Last modified: 22 Jul 2026 13:42
Producing and using energy is fundamentally bound up with environmental issues and challenges For example, climate change; oil spills, Acid Rain, environmental pollution and health in cities, bind the use (and misuse) of the natural environment with energy. In this module you will learn how institutions and structures affect the incentives for energy firms and consumers to damage the environment or otherwise, how to analyze the trade-offs between environmental damage and economic activity associated with the energy industry. How should governments response and what policies are likely be effective in context of environmental challenges such as Climate change? Can emissions trading and taxes help?
| Study Type | Postgraduate | Level | 5 |
|---|---|---|---|
| Term | First Term | Credit Points | 15 credits (7.5 ECTS credits) |
| Campus | Aberdeen | Sustained Study | No |
| Co-ordinators |
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This course introduces students to the interconnection of environmental economics and the energy industry. Studying this topic students will be able to understand and analyse how the energy industry is contributing on the environmental degradation as well as how policymakers’ decision to increase environmental protection shapes the industry.
The main course objectives are:
The specific topics covered in this course include:
Market failures
This part of the course will highlight environmental sector’s contribution on environmental degradation, and provide the theoretical background in understanding why the market can not correct for the inefficiencies caused by the energy sector. To do so you will be introduced to the welfare economics analysis and the concepts of efficiency and optimality. Furthermore, the reasons of why pure market economies do not deliver efficient outcomes will be analyzed examining the sources of market failure.
Environmental Pollution
This section deals with pollution targets and methods of attaining these targets. Specifically, in this section, you will learn how polluting emissions can be modelled as either flow or stock pollutants and then understand how we arrive at the efficient level of emissions, which form a part of the targets for pollution policy. Thereafter, you will learn about the various instruments available to control polluting emissions. These will include regulatory instruments as well incentive based instruments like carbon taxes and permits.
Valuation of Environmental Services
This section deals with the ways in which economists attach values to the unpriced services provided by the natural environment. Specifically, we understand why do we attempt to place a value on the environment and its associated services in the first place.
Environmental Cost-benefit analysis
This part of the course will introduce you to project appraisal wherein the valuation of environmental services features in the bigger picture of a cost benefit analysis.
| Assessment Type | Summative | Weighting | 15 | |
|---|---|---|---|---|
| Assessment Weeks | Feedback Weeks | |||
| Feedback |
2 x MCQ (7.5% each) |
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| Knowledge Level | Thinking Skill | Outcome |
|---|---|---|
| Conceptual | Analyse | Students should be able to apply economic theory to analyse polluting behaviour, externalities, and other sources of environmental degradation. |
| Conceptual | Analyse | Students should be able to analyse the application of cost–benefit analysis to environmental issues, including the assessment of societal willingness to pay for environmental protection. |
| Conceptual | Understand | Students should be able to understand the interconnections between environmental change, economic systems, and sustainable growth |
| Procedural | Evaluate | Students should be able to evaluate the effectiveness of environmental policies in promoting sustainable economic growth |
| Assessment Type | Summative | Weighting | 85 | |
|---|---|---|---|---|
| Assessment Weeks | Feedback Weeks | |||
| Feedback |
2500 to 3000 words written assessment (85%) |
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| Knowledge Level | Thinking Skill | Outcome |
|---|---|---|
| Conceptual | Analyse | Students should be able to apply economic theory to analyse polluting behaviour, externalities, and other sources of environmental degradation. |
| Conceptual | Analyse | Students should be able to analyse the application of cost–benefit analysis to environmental issues, including the assessment of societal willingness to pay for environmental protection. |
| Conceptual | Understand | Students should be able to understand the interconnections between environmental change, economic systems, and sustainable growth |
| Procedural | Evaluate | Students should be able to evaluate the effectiveness of environmental policies in promoting sustainable economic growth |
There are no assessments for this course.
| Assessment Type | Summative | Weighting | 100 | |
|---|---|---|---|---|
| Assessment Weeks | Feedback Weeks | |||
| Feedback |
3000-words written assessment (100%) |
|||
| Knowledge Level | Thinking Skill | Outcome |
|---|---|---|
|
|
||
| Knowledge Level | Thinking Skill | Outcome |
|---|---|---|
| Conceptual | Analyse | Students should be able to apply economic theory to analyse polluting behaviour, externalities, and other sources of environmental degradation. |
| Procedural | Evaluate | Students should be able to evaluate the effectiveness of environmental policies in promoting sustainable economic growth |
| Conceptual | Analyse | Students should be able to analyse the application of cost–benefit analysis to environmental issues, including the assessment of societal willingness to pay for environmental protection. |
| Conceptual | Understand | Students should be able to understand the interconnections between environmental change, economic systems, and sustainable growth |
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