Seminar: Environmental Cost-benefit Analysis (F)

How should decision-makers (e.g., governments or financial investors) decide between potential projects and policies? Answering this poses many challenges, not least for many environmental projects and policies. Such projects and policies may have effects on goods and services that are not traded in the market, adverse distributional effects, and inherent risks and uncertainties. Parallel to this are the challenges of financing sustainable growth.

This course introduces students to the general method and use of cost-benefit analysis. There will be particular emphasis on applications to resource and environmental economics. The course therefore deals with many crucial aspects of environmental cost-benefit analysis.

The goal to equip students with the necessary background to assess the validity of practical environmental cost-benefit analyses, as well as to formulate how current guidelines can be improved based on the latest economic research.

The course will consist of a lecture block that provides an overview and introduces students to key concepts.

Examples of topics students may work on:

• Revealed preferences methods for valuing non-market goods
• Contingent valuation method for valuing non-market goods
• Value or benefit transfer
• Distributional issues in cost-benefit analysis
• Discounting approaches and reasonable values
• Discounting and inequality
• Discounting under uncertainty
• Discounting of scarce non-market goods
• Applications to climate change
• Other applications