Applied Environmental Economics

Course Type	Course Code	No. Of Credits
Discipline Elective	SLSEC243	4

Course coordinator and team: Dr. Robin Singhal

How does the course link with the vision of AUD?

This course contributes to the overall vision and mission of AUD which put emphasis on the development of students into mature and skilled professionals in their respective areas of expertise.

How does the course link with the specific programme(s) where it is being offered?

One of the thrust of the MA Economics programme offered at AUD is to equip students with the analytical skills to appreciate real-world problems. This course underscores the environmental challenges faced by the world given the inter-linkages between the economy and the natural environment. It put emphasis on the analytical skills to appreciate the environmental issues and engage with policy-related challenges from a developing economy perspective.

Does the course connect to, build on or overlap with any other courses offered in AUD?

An introductory elective course on Environmental Economics (EC231) is currently offered to the MA Economics students. However, it is increasing felt that there is a need for a course which imparts training from an applied perspective in this field to the economics students. This will enable them to understand the various tools and techniques in terms of their applications to the environmental issues.

Specific requirements on the part of students who can be admitted to this course:

(Pre-requisites; prior knowledge level; any others – please specify)

Econometrics I

No. of students to be admitted (with justification if lower than usual cohort size is proposed): As per university norms

Course scheduling (semester; semester-long/half-semester course; workshop mode; seminar mode; any other – please specify):

Semester

Course Details:

Summary: This course focusses on applied policy questions in environmental economics with emphasis on the crucial aspects of environment problems pertaining to economics agents such as households and firms, impact on economy as a whole, the role of technological advancements and mobilisation of finance.

Objectives: This course aims at equipping students with theoretical and empirical tools that are applied in the field of environmental economics. This includes familiarizing students with common problems faced in the empirical applications while addressing environmental concerns and in the formulation and effective implementation of environmental policy (with emphasis on the developing economies).

Expected learning outcomes:

After successfully completing this course, the students will be able to

Acquire familiarity with policy-oriented research in the field of environmental economics
Demonstrate the knowledge and analytical skills to critically evaluate environmental issues and policy questions.
Practically address key policy issues within environmental economics using real-world datasets.

Overall structure (course organisation; rationale of organisation; brief module outlines):

This course comprises of five distinct but related modules of addressing environmental problems from a microeconomic and macroeconomic perspective. Each of the module engage students with the empirical applications of the crucial aspects of environment problems pertaining to economics agents such as households and firms, impact on economy as a whole, the role of technological advancements and mobilisation of finance.

Course contents detailed (module-wise format):

(I) Module-wise Format with details for each module:

Non-market valuation techniques:

This module focusses on the interactions between the natural environment and people’s preferences with an aim to develop an understanding about individuals’ valuation of environmental resources or services and its importance for environmental policy formulation and implementation. The various techniques (such as revealed preference and stated preference) of environmental valuations are covered.
Phaneuf, D. J., & Requate, T. (2016). A Course in Environmental Economics: Theory, Policy, and Practicse. Cambridge University Press.
Mendelsohn, R. (2019). An examination of recent revealed preference valuation methods and results. Review of Environmental Economics and Policy. 1-17.
Hanley, N., & Czajkowski, M. (2019). The role of stated preference valuation methods in understanding choices and informing policy. Review of Environmental Economics and Policy. 13(2), 248–266
Alberini, A. (2019). Revealed versus stated preferences: what have we learned about valuation and behavior?. Review of Environmental Economics and Policy.

Production and the Natural Environment:

This module offers an understanding about the production-related environmental effects, contribution of environment to the production processes and production effects of environmental management practices and regulations.
Førsund, F. R. (2018). Multi-equation modelling of desirable and undesirable outputs satisfying the materials balance. Empirical Economics, 54, 67-99.
Dakpo, K. H., & Ang, F. (2019). Modelling environmental adjustments of production technologies: A literature review: Externalities and environmental studies. The Palgrave Handbook of Economic Performance Analysis, 601-657.
Dechezleprêtre, A., & Sato, M. (2017). The impacts of environmental regulations on competitiveness. Review of Environmental Economics and Policy. 11(2), 183–206
Goldar, B., & Majumder, P. (2022). What factors drive industrial plants in emerging economies to adopt ISO 14000 environmental management standards: Evidence from the Indian organized manufacturing sector. Environmental Development, 44, 100771.
Kumar, S., & Dua, P. (2022). Environmental management practices and financial performance: evidence from large listed Indian enterprises. Journal of Environmental Planning and Management, 65(1), 37-61.

Natural Capital and Macroeconomics:

Given the increasing applications of approaches from macroeconomics to studying environmental policy, this module focusses on macroeconomic tools and their application to environmental economics.
Hassler, J., & Krusell, P. (2012). Economics and climate change: integrated assessment in a multi-region world. Journal of the European Economic Association, 10(5), 974-1000.
Fischer, C., & Heutel, G. (2013). Environmental macroeconomics: Environmental policy, business cycles, and directed technical change. Annu. Rev. Resour. Econ., 5(1), 197-210.
Gallic, E., & Vermandel, G. (2020). Weather shocks. European Economic Review, 124, 103409.
Annicchiarico, B., Carattini, S., Fischer, C., & Heutel, G. (2021). Business cycles and environmental policy: Literature review and policy implications.

Technological Advancements and Environment:

There is a fundamental role for innovation and technological progress in order to deal with environmental problems effectively. This module thus focusses on the behavioural aspects and policies related to the development and adoption of environment friendly technologies.
Mohnen, P. (2019). R&D, Innovation and Productivity. In: ten Raa, T., Greene, W. (eds) The Palgrave Handbook of Economic Performance Analysis. Palgrave Macmillan, Cham.
Popp, D. (2019). Environmental Policy and Innovation: A Decade of Research. International Review of Environmental and Resource Economics, 13(3-4), 265-337.
Saunders, H. D., Roy, J., Azevedo, I. M., Chakravarty, D., Dasgupta, S., de la Rue du Can, S., ... & Wei, T. (2021). Energy efficiency: what has research delivered in the last 40 years?. Annual Review of Environment and Resources, 46(1), 135-165.
Touboul, S., Glachant, M., Dechezleprêtre, A., Fankhauser, S., & Stoever, J. (2023). Invention and global diffusion of technologies for climate change adaptation: a patent analysis. Review of Environmental Economics and Policy, 17(2), 316-335.

Sustainability and Green Finance

One of the key thrust of green finance is to increase the flow of finance from the public, private and institutional investors to mainstreaming sustainable development priorities. This module will put emphasis on the aspects related to financial domain such as climate risks, innovative financial instruments, etc.
Stroebel, J., & Wurgler, J. (2021). What do you think about climate finance? Journal of Financial Economics, 142(2), 487-498.
Giglio, S., Kelly, B., & Stroebel, J. (2021). Climate Finance. Annual Review of Financial Economics, 13, 15-36.
Bingler, J. A., Senni, C. C., & Monnin, P. (2022). Understand what you measure: Where climate transition risk metrics converge and why they diverge. Finance Research Letters, 50, 103265.
Colenbrander, S., Vaze, P., Vikas, C., Ayer, S., Kumar, N., Vikas, N., & Burge, L. (2023). Low-carbon transition risks for India’s financial system. Global Environmental Change, 78, 102634.

Week*	Plan/ Theme/ Topic	Core Reading (with chapter no.)	Additional Suggested Readings	Assessment (weights, modes, scheduling)
1	Module 1: Revealed Preference Models	PR: Ch 15
2-3	Module 1: Discrete Choice Models/ Value of Recreation Services/ Property Value Models	PR: Ch 16/17/18
4-5	Module 1: Stated Preference Methods & Review of Environmental valuation	PR: Ch 19 and journal articles such as Mendelsohn, R. (2019); Hanley, N., & Czajkowski, M. (2019); Alberini, A. (2019); etc.
6-7	Module 2: Modelling Pollution-generating technologies	Ch: Dakpo, K. H., & Ang, F. (2019)
8	Module 2: Firm Performance and Environmental Performance	Journal articles such as Dechezleprêtre, A., & Sato, M. (2017); Goldar, B., & Majumder, P. (2022); Kumar, S., & Dua, P. (2022); etc.
9-11	Module 3: Environmental Macroeconomics	Annicchiarico, B., Carattini, S., Fischer, C., & Heutel, G. and other journal articles
12-13	Module 4: Technological progress and environment	Mohnen, P. (2019) and other journal articles
14-15	Module 5: Sustainability and Green Finance	Relevant journal articles

Note: *This is only a tentative week plan.

(II) Assessment Plan (weight, mode, scheduling) for the course:

The assessment pattern will include class test - 40 percent, class presentations (individual/group) – 20 percent and term paper – 40 percent

Pedagogy:

Instructional strategies: lectures
Special needs (facilities, requirements in terms of software, studio, lab, clinic, library, classroom/others instructional space; any other – please specify): Classroom equipped with projector.
Expertise in AUD faculty or outside: AUD Faculty
Linkages with external agencies (e.g., with field-based organizations, hospital; any others): NA