Environmental Economics - Theory and Policy

This intermediate-level undergraduate textbook in environmental economics builds on the microeconomics courses students take in their first year. It intentionally does not survey the whole field or present every possible topic. Instead, there is a clear focus on the theory of environmental policy and its practical applications. Most of the applied parts of the book deal with the economics of environmental policy in the European Union and in the United States. The book combines basic environmental economic analysis, such as the internalization of externalities, with recent developments in this field, including induced technical change and coalition theory. Moreover, topics from daily policy debates such as global warming are put into economic perspective. This is done in an intelligible form for advanced undergraduate students of economics, business administration and related fields. Each part of the book contains a set of exercises and suggested solutions. Features • Directly integrates economic theory and environmental policy • Presents recent developments in this field for Europeans, Americans and international audiences • Contains a rich set of exercises and answers

Part I. The Internalization of Externalities as Central Theme of Environmental Policy: 1. Foundations 2. Implications of making the concept of internalization programmatic in environment policy Part II. Strategies for Internalizing Externalities: 3. Negotiations 4. Environmental liability law 5. Pigovian tax Part III. Standard-Oriented Instruments of Environmental Policy: 6. Introduction 7. Types of environmental policy instruments 8. Assessment of environmental policy instruments Part IV. Extensions of the Basic Environmental-Economics Model: 9. Environmental policy with pollutant interactions 10. Environmental policy with imperfect competition 11. Internalization negotiations with asymmetrical information 12. The 'double dividend' of the green tax 13. The induction of advances in environmental technology through environment policy Part V. International Environmental Problems: 14. Introduction 15. International environmental agreements 16. Instruments of international environmental policy – the example of the EU's emissions trading 17. Epilogue: the vision of a federal US emission trading system Part VI. Natural Resources and Sustainable Development: 18. Resource exhaustion - the end of mankind? 19. Renewable resources 20. Sustainable development Epilogue: three types of externality and the increasing difficulty of internalizing them.