Prof Robin Burgess and Dr Clare Balboni 

This course is available on the BSc in Econometrics and Mathematical Economics, BSc in Economics, BSc in Environment and Sustainable Development with Economics, BSc in Environmental Policy with Economics, BSc in Geography with Economics, BSc in International Social and Public Policy and Economics, BSc in Philosophy and Economics, BSc in Philosophy, Politics and Economics, BSc in Philosophy, Politics and Economics (with a Year Abroad) and BSc in Politics and Economics. This course is available as an outside option to students on other programmes where regulations permit. This course is available with permission to General Course students.

This course is suitable for students on Economics joint degree and other programmes who have followed the quantitative stream of the new economics curriculum. 

This course makes use of key concepts in economic theory as well as econometric analysis. We welcome all students with  a strong background and proven record in quantitative courses such as econometrics, statistics, microeconomics, mathematics, other advanced economics courses.

This course explores key concepts and recent advances in environmental economics with the view to addressing environmental policy questions. It is concerned with studying the interaction between human activity and the natural environment. We capture work both on how economic growth can be made cleaner but also on how to mitigate the damages from this growth. The course illustrates how frontier theory and empirics from economics can be brought to bear on the key climate, environmental and energy challenges that face mankind. These topics loom ever larger in careers across the private sector, public sector and academia and this course helps to prepare students for these careers.

Autumn term deals with how humans interact with the natural environment and covers growth and the environment, public goods and externalities, climate change, pollution, natural resource depletion, migration, urbanization, trade, values and preferences and social justice and the environment.

Winter term shifts to examining what policies and actions might be taken to confront and slow environmental change and covers adaptation, taxation, tradable permits, conservation, access to energy, technical change, innovation and diffusion, infrastructure and structural change and political economy.

This course is complementary to the courses Applied Environmental Economics (GY222) and Applied Economics of Environment and Development (GY329).

15 hours of lectures and 10 hours of classes in the AT. 15 hours of lectures and 9 hours of classes in the WT. 1 hour of classes in the ST.

There will be a reading week in Week 6 of WT (no lectures or classes that week).

This course is delivered through a combination of classes and lectures totalling a minimum of 50 hours.

Weekly classes will focus on academic papers covered in the lecture alongside an assignment to guide your reading. These are designed to help deepen your analytical capacity. Students are expected to engage with weekly assignments and actively participate in class discussions. Two assignments will be marked, and feedback provided each term. Students are permitted to work in groups but must provide their own individual written attempt to each assignment.

The course combines theory and empirics and has a strong applied focus. There is no textbook for the course. Students will instead be required to engage with academic papers at the frontier of the literature, as well with historic seminal works.

The following are indicative of recent papers students can expect to engage with:

• Carleton, T.A., Jina, A., Delgado, M.T., Greenstone, M., Houser, T., Hsiang, S.M.,
• Hultgren, A., Kopp, R.E., McCusker, K.E., Nath, I.B. and Rising, J., 2020. Valuing the global mortality consequences of climate change accounting for adaptation costs and benefits, Forthcoming QJE.
• Deryugina, T., Heutel, G., Miller, N. H., Molitor, D., & Reif, J. (2019). The mortality and medical costs of air pollution: Evidence from changes in wind direction. American Economic Review, 109(12), 4178-4219.
• Hassler, J., Krusell, P. and Olovsson, C., 2021. Directed technical change as a response to natural resource scarcity. Journal of Political Economy, 129(11), pp.3039-3072.
• Desmet, K., Kopp, R.E., Kulp, S.A., Nagy, D.K., Oppenheimer, M., Rossi-Hansberg, E. and Strauss, B.H., 2021. Evaluating the Economic Cost of Coastal Flooding. American Economic Journal: Macroeconomics, 13(2).
• Henderson, J.V., Storeygard, A. and Deichmann, U., 2017. Has climate change driven urbanization in Africa?. Journal of Development Economics, 124, pp.60-82.
• Shapiro, J.S., 2021. The environmental bias of trade policy. The Quarterly Journal of Economics, 136(2), pp.831-886.
• Aghion, P., Bénabou, R., Martin, R. and Roulet, A., 2020. Environmental preferences and technological choices: is market competition clean or dirty? (No. w26921). National Bureau of Economic Research.
• Banzhaf, S., Ma, L. and Timmins, C., 2019. Environmental justice: The economics of race, place, and pollution. Journal of Economic Perspectives, 33(1), pp.185-208
• Shapiro, J.S. and Walker, R., 2018. Why is pollution from US manufacturing declining? The roles of environmental regulation, productivity, and trade. American Economic Review, 108(12), pp.3814-54.
• Metcalf, G.E. and Stock, J.H., 2020. The macroeconomic impact of Europe’s carbon taxes (No. w27488). National Bureau of Economic Research.
• Carlson, C., Burtraw, D., Cropper, M. and Palmer, K.L., 2000. Sulfur dioxide control   by electric utilities: What are the gains from trade?. Journal of political Economy, 108(6), pp.1292-1326.
• Balboni, C., Burgess, R. and Olken, B. (2021). The Origins and Control of Forest Fires in the Tropics. Mimeo LSE and MIT.
• Banares-Sanchez, I., Burgess, R, van Reenen, J., Simpson, P. (2022) Global Innovation and Diffusion of Solar Energy. mimeo LSE
• Balboni, C. A. (2019). In harm's way? Infrastructure investments and the persistence of coastal cities. Revise and resubmit American Economic Review
• Burgess, R., Hansen, M., Olken, B. A., Potapov, P., & Sieber, S. (2012). The political economy of deforestation in the tropics. Quarterly Journal of Economics, 127(4), 1707-1754.

Exam (100%, duration: 3 hours, reading time: 15 minutes) in the spring exam period.