Economics of the Environment, Natural Resources and Climate Change

Course content

The course introduces the basic economic concepts relevant for analyzing problems and policies relating to the environment, natural resources and climate change, using theories and analytical tools from microeconomics and macroeconomics. Additionally, the course introduces optimal control theory, which is applied to various problems within environmental and resource economics.


MSc programme in Economics – elective course


The course has been change to a solely Master course.


Grundet pensum overlab er det ikke tilladt at deltage på AØKK08382U - Economics of the Environment, Natural Resources and Climate Change, hvis "Miljø-, ressource- og klimaøkonomi (AØKK08094U)" eller "Economics of the Environment, Natural Resources and Climate Change (AØKA08227U)" er bestået.


Learning outcome

After completing the course, the student should be able to:



Account for..

  • The basic theory of optimal environmental policy and regulation, including the distinction between first-best and second-best policy, and the advantages and disadvantages of alternative instruments of environmental policy.
  • Basic theories of economic growth and the environment.
  • The basic theory of optimal management of natural resources.
  • Different sustainability concepts, including perspectives from ecological economics.
  • The basic principles for valuation of environmental goods and services.
  • The assumptions underlying standard Integrated Assessment Models of climate change.
  • The basic theory of optimal climate policy.
  • The basic economic issues and incentives relating to international negotiations on climate policy.



  • Apply the standard mathematical method for static optimization subject to constraints to analyze environmental policy problems such as the determination of the optimal level of pollution abatement and the optimal environmental tax rates.
  • Apply optimal control theory to solve dynamic optimization problems subject to constraints such as the determination of the optimal extraction of natural resources and the optimal pace of reduction of greenhouse gas emissions.



  • Explain and present central parts of economic theories and models of the environment, natural resources and climate change in a clear and correct language.
  • Undertake a critical evaluation of the strengths and weaknesses of the theories and models presented in the course.     
  • Present and evaluate key parts of the theory of environmental regulation and discuss the role of the state and the market in the implementation of environmental policy goals.
  • Apply the theoretical and empirical insights from the course in a critical analysis and discussion of important real-world problems of environmental and climate policy.


The teaching will consist of a combination of lectures presenting the relevant theories and evidence and class instruction in solving exercises that involve applications and extensions of the theories presented in the lectures as well as training in the application of the mathematical analytical tools used in the course, including optimal control theory.
As a complement to the ordinary lectures, the course will include a couple of guest lectures by Danish experts who will present examples of practical applications of the theories presented in the course.

The syllabus consists of a selection of scientific papers by leading authors in the field plus lecture notes. A detailed list of the syllabus will be posted in Absalon at the beginning of the course.


Knowledge of microeconomic and macroeconomic theory and mathematical tools for economists corresponding to the requirements in the entire Bachelor programme at the Department of Economics.

2 hours lectures 1 to 2 times a week from week 36 to 50 (except week 42).

The overall schema for the Master can be seen at KUnet:
MSc in Economics => "Courses and teaching" => "Planning and overview" => "Your timetable"

Timetable and venue:
To see the time and location of lectures and exercise classes please press the link/links under "Se skema" (See schedule) at the right side of this page. E means Autumn. The lectures is shown in each link.

You can find the similar information partly in English at
-Select Department: “2200-Økonomisk Institut” (and wait for respond)
-Select Module:: “2200-E19; [Name of course]””
-Select Report Type: “List – Weekdays”
-Select Period: “Efterår/Autumn – Weeks 31-5”
Press: “ View Timetable”

7,5 ECTS
Type of assessment
Written examination, 3 hours under invigilation
The exam assignment is in English and must be answered in English.
Without aids
Marking scale
7-point grading scale
Censorship form
No external censorship
for the written exam. The exam may be chosen for external censorship by random check.
Criteria for exam assessment

Students are assessed on the extent to which they master the learning outcome for the course.


To receive the top grade, the student must with no or only a few minor weaknesses be able to demonstrate an excellent performance displaying a high level of command of all aspects of the relevant material and can make use of the knowledge, skills and competencies listed in the learning outcomes.

Single subject courses (day)

  • Category
  • Hours
  • Exam
  • 3
  • Preparation
  • 147
  • Lectures
  • 42
  • Class Instruction
  • 14
  • English
  • 206


Course number
7,5 ECTS
Programme level
Full Degree Master

1 semester


Information about admission and tuition fee:  Master and Exchange Programme, credit students and guest students (Open University)

and venue:
Go to "Remarks".

Exam and re-sits: Go to "Exam".
Department of Economics, Study Council
Contracting department
  • Department of Economics
Contracting faculty
  • Faculty of Social Sciences
Course Coordinator
  • Peter Kjær Kruse-Andersen   (22-60758475823e5b3e5b828583753d517e74758283757e5075737f7e3e7b853e747b)

see 'Course Coordinators'.

Teachers of exercise classes:
Exercise class 1: August Emil Twile Nielsen
Exercise class 2: August Emil Twile Nielsen

Saved on the 29-08-2019

Are you BA- or KA-student?

Are you bachelor- or kandidat-student, then find the course in the course catalog for students:

Courseinformation of students