Environmental Economics A

Environmental Economics A

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Semester & Location:

Spring 2024 - DIS Copenhagen

Type & Credits:

Elective Course - 3 credits

Major Disciplines:

Economics, Environmental Studies, Public Policy


One economics course at university level.

Faculty Member:

David Possen - dpo@dis.dk or contact via Canvas inbox 

Time & Place:

Mondays & Thursdays 16.25 - 17.45

Classroom: V23-201




Course Description

Environmental Economics at DIS provides students with a broad introduction to the economic theories and tools of policy analysis relevant to modern environmental concerns.

The course is composed of five immersive modules, each organized around a key contemporary environmental challenge: (1) the plight of the Great Barrier Reef; (2) efforts in the US and Europe to combat acid rain; (3) the difficulty of measuring the efficacy of green taxes; (4) threats to the world's coasts posed by rising sea levels; and (5) the challenge of coordinating international action to combat climate change.

The sequence of modules takes us gradually from the local level, where environmental harms are analyzed as simple externalities, to the state level, where various environmental policies are evaluated in terms of their effects on marginal damage and abatement costs within and across national industries, and finally to the arena of international climate policy negotiations, where additional behavioral considerations, such as the Prisoner's Dilemma, come into play. 


Learning Objectives

The objectives of the course are (1) to give you a broad understanding of the causes and alternative solutions to modern environmental problems from an economic perspective, and (2) to apply insights derived from economic theory in designing and evaluating policy solutions to a variety of environmental issues.

You will learn to understand the role of economics in environmental issues and in the formation of environmental policy. You will learn that economic objectives do not necessarily conflict with environmental goals, and that while environmental crises commonly arise as a result of market failures, markets can at times be used to improve environmental quality.

By the end of this course, you will be able to express an informed view on the role, contribution, and limitations of economic tools in providing policy guidance on environmental issues.



David Possen, M.A. (Social Sciences), Ph.D. (Social Thought and Philosophy, University of Chicago, 2009). Postdoctoral fellow, Yale University, 2009-2011. Since 2013 external lecturer at the University of Copenhagen. With DIS since 2014.


Course Requirements

This course presupposes at least one introductory economics course, preferably microeconomics. This means that you are expected to be comfortable handling basic supply and demand analysis both graphically and algebraically (i.e. with simple equations). If you are unsure that you can fulfill this expectation, please inform the instructor as soon as possible.


Course Materials

Required reading assignments from course books will be made available online, along with (optional) supplementary articles. The course outline will be posted on DIS Canvas, listing the required readings for each lecture. Check the course outline frequently for updates.

The assigned readings for each lecture should be read prior to the lecture. Students will often be randomly asked to answer questions about the assigned readings. Here is a suggestion: as you prepare for class, write down 2 or 3 things that strike you about the day’s reading, such as some key findings, interesting arguments, etc. This will help you be prepared to answer questions in such instances. You are also encouraged to participate actively in class by asking questions, making comments, sharing ideas, etc.



In addition to the readings and through active participation in class discussions, a variety of written and oral assignments, both for individuals and for our 8-person "seminar groups," will be used to develop students' facility with the tools of environmental economics and policy analysis both inside and outside of class. Preparation for and participation in these assignments will contribute greatly to your overall grade.

There will be one closed book, in-class, written midterm at the end of Module 2, a bit before the halfway point of the semester.

The grading allocation will be as follows:

Participation: 25% in all, divided as follows:

Individual class participation: 15%

Seminar group performance in class-wide debates and simulations: 5%

Seminar group performance in in-class exercises: 5%

"Key takeaways" class session review assignment: 10%

In-class midterm exam: 20%

Green Tax homework assignment: 20%

Final policy paper: Proposed Second NDC: 25%


Note: your Green Tax homework assignment will be used to generate a student-sourced encyclopedia of environmental tax initiatives in Europe for me and future students to work with here at DIS.  It is up to you whether you would like to be credited by name for your contribution (by default, I will credit you by name, but I will give you the opportunity to choose anonymity, or to be credited under a pseudonym).


Academic Regulations  

Please make sure to read the Academic Regulations on the DIS website. There you will find regulations on: 

DIS - Study Abroad in Scandinavia - www.DISabroad.org

Special note about laptop use in class: Use of laptop computers in class is allowed for the purpose of note-taking ONLY; other computer activities can prove distracting.  Students may lose their laptop privileges if they use their computers for other activities besides taking notes.  Students should also refrain from any activity/behavior that may be disturbing to other students who are making the effort to be attentive.



Textbooks (all excerpts posted on Canvas, no textbooks to be picked up from the DIS Library during arrivals week)

Tietenberg and Lewis: Tom Tietenberg and Lynne Lewis (2018), Environmental and Natural Resource Economics, 11th edition, Routledge, 2018.

Field: Barry C. Field and Martha K. Field (2006), Environmental Economics: An Introduction, 4th Edition, McGraw-Hill Irwin, 2006.

Harris: Jonathan M. Harris (2005), Environmental and Natural Resource Economics: A Contemporary Approach, Second Edition, Houghton Mifflin, 2005.


Coase, R. H. (1960), “The Problem of Social Cost,” The Journal of Law & Economics 3: 1-44.

Croci, E. (2005), The economics of environmental voluntary agreements, Handbook of Environmental Voluntary Agreements, 3-30 pp, Springer.

The Economist (2007), “Playing Games with the Planet,” 3 pp.

Environmental Protection Agency, Ireland (2012): Hydraulic Fracturing or ‘Fracking’: A Short Summary of Current Knowledge and Potential Environmental Impacts

Fullerton, D.  and Stavins R. (1998), “How Economists See the Environment,” Nature 395: 433-434.

Helbling, T. (2012), Externalities: Prices Do Not Capture All Costs. International Monetary Fund, 3 pp.

IPCC Climate Change report (2014), Mitigation of Climate Change - Summary for Policy Makers.

Jackson, M.O. (2011), A Brief Introduction to the Basics of Game Theory, Stanford University.

Ledgard, J. (2005), “Bjorn Lomborg is the World’s Most Optimistic Statistician,” Strategy+Business 38, 7 pp.

Lynas, Mark (2003).“Natural Bjorn Killer,” The Ecologist 33:2, pp. 26-29.

McKibben, Bill (2012), “Global Warming’s Terrifying New Math,” 9 pp.

McKinsey and Company (2008), Greenhouse gas abatement opportunities in Sweden, report

Singer, Peter, and Lomborg, Bjørn (2011), “Does Helping the Planet Hurt the Poor?” point-counterpoint in Wall Street Journal, 8 pp. total.

Sunstein, Cass R, and Weisbach, David A. (2008), “Climate Change and Discounting the Future: A Guide for the Perplexed,” working paper (Harvard Law School), sections I and II, pp. 1-12.

Surowiecki, James (2014), “Climate Trades,” The New Yorker (October 13), 1 page.


Course Summary:

Date Details Due