Economics of the Environment and Climate Change (p)

Course content

The course introduces the economic concepts and methods relevant for analyzing problems and policies relating to the environment and climate change. The course will explain the environmental economic approach to sustainable development and the role that economic instruments can play in protecting the environment and fighting global warming.


Taking the course will prepare students for further advanced studies in the Economics of the Environment, Natural Resources and Climate Change at the Master level.


MSc programme in Economics – elective course

Bacheloruddannelsen i økonomi – Prioriteret valgfag på 3. år (angivet med et p) Vedr prioriterede valgfag, se studieordningen.

The Danish BSc programme in Economics - prioritized elective at the 3rd year (symbolized by ‘p’)


Due to similar syllabus it is not allowed to register this course if the following courses has been passed: "Economics of the Environment, Natural Resources and Climate Change" (AØKK08382U and AØKA08227U) and "Miljø-, ressource- og klimaøkonomi (AØKK08094U)".


Learning outcome

After completing the course the student is expected to be able to:



  • Explain how economic activity depends upon and affects the environment
  • Describe the evolution of the main ideas in the history of enviromental economics
  • Account for the concepts of optimality and sustainable development used in the theory of environmental economics
  • Discuss the main arguments in the debate on environmental limits to growth
  • Describe the main challenges relating to global warming
  • Account for the relevance of the theory of public goods and externalities for environmental and climate economics
  • Describe the main alternative instruments of pollution control and climate policy and the criteria for the choice among them
  • Identify the factors that should guide the choice of pollution control instrument when policy makers have imperfect information
  • Account for how basic concepts from game theory can help to analyze international environmental problems such as global warming
  • Reflect on the arguments and evidence in the debate on the effects of international trade on the environment
  • Explain the alternative methods used to value non-marketed environmental goods and services
  • Discuss the concepts of the “safe minimum standard” and the “precautionary principle” in environmental policy and how these principles arise from fundamental uncertainties and the risk of irreversible environmental damage



  • Explain and present central economic theories and models of the economy-environment nexus in a clear language.
  • 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 the tools of graphical economic analysis to illustrate typical trade-offs in environmental and climate policy.



  • Carry out a criticial evaluation of the stengths and weaknesses of the theories and models.
  • 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 and complex issues of environmental and climate policy.

Lectures presenting the relevant theories and evidence.
An active dialogue between the teacher and students during the lectures will be strived for.

Students will be encouraged to work with exercises related to the lectures on a voluntary basis in groups or individually.

In case of a pandemic like Corona the teaching in this course may be changed to be taught either fully or partly online. For further information, see the course room on Absalon.

The main syllabus of the course consists of selected chapters from the textbook by Roger Perman, Yue Ma, Michael Common, David Maddison, and James Gilvray: Natural Resource and Environmental Economics, 4th edition, Addison Wesley, 2011 (ISBN: 978-0-321-41753-4).

In addition, a few journal articles will be included in the syllabus.


Before taking the course, it is recommended that students have obtained knowledge, skills, and competencies corresponding to those obtained by following the courses Micro I, Micro II, Macro I, Macro II, Mathematics A, and Mathematics B offered in the Bachelor Programme in the Department of Economics at the University of Copenhagen.

2 hours lectures 1 to 2 times a week from week 6 to 20 (except holidays).

The overall schema for the BA 3rd year and Master courses can be seen at KUnet:
MSc in Economics => "courses and teaching" => "Planning and overview" => "Your timetable"
BA i Økonomi/KA i Økonomi => "Kurser og undervisning" => "Planlægning og overblik" => "Dit skema"

Timetable and venue:
To see the time and location of lectures please press the link under "Timetable"/​"Se skema" at the right side of this page. F means Spring.

You can find the similar information in English at
-Select Department: “2200-Økonomisk Institut” (and wait for respond)
-Select Module:: “2200-F21; [Name of course]””
-Select Report Type: “List – Weekdays”
-Select Period: “Forår/Spring – Weeks 5-30”
Press: “ View Timetable”

Please be aware:
- That it is the students´s own responsibility to continuously update themselves about their studies, their teaching, their schedule, their exams etc. through the study pages, the course description, the Digital Exam portal, Absalon, KUnet, myUCPH app, the curriculum etc.



The lecturer gives oral feedback on questions raised by students during the lectures and during the lecturer’s designated office hours.

7,5 ECTS
Type of assessment
Written examination, 3 hours under invigilation
in the exam venues of the university.

The exam assignment is given in English and must be answered in English.

In the event that this summer's exams have to be conducted as online exams due to COVID-19, the exam form will be a 3 H take-home exam with aids. The reexam will be the same as the rescheduled ordinary exam, but possibly online orally if only few students register.
Without aids

for the written exam.


In case of an oral reexam, please go to the section "Reexam" for further information about allowed 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
  • Lectures
  • 42
  • Preparation
  • 161
  • Exam
  • 3
  • English
  • 206