Part I of this lecture is dedicated to the design of an environmental policy. These regulation tools are first introduced in the context od a competitive polluting industry. We concentrate our attention on property rights, usual command and control, Pigouvian taxes, and emission rights permits. In a second step, we discuss the effect of imperfect competition, of imperfect information and of policy spill-overs.
In part two of this course you will learn about the categories of economic value assigned to environment and work through the utility theory on which environment valuation methods are based. We will survey the non-market valuation method employed by economists to measure public goods. This includes Revealed Preference methods and Stated Preference methods based on surveys and hypothetical markets. We will explore theoretical and empirical issues.
Course outline :
Part I : The design of an environmental policies
1. The regulation of a competitive polluting industry a. A competitive partial equilibrium model b. Property rights and the Coase theorem c. The different instruments
2. Some extensions a. Market Power b. Imperfect information c. Policy spill-overs
Part II : Valuing the Environment
1. The theory of environmental valuation a. Categories of Values b. From economic values of non-market goods to valuation methods c. Willingness To Pay (WTP) or Willingness To Accept (WTA)
2. Stated Preference Methods a. Hypothetical Market b. Contingent Valuation Methods c. Choice Modelling
3. Revealed preference Methods a. Valuing consumer's benefits b. Related topics