USEMEEE5 ECTSQ3EnglishMaster
Environmental Economics and Policy
FaculteitFaculty of Law, Economics and Governance
NiveauMaster
Studiejaar2026-2027
Beschrijving
Course goals
At the end of the course, the student is able to
- Explain the economic rationale for environmental policy and identify the market failures that motivate intervention;
- Interpret and critically evaluate formal economic models of environmental policy instruments, with attention to efficiency and distributional consequences;
- Evaluate current climate policy design, including carbon pricing, innovation support and border measures, against economic criteria;
- Critically assess empirical evidence on the effects of environmental policy, including the identification strategies used to establish causal claims; Recognise the political-economic constraints on policy implementation and assess the trade-offs involved in choosing among second-best alternatives
- effectively participate in and contribute to a team;
- present and defend evidence-based policy recommendations to a specialist audience;
- communicate policy-relevant economic analysis to a non-specialist audience;
- provide constructive feedback and productively use feedback received
Content
While the GDP growth achieved since the industrial revolution has allowed for dramatic increases in living standards, it has largely come at the expense of the local and global environment. Greenhouse gas emissions for instance have risen in tandem with global GDP, with the resulting changes to the climate impacting current and future livelihoods. At a more local scale, adverse health effects from air pollution and effects of nitrogen pollution on biodiversity call for policy intervention.
Addressing these challenges requires understanding why markets fail to account for environmental costs and what policy instruments can effectively correct these failures. This course builds that understanding through formal economic modelling and empirical policy evaluation, starting from the foundations of environmental economics before turning to specific policy challenges and real-world applications.
A sizeable part of the course focuses on climate policy. Topics include the economic rationale and effects of interventions such as carbon taxes and emission trading schemes (e.g., EU ETS), as well as green energy and innovation subsidies and the EU Carbon Border Adjustment Mechanism (CBAM). This course further addresses political economy constraints, including the drivers of climate policy support and the distributional impacts of climate policy.
The course also examines environmental externalities beyond climate change. Applications include vehicle use, which generates multiple simultaneous externalities (CO2 emissions, air pollution, congestion), and food production, where adverse effects range from nitrogen pollution, health effects to animal welfare impacts.
Each week consists of a lecture and either a seminar or project meeting. Lectures cover the theoretical foundations of environmental economics and policy. Seminars are used for group presentations and critical discussion of empirical literature on environmental policy evaluation. In project meetings, student teams work towards a policy brief assessing a current environmental policy challenge defined by the Dutch Ministry of Economic Affairs and Climate Policy.
Exit qualifications
- Being able to think and act at an academic level.
- Working in teams at an academic level.
- Communicating in English at an academic level.
- The graduate has, at an academic level, the knowledge and understanding of how to translate economic theory into practical public policy-making;
- The graduate is able to critically evaluate the quality and outcomes of studies produced by advisory government bodies and policy notes by government departments;
- The graduate has the skills and expertise required for public policy analysis, such as a strong thematic knowledge and a sound empirical toolkit to investigate the effectiveness of policy interventions;
In case online access is required for this course and you are not in the position to buy the access code, you are advised to contact the course coordinator for an alternative solution. Please note that access codes are not re-usable meaning that codes from second hand books do not work, as well as access codes from books with a different ISBN number. Separate or spare codes are usually not available.
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