to growth: the 30 year update Earthscan Publications
** Recommended Consultation
Winter, M (1996) Rural politics: policies for agriculture, forestry and the environment Routledge

** General Text
Adamowicz, et al (1994) Journal of environmental economics and management Combining revealed and stated preference methods for valuing environmental activities 26 (3) : 271-292.
Arrow, K J R et al (1993) Federal Registration Report of NOAA Panel on Contingent Valuation 58 : 4016 - 4614.
Christie, M, Hanley, N and Hynes, S (2007) Journal of Forest Economics Valuing enhancements to forest recreation using choice experiments and contingent behaviour methods
Coase, R H (1960) Journal of Law and Economics The problem of social cost pp 1 - 44.
Daly, H (1990) Ecological economics Towards some operational principles of sustainable development Volume 2: 1-6.
Hanley, N (1989) Journal of Agricultural Economics Valuing rural recreation sites. An empirical comparison of approaches 40: 361-375.
Hardin (1968) Science The tragedy of the Commons 162 (3859) : 1243-1248.
O'Byrne et al (1985) Journal of environmental economics and management Housing values, census estimates, disequilibrium and the environmental costs of airport noise; a case study of Atlanta 12.
Wackernagel et al (2002) Proceedings of the Academic of Science Tracking the ecological overshoot of the human economy 99 (14) : 9266-9271.
Willis (1991) Scottish Journal of Political Economy The recreation value of the Forestry Commission Estate in Great Britain 38 (1) : 58 - 75.

Technical Reports
HM Treasury (2004) The Green Book: appraisal and evaluation in central government HM Treasury
** Recommended Text
European Environment Agency (2006) Using the market for cost-effective environmental policy: market-based instruments in Europe EEA Report No 1/2006EEA.


This module is at CQFW Level 5