Environmental Economics

Carren Pindiriri

Course description


Environmental economics is a one-semester optional course designed for level II students in economics. It is concerned with the impact of the economy on the environment, the significance of the environment to the economy, and the appropriate way of regulating economic activity so that balance is achieved among environmental, economic, and social goals.

Qualifications and Goals


The aim of this course is to introduce students to the basic environmental economics issues, problems and policy analysis. By the end of the course students should be able to:

  • Understand the language of environmental economics

  • Use basic economic, quantitative and analytical tools to assess environmental problems, issues and/ or policies

  • To identify and assess (critically) the possible causal relationship between economic activities and environmental problems and be able to design and apply the most appropriate evaluation techniques

  • Diagnose potential problems encountered in formulating basic environmental policies and understand the common economic policy instruments used to correct these problems in market economies

  • Apply economic logic to environmental issues at scales ranging from individual users and development projects to national policies, and international agreements.

  • Have a basic understanding of the pertinent issues in international environmental regulation

  • Relate course material to “real life” Zimbabwean environmental situations

Course content


A. Basic Issues in Environmental Economics (Chapters 1 & 2 in T; Chapters 1, 2 & 3 in P)

  1. The scope and nature of environmental economics
  2. The basic pessimist and optimist models’ perspectives on sustainable development
  3. The economy and the environment
  4. Normative criteria for decision making – static and dynamic efficiency

B. Welfare Economics and the Environment (Chapters 3 & 4 in K; Chapter 5 in P)

  1. Objectives of the society
  2. Efficiency and resource allocation
  3. The two fundamental theorems of welfare economics

C. Property Rights, Externalities and Environmental Problems (Chapter 4 in T; Chapter 6 in P)

  1. Property rights
  2. Improperly designed property rights systems
  3. Externalities as a source of market failure
  4. Imperfect market structures – social vs. private optimum
  5. Divergence of social and private discount rates
  6. The role of government in achieving efficiency in the use of the environment
  7. Private resolution through negotiation – the Coase theorem

D. Evaluation of Environmental Goods (Chapter 3 in T; Chapter 11 in L; Chapter 14 in P)

  1. Benefit-cost analysis
  2. Cost effectiveness analysis
  3. Environmental impact assessment
  4. Measuring environmental costs and benefits
  5. Types of environmental values
  6. Use of welfare economics in evaluating environmental goods
  7. Valuation techniques – HPM, CVM and TCM
  8. Comparison of valuation methods

E. Economics of Pollution Control (Chapter 13 in T; Chapters 6& 7 in P)

  1. A pollutant taxonomy
  2. Defining the efficient allocation of pollution
  3. Market allocation of pollution
  4. Pollution and economic policy

F. Environmental Policy Instruments (Summary & Conclusions)

  1. Command and control approach
  2. Taxes and subsidies
  3. Tradable pollution permits
  4. Criteria for selecting policy instruments
  5. Examples of environmental policy instruments used in Zimbabwe

G.   The Global Climate Change Issue: Analysis and Policy

  1. Definition of climate change
  2. Climate change impacts
  3. Policy responses to climate change

Teaching-training activities

This is a one-semester course. The course will be taught on the basis of THREE lectures and ONE tutorial per week. Students are required to attend lectures and participate in at least one tutorial per week. Failure to comply with this requirement may result in the student being denied the opportunity to sit for the final exam.




The material covered in the course is dealt with in most standard environmental economics textbooks. You will need to have a textbook to refer to, since you will be expected to study some of the course material on your own.

(K) Kolstad, C.D. (2000) Environmental Economics, New York: Oxford University Press

(L) Lesser, J.A., Dodds, D.E. and R.O. Zerbe (Jnr) (1997) Environmental Economics and Policy, New York: Addison Wesley

(T) Tietenberg, T.H. (2001) Environmental Economics and Policy, 3rd Edition, New York: Addison Wesley Longman

(P) Perman R., Ma Y.,McGilvaray J. And Common M. (1999) Natural Resource And Environmental Economics, 2nd Edition, Great Britain: Henry Ling Ltd

(HSW )  Nick Hanley, Jason F Shogren and Ben White (2007), Environmental Economics in Theory and Practice. 2nd Edition. Palgrave Macmillan 

All these books cover the course material adequately and the choice between them is largely a question of which style appeals to you most (and availability too). If you cannot get the latest edition, earlier editions are adequate. In addition to these textbooks, it is important that you read the relevant sections of local newspapers so that you keep up with the developments in the Zimbabwean environmental debate.

Human and Physical Resources

Students should bring laptops when doing section D of the syllabus.

Methods of evaluation

Assessment will be based on: Coursework worth 25% of the total mark, consisting of a class assignment and 2 Tests. Assignment is due on 21 April 2017. Test 1 will be written on 12 April 2017 and test 2 will be written on 3 May 2017. The Final Examination is worth 75%.

Manager(s) for ECON213 : Carren Pindiriri
Administrator for TSIME Online : Administrator
Phone : 18008
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