Environmental Economics revision notes under BEE2034 from the University of Exeter. Created in 2021, these 54 page notes are a great revision tool.

  • Class Year
  • 2021
  • Number of Pages
  • 54
  • Staff Rating
  • 4.5/5

These Environmental Economics (BEE2034) revision notes cover the following topics and subtopics:

Topic 1 Environment & Social Decision-making

  1. Whom do we care?
  2. Welfare school
  3. Efficiency
  4. Market failure

Topic 2 The regulation of pollution

  1. Coase theorem
  2. Voluntary Measures
  3. Command and control (W4)

Emission Limit

Technology standard

  1. Market-based Instruments

Tradeable permits

Pigouvian taxes

  1. International Pollution and IEAs

Topic 3 Appraising Projects & Policies

  1. Social Cost-Benefit Analysis

CBA Decision Rules:

Pareto Optimally

The Hicks-Kaldor Criteria (potential Pareto)

Problem: Time inconsistency – delay cost

CBA & Externalities

CBA & Sustainability

Comparison of CBA & MCA

  1. Non-Market Valuation

Production function

Revealed preference

Travel cost method

The hedonic pricing method

Stated Preference

The contingent valuation (CV) method

Choice experiments

Topic 4 Natural Resources Management

  1. Renewable: Fish

The biological model


Maximum Sustainable Yield:

The Economic Model

Economic Rents – supernormal profit

World Fisheries nowadays

Regulation of fishery:

      • Command and control
      • Tax Instruments: the success of C&C has been limited
  1. Renewable: Forests

Max Sustainable Yield (Biological Model):

Maximum Present Value (Economic Model):

Optimal Single Rotation:

The Multiple rotation model:

Non-timber benefits (B)

  1. Non-Renewables: Mining

Non-renewable resources

Assumption: two periods

Assumption: unlimited period

In a perfectly competitive industry

economic rent:


  1. Non-renewables resources: Exhaustion

Prophets of Doom

Predictions of Economic Theory

The Role of price

  1. Non-renewables: Sustainability

Optimal Growth Models

Robert Solow: Optimal Growth Theory

The Hartwick-Solow Rule-Rawlsian Intergenerational SWF

Oil and the rule:

Observation on the rule

The weak vs. Strong Sustainability Debate

Measuring Sustainability

Green National accounts


Environmental issues:

Pollutions: air, water, soil, noise, light, visual

Global warming:

Ocean acidification, oil pollution

Loss of biodiversity, degradation of natural capital stocks (sustainability),


Ozone layers depletion

Acid rain

Carbon trading


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