2025
Environmental Economics
Name: Environmental Economics
Code: ECN09800D
6 ECTS
Duration: 15 weeks/162 hours
Scientific Area:
Ciências Económicas e Sociais
Teaching languages: Portuguese
Languages of tutoring support: Portuguese
Sustainable Development Goals
Learning Goals
- developing an understanding of the economic dimension of environmental problems, introducing the
conceptual framework that enables us to analyse, in economic terms, problems that are apparently so diverse
as biodiversity loss or water scarcity;
- applying this conceptual frame to a diversity of practical management problems, focusing on how it helps us
in understanding the nature of the problem (diagnostic), in searching for solutions (enviornmental policies)
and in comparative analysis of these solutions (policy evaluation);
- introducing the main analytical tools proposed by environmental economists to support environmental or
natural resources management decisions;
- developing skills of reading and criticising/commenting on environmental economic papers and studies.
conceptual framework that enables us to analyse, in economic terms, problems that are apparently so diverse
as biodiversity loss or water scarcity;
- applying this conceptual frame to a diversity of practical management problems, focusing on how it helps us
in understanding the nature of the problem (diagnostic), in searching for solutions (enviornmental policies)
and in comparative analysis of these solutions (policy evaluation);
- introducing the main analytical tools proposed by environmental economists to support environmental or
natural resources management decisions;
- developing skills of reading and criticising/commenting on environmental economic papers and studies.
Contents
Module I An Introduction to Environmental Economics
Scarcity, opportunity cost and choice. Economic functions of the environment. Pareto optimum, market failure
and public intervention. Market, property rights and environmental policy.
Module II Pollution Economics
Steps in defining a pollution control policy - the role of economic analysis. The optimal pollution level. Costeffectiveness.
Non-additive and diffuse pollutions.
Module III Decision Support Tools for Environmental Management
Cost-Benefit Analysis: the theoretic foundations and operational steps. Non-market valuation techniques:
dose-response functions; replacement costs; contingent valuation; travel cost and hedonic prices. Validity,
reliability and transferability of techniques and estimates.
Module IV Natural Resource Economics
Inter-temporal allocation of a stock resource. Renewable and exhaustible resources: the optimal extraction
path. Optimal forest turn.
Scarcity, opportunity cost and choice. Economic functions of the environment. Pareto optimum, market failure
and public intervention. Market, property rights and environmental policy.
Module II Pollution Economics
Steps in defining a pollution control policy - the role of economic analysis. The optimal pollution level. Costeffectiveness.
Non-additive and diffuse pollutions.
Module III Decision Support Tools for Environmental Management
Cost-Benefit Analysis: the theoretic foundations and operational steps. Non-market valuation techniques:
dose-response functions; replacement costs; contingent valuation; travel cost and hedonic prices. Validity,
reliability and transferability of techniques and estimates.
Module IV Natural Resource Economics
Inter-temporal allocation of a stock resource. Renewable and exhaustible resources: the optimal extraction
path. Optimal forest turn.
Teaching Methods
The teaching methods used in this course assume a reduced initial level of knowledge in economics by
students. Theoretical teaching is complemented by training in simple problems solving. Each student selects a
specific theme to write an essay, which is subject to evaluation. This essay is based on proposed readinds and
aims at:
- characterizing an environmental management problem;
- identifying alternative options for the solution of this problem;
- comparing these options using economic concepts and criteria, and
- proposing the best solution.
The evaluation of students is organised by modules, for which there are 3 written tests along the semester.
Marks in these tests are combined with those from the written essay according to a weighing systsme that
reflects a trade off between the incentive to independent work by the student (essay) and the more systematic
evaluation of knowledge on the subjects included in the 4 modules (tests).
students. Theoretical teaching is complemented by training in simple problems solving. Each student selects a
specific theme to write an essay, which is subject to evaluation. This essay is based on proposed readinds and
aims at:
- characterizing an environmental management problem;
- identifying alternative options for the solution of this problem;
- comparing these options using economic concepts and criteria, and
- proposing the best solution.
The evaluation of students is organised by modules, for which there are 3 written tests along the semester.
Marks in these tests are combined with those from the written essay according to a weighing systsme that
reflects a trade off between the incentive to independent work by the student (essay) and the more systematic
evaluation of knowledge on the subjects included in the 4 modules (tests).
Accreditations and Certifications
