Environmental Economics and Management (India, New Delhi, January 3-8, 2010)

Instructor: Doc. Ing. Petr auer, CSc. Head of Department of Environmental Economics University of Economics Prague W. Churchilla 4, 130 67 Prague 3

Course code: Credits: 30 hours??? Objectives: The course provides knowledge on all the important aspects of environmental economics, environmental policy and management both on the micro a macroeconomic level. Upon successful completion of this course, students will be able to understand the principles, concepts, theories and methods in the field. Various class exercises are introduced for use in classes. Most typically, they take the form of simple economic lab experiments, where students are placed in the role of various economic subjects. A special textbook was elaborated to provide main text for the course. The book was awarded at the AGBA 5th world congress as "the best text book on environmental economics and policy. Discussion of concrete practical implementations in systems of environmental management is one of the typical subjects of student projects. It does not intent to require large portions of readings for memorization. Course contents: 1. Initial information about the content of the course; Nature and the environment; getting knowledge about nature and the environment auer 2007, Chap. 1 2. Nature, the environmental and its protection as a problem of economic analyses; natural goods and property rights an introduction and key terms. auer 2007, Chap. 2.1 - 2.2 3. Human needs and values, environmental needs and values, implications for actions of individuals in the markets and in political systems, implications of environmental policies.
Class exercise: comparison of human values of university students from approximately 8 states all over the World and values of the current group (a questionnaire distributed at the class); discussion about human value priorities and their importance for individual's behavior both in the economic system and in the political system.

auer 2007, Chap. 2.3 4. Analytical evaluation of single environmental factors and an evaluation of the total quality of the environment in a region: The difference between a state and the quality of the environment
Class exercise: finding the "points of orientation" on the half-straight-line of the changed state of the environment for the evaluation

auer 2007, Chap. 2.4 5. Multicriteria analyses of total environmental quality in a region

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Class exercise (case): multicriteria evaluation of total quality of living in a city, where ecological factors are included; a discussion about getting a consensus between different human values oriented participants, discussion of public choice problems in the field, etc.

auer 2007, Chap. 5. 6. Explaining terms: economic damage from environmental degradation, control costs (environmental protection costs), environmental burden of the economy.
Class exercise: small "brainstorming" on finding examples of both the damage and control costs.

auer 2007, Chap. 3.1, 4.1, 4.2 7. Economic damage from environmental degradation: main approaches to quantification both the damage and benefits from environmental protection projects.

Class exercise: real and hypothetical market of a selected private good; valuation without and with additional ecological (ethical) information given to the consumer; impact on the markets. Class exercise: simplified cost-benefit analyses - the benefits evaluation based on a contingent valuation. Class exercise: travel cost method

auer 2007, Chap. 3.2 3.4 8. Environmental capital investment: a concept of net and gross control costs; efficiency of environmental protection spending from both private and public point of view; possible approaches to quantification of environmental effects for setting priorities of funding from public financial sources; the role of cost-benefit and cost-effectiveness analyses and problems of discounting are also discussed in this block.
A numerical illustrations of polluter's decision-making and of a public authority decision-making.

auer 2007, Chap. 4.3 4.4 9. Models of optimal behavior of a single polluter; main types of tools of environmental policies from a single polluter point of view
Simple numerical illustration: optimal pollution on a microeconomic level.

auer 2007, Chap. 6 10. Tools of environmental policy, conditions upon which they work, their advantages and disadvantages, the role of government: long- mid- and short term administrative tools (command-and control approach) auer 2007, Chap. 7.1 7.2 11. Coases idea and other private solutions to environmental problems.
Small class lab economic experiment: Coasian theory based negotiation

auer 2007, Chap. 7.3 12. Pollution permits trading as a market-based tool of environmental policy.
Class lab experiment: pollution permits trading in a hypothetical region

auer 2007, Chap. 7.4 13. Environmental taxes, charges, financial supports, environmental policy tool mixes; voluntary approaches and other tools of environmental policy.
Class exercise based on data from the exercise in section 10; computer illustrations on a model

auer 2007, Chap. 7.5 14. Basic macroeconomic view on environmental problems: optimal environmental quality in some territory - static and dynamic model; discussion about the degree of optimism and pessimism about economic growth; introduction into sustainable development; other macroeconomic consequences of environmental and economic policy decisions

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Simple numerical illustration: an optimal environmental quality on the macroeconomic level. Class exercise: small "brainstorming" on finding possible macroeconomic impacts of the environmental policy decisions.

auer 2007, Chap. 8 Students prepare their own presentations on selected interesting topics, which are mainly based on current practical themes. The presentations are discussed at the lectures. Topics for student presentations: 1) Nature and environment in Indian philosophies and religions max 2 (different) presentations 2) First mentioning of negative impacts of human activity on India nature/environment (in very past history) max 2 (different) presentations 3) Current Indian research in nature/environmental protection (nature science perspectives; major institutions and their major/typical projects) max 2 (different) presentations 4) Past and current air pollution in India (contribution to global pollution, pollution in selected regions, cities etc.; info about emissions, concentrations, sources of pollution) max 4 (different) presentations 5) Past and current water pollution and treatment in India (selected rivers, lakes, seas) max 4 (different) presentations 6) Waste generation and treatment in India (municipal waste, industrial waste) max 4 (different) presentations 7) (Wild) nature protection in India (national parks etc.) - max 2 (different) presentations 8) Research on negative impacts (risk) of environmental pollution on health in India max 2 (different) presentations 9) Research on negative impacts of environmental pollution on forestry in India max 2 (different) presentations 10) Research on negative impacts of environmental pollution on agriculture in India max 2 (different) presentations 11) Research on negative impacts of environmental pollution on culture heritage in India max 2 (different) presentations 12) Research on quantifying economic damage from environmental degradation in India max 4 (different) presentations 13) Practical illustration (case) on decision making of a single polluter (firm, household) to invest or not to invest into environmental protection project max 4 (different) presentations 14) History and current situation in environmental legislation in India air protection max 1 presentation

4 15) History and current situation in environmental legislation in India water protection max 1 presentation 16) History and current situation in environmental legislation in India waste management max 1 presentation 17) History and current situation in environmental legislation in India noise protection max 1 presentation 18) History and current situation in environmental legislation in India nature protection max 1 presentation 19) Public spending on environmental protection in India (different) presentations max 2

20) Private spending on environmental protection in India max 2 (different) presentations 21) Indian contributions (positions) to solving the most important global environmental problems max 3 (different) presentations 22) Renewable natural/energy resources in India max 4 (different) presentations 23) Individually suggested topic / should be consulted with Prof. Sauer

Instruction for the oral part of the presentation: 3 5 minutes speech at the class can be supported with 1 - 4 slides (in power point) prepared for Friday January 8, 2010 morning (or earlier)

Instruction for the written part of the presentation: 0,5 - 2 pages sources of literature must be correctly mentioned (author/originator, title of publication/document, year of publishing, place of publishing, publisher; in the case Internet sources are used / + the link and date of download typed and printed

Grading: 0 60 points written exam(s) 0 40 points presentations Grading scale: 100 - 90 89 - 75 74 - 60 59 and less A Excellent B Very Good C Good F Failure

Literature: Textbook: (several copies will be available from Petr Sauer) Sauer Petr (2007): Introduction to Environmental Economics and Policy with Economic Lab Experiments and Class Exercises, Nakladatelstvi a vydavatelstvi litomyslskeho seminare, Praha, ISBN 978-80-86709-10-9 Recommended Readings: Readings: Hardin, G.: The Tragedy of the Commons Readings: Knetch J.L., Davis R.K.: Comparison of Methods for Recreation Evaluation Coase, R.: The Problem of Social Cost Randall A.: Coasian Externality Theory in a Policy Context Tietenberg T.: Transferable Discharge Permits and the Control of Stationary Source Air Pollution: A Survay and Synthesis Baumol W.J., Oates W.E.: The Use of Standarts and Prices for Protection of the Environment All papers shown above available from: Environmental Economics and Policy (Selected Classical Readings), Edited by: auer P., Livingston M., ETP, Nakladatelstv a vydavatelstv litomylskho semine, Prague-GreeleyBratislava 1996, ISBN 80-902168-1-1