Environmental cost-benefit analysis

Seminar. Last offered: Fall, 2021.

How should decision-makers (e.g., governments or financial investors) decide between potential projects and policies? Answering this poses many challenges, not least for many environmental projects and policies. Such projects and policies may have effects on goods and services that are not traded in the market, adverse distributional effects, and inherent risks and uncertainties. Parallel to this are the challenges of financing sustainable growth.

This course introduces students to the general method and use of cost-benefit analysis. There will be particular emphasis on applications to resource and environmental economics. The course therefore deals with many crucial aspects of environmental cost-benefit analysis.

The goal is to equip students with the necessary background to assess the validity of practical environmental cost-benefit analyses, as well as to formulate how current guidelines can be improved based on the latest economic research.

The course will consist of a lecture block that provides an overview and introduces students to key concepts.

Examples of topics students may work on:

  • Revealed preferences methods for valuing non-market goods.

  • Contingent valuation method for valuing non-market goods.

  • Value or benefit transfer.

  • Distributional issues in cost-benefit analysis.

  • Discounting approaches and reasonable values.

  • Discounting and inequality.

  • Discounting under uncertainty.

  • Discounting of scarce non-market goods.

  • Applications to climate change.

  • Other applications.

Distribute justice

Course. Last offered: Spring, 2021.

The course is an introduction to economic approaches to justice and fairness from both theoretical and empirical perspectives.

1. The course starts with an introduction to welfare economics, the part of economics that addresses ethical issues. This introduction will be framed as a discussion of the possibility for a society to aggregate different views on what is good. Arrow’s impossibility theorem states that this is infeasible, but subsequent approaches have explored how this result may be circumvented.

The course considers two such approaches. The most common way to avoid the impossibility result is to assume that well-beings of agents can be both measured and interpersonally compared. An alternative is to restrict the attention to one-dimensional issues, such as individual income.

2. The course contains an introduction to empirical measurement of social welfare and inequality. This introduction will be framed around how to rank income distributions and Lorenz curves. The course considers what properties measures of inequality should satisfy, how to theoretically derive measures of equal versus unequal distributions, and how to measure inequality in practice. The course will also cover a number of empirical questions related to inequality.

3. The course contains an introduction to intergenerational justice. This introduction will be framed around conflicts between the interests of the present and the interests of future generations. Related to this conflict is the question of how to treat future generations.

The course identifies and illustrates ways to resolve intergenerational conflicts by normative analysis based on intertemporal social choice. It then considers whether normative analysis based on intertemporal social choice is relevant for actual decision-making. The course will also cover applications to the climate and population problems.

PhD workshop in climate economics

Workshop. Last offered: Spring, 2021.

The workshop has two objectives: First, to introduce PhD students to recent articles and working papers on the research frontier in climate economics with special emphasis on (i) adaption to and damages from climate change, (ii) climate policy (both normative and positive considerations), and (iii) innovation and adoption of green technologies. Second, doing so with a focus on:

  • What makes a good research paper?

  • Econometric methods used in climate economics.

  • Computational and model estimation/calibration tools applied in climate economics.

  • How does the results compare to related literature?

  • Scope for future research.

The form of the workshop will be weekly meetings of 1 hour, where a reading group member will present a paper from the reading list, where after it will be discussed with focus on the above five points.

Guest lectures

Perspectives on sustainability. Course. Last offered: Fall, 2021.

Advanced economics of the environment and climate change. Course. Last offered: Fall, 2021.