Economic of Environnement. The Age of Constraints

Syllabus

1 Teachers

2 Prerequisites

Some background knowledge in economics and micrœconomics is required: what is a competitive market ?, what is a price?, supply and demand graph,s general equilibrium concept and its limits, discounted value and interest rate.

Some background knowledge in public economics (provision of a public good, redistribution, analysis of taxation and incentives) is a plus.

However, those concepts and knowledge will be reexplained during the course. There will no evaluation of abilities in those economic skills.

During the course, some models will be presented, mostly graphically and stressing the intuitions. Evaluation will not require any mathematical skill beyond very simple calculus (applying a tax rate to a price, using an elasticity to compute the reduction in volume or value due to a price increase).

3 Expected skills at the end of the course

At the end of the course students should have increase knowledge of Climate Change physics and should be able to debunk most of deniers arguments. Their knowledge should include also biodiversity and other aspects of planetary limits.

Students will be provided with an extensive of quantitative facts regarding human pressure on the planet and should therefore avoid wrong conception of the stakes. They will also be introduced to the main policy tools and will have a large set of technical and academic references to deepen the subjects of the course.

Beyond strong contextual knowledge, they should be able to analyse environmental public policies, determine if necessary, why the eventually failed and be able to imagine and propose alternate solutions based on this failure.

4 Course description

Humankind pressure on the planet is now pushed to the limits as defined in (Rockström et al., 2009 ; Steffen, Richardson, et al., 2015). Economic development added to demographic pressure are building up a major ecological crisis which consequences may compromise the ability to live on the planet and induce a risk of a major shift in planet climate (Calvin et al., 2023), can trigger a mass extinction (Wagler, 2018).

The first aim of the course is to grasp what is at stake, from climate change and earth physics to natural resource depletion or water crisis. An emphasis will be made on the human activities and their impact on climate and planetary ecosystems. Link between inequality and emissions will also be discussed, producing a rather different view than the one promoted by (Chancel, 2022).

The second aim is to evaluate what change is needed to allow 10 billion humans living as well as possible on a bounded planet. Simply put, the goal is to imagine the world of tomorrow and to explore from technology to sufficiency what could be the pillars of a human society respectful of planetary limits.

The third aim of the course will review theorical economic approaches and real world public policy tools to limit human activities inside planetary limits. Here, we will explore the tools which have been defined by public choice theorists. But we need to go form theory to practice and to understand what has succeeded or failed (failures are numerous and important) in trying to apply those tools to real world green policies.

5 Readings and materials

There are a huge number of things (article, books, reports) to read on the environmental question. Here is an opinionated selection, recommended but not mandatory.

  1. Calvin et al. (2023) : the 6th assessment report of the IPPC is the modern era encyclopedia, encompassing all environmental issues
  2. Stern (2009) : the general audience version of the famous Stern report (2006), focused on climate change
  3. Jackson (2009) : an important milestone on the growth critic
  4. An Unconvenient Truth, Al Gore and Davis Guggenheim classic documentary, focused on climate change
  5. Diamond (2005) : a classical and controversial book on failed civilizations
  6. Wagner et Weitzman (2015) : one of the best text about the economist’s view on climate change
  7. Klein (2014) : the alt view on climate change policies
  8. Keith (2013) : the pro view on geœngineering, to read to understand (and to fight ?)

6 Evaluation & Validation

Students are evaluated on the basis of

  1. 3 quiz exams, online, during 3 sessions in class. Typically, the quizzes are composed of 8 to 10 closed questions (3 possible answers, one of which is correct) and 2 to 3 open questions (very short essay, 250 words, on a question). Quiz questions cover matters seen during the courses before the exam. The last quizz covers the whole course. Quiz questions are straighforward and are directly related to the course. Usually, the 2 best marks of the three tests are used to make the final quiz note. Quizz is weighted to 30% in the final mark.
  2. An essay, usually a book review, around 20k characters (±10%). The book for the book review has to be validated and should deal with environmental questions. A selection of eligible books is provided, but students are encouraged to select any book they’d like to review. Ideally, the book review should review a book not already read by the teacher and provide material for next year course ! The essay weighs 60% of final mark.
    The essay can be something else than a book review. Students should check with their teacher if their project is ok for the course validation.
  3. Alternatively to an essay, groups of student (2 to 3 students per group) can animate an in-class debate. The animation of a class debate is done on a predefined subject (like Nuclear Energy) and 2 groups present the pro and con side of the debate. Then the class participates. The groups have to comlplete this animation by a debrief of the debate, presented and the end of the semester as a presentation (slides plus oral presentation — no essay). This replaces the essay with the same weight (60%).
  4. Participation during class. While with a minor weight (10%) in the final mark, participation is granted.

7 Workload

The course is designed to bring students to deepen their thoughts on environmental matters. As such, not much work in expected, except for the writing of the essay or the preparation of the debate. Some reading will be proposed for several sessions. These readings are optional, they can facilitate the understanding of the course but are not mandatory.

Students that wish to complement their knowledge on some topics (economics, public choice economics, thœry of measure, degrowth, cliometry, geophysics, environmental justice philosophy to cite some) are most welcome to ask for reading lists that we will be happy to supply).

8 Pedagogic Organisation

Without any originality, the course is divided in sessions covering different topics (see sessions description section below). However, this routine is broken by the class debates, where students explore a subject and try to argument and counter argument. This brings more interactivity to the course. For non-debate sessions, tools such as wooclap are extensively used to deliver more lively classes. Open discussion is strongly encouraged. It is also possible, on demand, to adapt the content of one or more session to a specific topic students would like to see covered.

9 Moodle

Moodle is used (mostly for the tests), but not fully. A website is provided (www.eœ-aoc.fr) with access to all the content for the course (slides, references, outline).

10 Session description

10.1 Session 1: Malthus & Co, a Theory of limits

In this session we establish the basis for the unified model of growth. This model allow us to understand how limited resources are decisive for the growth regime. The link with inequalities is also investigated. Data on past economic growth, population dynamic, wages, inequalities is used to illustrate the insights.

Main references: Galor et Weil (1999), Galor et Weil (2000), Galor (2010), chap. 5 of Lucas (2002) (Industrial Revolution: past and future)

Slides

10.2 Session 2: The Case of Air Pollution

Since the beginning of the industrial revolution, air pollution has been one of the most visible and deadly of the negative aspects of economic development. Based on the history of reactions to air pollution, we establish during this session the first elements on policy tools. Those range from early ban laws to sophisticated and complex trade systems.

Main references: Newbery, Siebert et Vickers (1990), Stiglitz et al. (2017), World Bank (2025)

Slides

10.3 Session 3: Carrying Capacity

The reference paper by Rockström et al (Rockström et al., 2009) has given a workable definition to planetary limits and can help us understand what is specific with anthropocene. We review those elements in this session.

Main references: Rockström et al. (2018); Steffen et al. (2018), Steffen, Broadgate, et al. (2015)

Slides

10.4 Session 4: IPCC&Earth Submit

Created in 1988 by the WMO and UNEP is a major institution. We review the birth of this huge project, its main productions and conclusions, plus an eye on the way it functions.

Main references: Brundtland (1987), Calvin et al. (2023)

Slides

10.5 Session 5: A Crash Course on Climate Change

This (long) session will introduce students to the core principle of climate science. We start from Joseph Fourrier and the prophetic work of Arrhenius (arrhenius1896? years ago). The main drivers of climate change are reviewed, explaining the core metrics that every climate carer should know. These elements are a bit technical but are the starting point to understand what has to be done and how to answer to deniers.

Main references: Calvin et al. (2023), (arrhenius1896?)

Slides

Depending on students needs and curiosity as well as time available, some sub sessions are part of this CCCC:

subsession 1: Sources of emissions

This subsession is nearly mandatory as it covers the basis for public policy: from where come the GHG emissions, by what activities, to whom may they be imputed. We discuss also inequalies in carbon emissions and provide an alternative view to the mainstream one.

Main references: Hubacek et al. (2017), Lenzen et Murray (2010), Chancel (2022)

Slides

subsession 2: Damages

Delays in mitigation are increasing the chance of a sharp rise in temperatures. Today, some of the early signs of the consequences of Climate Change are already real and hard. We review there the concept of damage, its measure and its distribution.

Main references: Calvin et al. (2023), Timbeau (2023), JRC-PESETA program

Slides

subsession 3: Geœngineering

Implementing a sound policy to mitigate climate is difficult and costly. Engaging into massive sufficiency is still a dream. Some quick and dirty solutions then appear as silver bullets solving all the difficult part of the equation. What if a low hanging fruit was just there to finally prevent global warming as if we had a magic wand. We review in this session the reality of geœngineering and debunk all the fake hopes. However, we discuss to what extent it may occur one day, even if the risks are beyond what we can anticipate.

Main references: Keith (2013)

Slides

subsession 4: Climate deniers

Deniers are everywhere and at the root of the fundamental divide inside the population. We explore how and why in 2025 there are still people not « believing » in Climate Change but also the moving shape of denying and its modern expression.

Main references: to be updated

Slides

subsession 5: Nuclear energy

Is nuclear energy a solution to decabonation of energy production ? What Fukushima (and Tchernobyl) have changed for this industry ? What can we expect of technical progress in that field ? We review here the state of nuclear energy industry, focusing on the economics of the atom. Usually this session is a class debate.

Main references: to be updated

Slides

10.6 Session 6: A Master Plan: ‹Clean Planet for All› by the European Commission

Europe has a plan for mitigating and adapting to climate change. This is called the Green Deal and was established in nov. 2018 as a communication from the Commission, « Clean Planet for All ». We review the plan, what it implies in economic terms, discuss the implementation of green policies and the difficulties, hurdles and resistance they face.

Main references: European Commission (2018)

Slides

subsession 1: The up and down of climate policy

We review in this session the failures or sucesses of a selection of public policies: implementing a carbon tax in France versus in Sweden, measuring and incentivizing energy efficiency in residential buildings in France. This should allow to start to understand the difficulties inherent to climate change mitigation.

Slides under construction

10.7 Session 7: The Montreal Protocol: We Saved the World Once, Why Not Twice ?

At this stage of the course, students should be demoralized and depressed by what needs to be done, the difficulty of it and the so little already done. The case study of the Montreal Protocol, where the notion of epistemic communauty (P. Haas) is going to be introduced, is the moment where we are going to wrap up everything seen so far. The success of the ozone fight can be leveraged for climate action and set the ground for a little bit of optimism.

Main references: Whitesides (2020), Haas (1995), Andersen et Sarma (2002)

Slides

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