Course code Ekon5135

Credit points 2

Environmental Economics

Total Hours in Course80

Number of hours for lectures12

Number of hours for seminars and practical classes12

Independent study hours56

Date of course confirmation21.06.2018

Responsible UnitInstitute of Economics and Regional Development

Course developer

author Ekonomikas un reģionālās attīstības institūts

Kaspars Naglis-Liepa

Dr. oec.

Prior knowledge

Ekon5090, Microeconomics Analysis

Ekon5139, Economic Resources

Course abstract

The aim of the course is to promote the understanding of the scope, role and development of environmental anthropogenic effects. Within the course, students improve their knowledge on the role of the environment in the evolution of economic thought, which is the basis for the present dominant concept of sustainable development. Students are familiarised with the roles, gains and losses regarding services of ecosystems and the use of resources thereof. The course also includes the methods for assessing the environment as well as the principles of risk management. The knowledge acquired ensures the understanding of the course’s concluding topics that focus on integrated resource management, policy making and environmental development pathways.

Learning outcomes and their assessment

Students will be able to:
demonstrate the understanding of the consequences of interaction between the social and the ecological systems, Demonstrate the understanding of a taxonomy of resources, prerequisites and preconditions for the use of resources, differences in use between fossil resources and renewable sources. (Discussions in classes, seminārs) Demonstrate the understanding of the role of the environmental dimension in the evolution of economics, the basic theories of environmental economics and methods for assessment of ecosystem services. (Test 1) Demonstrate the understanding of the role of resources, prerequisites and preconditions for, constraints on and consequences of the use of resources, the most important findings of environmental economics with regard to efficient use of resources. (Test 2)
Discuss matters pertaining to environmental protection and economic development and come up with reasonable arguments. Participate in a discussion and reasonably defend the opinion. (Discussions in classes) Calculate fossil resource potential based on the reserves available and the pace of resource exhaustion. (Seminars) Define, describe and find a prudent solution to some problem pertaining to environmental protection or use of ecosystem services. Present the results of an independent assignment completed and of calculations. (Independent work)

Integrate the findings of environmental economics into the existing belief system and use them to come up with original solutions. (Discussions, tests) Assess the constraints of resource use, the costs and benefits in both private and public contexts. (Discussions, independent work)

Course Content(Calendar)

Lectures (12 hours)
1. Environmental and economic cultural dimensions and their interaction (1 hour);
2. Dynamics of natural and social systems. Principles, models and results of system interaction (1 hour);
3. Evaluation and use of ecosystem services. Human well-being and biodiversity. Ecosystem assessment methods (1 hour);
4. Economic approach of environmental analysis - property rights, public property, externalities. Compensation for externalities (1 hour);
5. Resource taxonomy and sustainability. Renewable and fossil resources. Characteristics of use and economic conditions. Renewable but exhaustive resources. Biocapacity and economic balance. Environmental pollution (1 hour);
6. Pollution control, limitation and compensation. Pollution taxonomy. Environmental taxes or investments. Cap and trade systems. MACC (1 hour);
7. Environmental risk management. Types and effects of environmental risks. Risk management levels, communication, use of GIS. Pollution collection and technologies. Waste management and reuse. Waste collection systems (1 hour);
8. Environmental change and corporate social responsibility. Corporate social responsibility in the context of business ethics, public relations, risk mitigation and value creation (1 hour);
9. Sustainable food production. Food quality and quantity. Conditions and certification of differential approach. Demand generation (1 hour);
10. Environmental policy, institutional organizations. Environmental policy guidelines, key policies - international agreements. Reasons for contradictions in national policies (1 hour);
11. Interaction of environment and city. The role of cities in environmental development. The role of the environment in the urban planning process. Trends and international agreements and practices (1 hour);
12. Environmental development directions, opportunities and forecasts. Development of anthropocene. Exposed, developed or sustainable land (1 hour).

Practical work (12 hours)
Practical works strengthen the knowledge acquired in theoretical classes and are closely related to them:
1. Formation of environmental economics ideas based on E.F. Schumacher "Small is Beautiful" (Green Thinking and Consumption), George-Rougen and Dalia ("Sustainability Approaches"), M. Greenstone and B. Cologne Jack "Envirodevonomics" (Interaction with the Development Economy), etc. (2 hours);
2. Analysis of market failures based on Coase theorem. Problem case analysis and decision making (1 hour);
3. The condition for the use of fossil resources. Stock levels and time of depletion. Decision making based on the Hotelling’s rule and real resource use strategies (2 hours);
4. Presents the calculated economic values of ecosystem services, using the value determination methods considered in the theoretical course (2 hours)
Seminar 5: Possibilities of resource use, value of resource use, non-use (group work and discussion) (1 hour);
Seminar 6: examples of extensions, evaluation, compensation possibilities (group work and discussion) (1 hour);
Workshop 7 Atropocene - leaving some land for children. Limited resources, behavior change, economic science development perspective (discussion with a guest - expert) (1 hour);

Seminar 8: regular presentations of works (analysis of the problem of environmental protection or use of ecosystem services) and discussion of conclusions (2 hours).

Requirements for awarding credit points

It is necessary to successfully write two tests on the topics acquired in the study course. Independently research and present a study on an environmental economic problem or innovation. The student must prepare and actively participate in seminar classes.

Description of the organization and tasks of students’ independent work

Analysis of the problem of using environmental or ecosystem services. The student must independently analyze a problem related to the environmental economy (according to previously known conditions) or its solution (innovation) and present the results to other students.

Criteria for Evaluating Learning Outcomes

Formal test with a mark - Cumulative score (100 %)
Test 1 - Interaction of the environmental and the social systems – 30%,
Test 2 - Prerequisites and preconditions for the use of fossil resources and renewable sources – 30%,
Independent work - Analysis of a problem pertaining to the use of environmental and ecological services -30%,
Preparation for and activity in seminars - Interaction of the environmental and the social systems; resource use strategies; prospects for mankind development – 10%.

A score of 100% is equal to a 10-point

Compulsory reading

1. Tietenberg T., Lewis L.(2012) Environmental & Natural Resource Economics. Ninth edition. Pearson. Pp. 666.
2. Kļaviņa M., Zaļoksnis J. redakcijā - autoru kolektīvs. (2016) Vide un ilgtspējīga attīstība. Rīga: LU akadēmiskais apgāds. 384 lpp.

3. Atstāja Dz., Dimante Dž., Brīvers I. u.c. (2011) Vide un ekonomika. Monogrāfija. Rīga, LU, 256 lpp.

Further reading

1. Blumbergas A. redakcijā - autoru kolektīvs. (2010) Sistēmdinamika vides inženierzinātņu studentiem. Rīga. RTU Vides aizsardzības un siltuma sistēmu institūts, 318 lpp
2. Pelše M., Naglis-Liepa K., Strīķis V., Leikučs J. (2012) Atjaunojamās enerģijas izmantošanas ekonomiskais izvērtējums ilgtspējīgas attīstības kontekstā. LLU, Jelgava. 85 lpp.
3. Līdzsvarota lauksaimniecība. (2015) zinātniski praktiskās konferences raksti. LLU. 240 lpp.
4. Leach M., Rockstrom J. (2013) Between Social and Planetary boundaries: navigating Path-ways in safe and just space for humanity. World Social Science Report 2013: Changing Global Environment. ISSC. UNESSCO. Pieejams:
5. Schumaher E.F. (1973) Small is Beautiful: Economics as if People Mattered. Harper Perennial. Pp. 352.
6. Kanemans D. (2012) Domā ātri, domā lēni. Rīga: Apgāds „Jumava”. 25 lpp.
7. Costanza R., (1997) The value of the world’s ecosystem services and natural capital. Nature. Vol. 387, pp.253.-260.
8. Arow K. (1995) Economic growth, carrying capacity, and the environment. Science. Vol.268, pp.520.-521.
9. Daly H.E. (1992) Allocation, distribution, and Scale: towards an economics that is efficient, just and sustainable. Ecological Economics. Vol. 6, pp. 185.-193.
10. Blumbergas A. redakcijā – autoru kolektīvs. (2016) Biotehonomika: mācību grāmata. Rīga: RTU. 338 lpp.

11. Therivel R., Wood G. (2018) Methods of Environmental and Social Impact Assessment. 4th ed. New York: Routledge. 724 p.


Compulsory course for ESAF academic master programme Economics