Economics of sustainable development


This course explores some of the most important areas of environmental economics and economic issues of sustainable development in a framework that integrates economic growth, trade and public economy. Special emphasis is given to sustainable use of natural resources, global pollution problems and decision making with irreversibility. It gives the rational of regulations and more generally explains the role of the state in mitigating the negative consequences of market failures, and its incentives to do so in different environments.


Environmental regulation design

       Information asymmetry and regulations
       Monitoring and the enforcement of regulations
       Limited liability and moral hazard

Environmental risk
      Environmental CBA and the discount factor
      Economic analysis of the Precautionary Principle
      Risk perception and regulations

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

International environmental problems
     International trade and the environment
           Non-strategic and strategic trade
           North-South trade & the environment
           Trade and natural resources
     International environmental agreements


North-South trade and the environment

  • Copeland and Taylor (2003), Trade and the Environment: Theory and Evidence, Princeton University Press.
  • Copeland and Taylor (2001), "International trade and the environment: a framework for analysis", NBER working paper 8540
  • Copeland and Taylor (2004), "Trade, growth and the environment", Journal of Economic Literature, 42: 7-71.
  • Antweiler, Copeland and Taylor (2001), "Is free trade good for the environment?", American Economic Review, 91(4): 877-908

Trade and renewable resources

  • Brander and Taylor (1997), "International trade and open-access renewable resources: the small open economy case", Canadian Journal of Economics, 30(3): 526-52.
  • Brander and Taylor (1997), "International trade between consumer and conservationist countries", Resource and Energy Economics, 19(4): 267-297.
  • Brander and Taylor (1998). "Open access renewable resources: trade and trade policy in a two-country model", Journal of International Economics, 44: 181-209.

Strategic environmental policy

  • Barrett (1994), "Strategic environmental policy and international trade", Journal of Public Economics, 54(3), 325-38.
  • Brander and Spencer (1985), "Export subsidies and international market share rivalry", Journal of International Economics, 18: 83-100.
  • Eaton and Grossman (1986), "Optimal trade and industrial policy under oligopoly", Quarterly Journal of Economics, 101(2): 383-406.

International environmental agreements

  • Barrett (1994), "Self-enforcing international environmental agreements", Oxford Economic Papers, 46: 878-894.
  • Barrett (2005), "The theory of international environmental agreements", in Handbook of Environmental Economics, Volume 3. Edited by K.-G. Mäler and J. R. Vincent, Chapter 28
  • Nordhaus (2015), "Climate clubs: overcoming free-riding in international climate policy", American Economic Review, 105(4): 1339-1370.