ENSAE Paris - École d'ingénieurs pour l'économie, la data science, la finance et l'actuariat

Environmental Economics: Analysis and Modelling



Département : Economics


This class explores the problems created by asymmetric information, economic growth and trade in the design of environmental policies. Implications of asymmetric information (adverse selection, monitoring and moral hazard), public perception of environmental risks, lobbies and NGOs on environmental regulations are presented. Growth models incorporating environmental sustainability are discussed. Trade models allow us to analyze the environmental problems created by economic globalization. Coalition theory is applied to analyze international environmental agreements.


I- Environmental regulation design 

  •   Information asymmetry and regulations
  •   Monitoring and the enforcement of regulations
  •   Limited liability and moral hazard
  •   Risk perception and regulations
  •   Lobbies and non-profit organizations                 

II- Growth and the environment

  •  Limited resources and the Hartwick rule
  •  Pollution and steady growth
  •  Green growth & directed technical change

III- International environmental problems

   A- International trade and the environment

  • Non-strategic and strategic trade
  • North-South trade & the environment
  • Trade and natural resources

  B- International environmental agreements



Acemoglu (2009), Introduction to modern economic growth, Princeton University.

Aghion, P & P. Howitt (1998), Endogenous growth theory, MIT Press.

Copeland, B. & S. Taylor (2003), Trade and the Environment: Theory and Evidence, Princeton University Press.

J-J. Laffont & D. Martimort (2001), The Theory of Incentives: The Principal-Agent Model, Princeton University Press.

R. Perman, Y. Ma, J. McGilvray & MS. Common (2003), Natural resource and environmental economics, (third ed.), Pearson Education, Harlow.