Sylabus
Structure of the course
1. Ex post Modelling of Economic-Envi Relationship Environmental Kuznets Curve - EKC hypothesis, theoretical underpinings, key shortcomings and econometric issues. Decomposition analysis – index base decomposition, Divisia index, interpretation
2. Ex ante E3-Impact Modelling Family of the models to analyse impacts of enviro/energy regulation: IOA, partial equilibrium and energy system modelling, GE models, macro-econometric models
3. Introduction. Environmental damage, environmental externality and health benefits A. Why do we need to care about the environment (envi functions)? Introduction to Resource economics. B. External cost associated with air quality pollution
4. Valuation of health risk (i) Valuation of morbidity: household production function, 3 welfare components; (ii) Valuation of premature mortality: life expectancy and VOLY, Value of a Statistical Life
5. Correcting externality & Policy-mix (i) We define (true) externality, making a clear distinction between technological externality, pecuniary external effect, and other impacts. (ii) Is there an optimal level of externality? (iii) How to correct for the externality: Coase vs. regulation; Direct regulation vs. Market-based instruments; Tax vs. Transferable rights (iv) Optimal tax (weak and strong double dividend)
6. Economics of Climate Change & Social Cost of Carbon Carbon flows and Stock; Social Cost of Carbon; Integrated Assessment Models; Sources of uncertainties, intra- and inter-generational equity
7. Welfare measurement> Theory I (i) Proper Welfare Measures for marketed goods; Marshallian vs. vs Hicksian demand (Consumer Surplus, Equivalent/Compensating Variation); Computing variations (ii) Welfare measures for Discrete Goods
8. Dean’s holiday [no lecture]
9. Stated preferences: Theory, Validity, Elicitation Welfare under quantity constraints, WTA vs. WTP SP technique in brief; History of SP valuation; theoretical validity; Incentive compatibility, IIA; elicitation formats; Random Utility Model; Non-parametric and parametric estimation of discrete choice data
10. Discrete choice experiments (i) Designing experiment: choice task, alternatives, attributes, their levels; experimental designs (ii) Econometric modelling and preference heterogeneity (CL, MXL, Latent Class, Hybrid Choice models)
11. Revealed preferences: Hedonic pricing Models Historical background of the method and its application. The economic model, hedonic price function and implicit price, econometric issues; Hedonic wage function, housing market, attributes of durables
12. Revealed preferences: Recreation Demand History of the method, the typology of travel cost models, zonal vs. individual travel cost method, random utility models. Data availability and econometric issues in modelling.
13. Energy Efficiency Modelling consumer energy demand; energy efficiency and rebound effect, energy efficiency gap.
Anotace
The course features a series of lectures on environmental economics, partly covering also energy economics, health economics and welfare measurement, all linked to environmental problems. The course provides students with the framework to understand the theory and methods of environmental economics, consumer behaviour and non-market valuation in particular.
Following topics are included:
- Environmental Kuznets Curve - association between the economy and the environment
- Impact assessment - Regulatory impact assessment by means of optimisation models (the energy system partial equilibrium model TIMES), input-output analysis, computable general equilibrium models
- Externalities -environmental damage, definition, optimum and quantification of the external costs, focused on environmental and health externalities due to air quality (Externe's impact pathway analysis)
- Valuation of health benefits - valuation of morbidity (COI, diswelfare), premature mortality and Value of a Statistical Life, QALY vs. WTP approach
- Policy mix - instruments to correct the externality
- Climate Change Economics - Social Cost of Carbon, Integrated Assessment Models, Discounting, Equity
- Welfare Measurement - Hicksian demand, Consumer Surplus
- Revealed preferences - Travel cost model (recreation demand), Hedonic pricing
- Stated preferences - Theory and Validity; Contingent valuation; Non-parametric estimation; Discrete choice experiments (design, econometric modelling, preference observed and unobserved heterogeneity (MXL, LC)
- Energy Efficiency and Energy Efficiency Paradox