Microeconomics and Environment

The first part of the course is designed to provide a rigorous introduction to the conceptual apparatus of modern microeconomics. Its objective is to equip first-year students with the basic analytical tools required to read and understand contemporary literature in theoretical and applied microeconomics and possibly to approach more advanced research topics in this area. The second part of the course applies the microeconomic approach to environmental problems. It covers environmental externalities and the theory of market failure. Students are introduced to the main environmental policy instruments, the management of renewable and non-renewable resources, and the challenges of valuing environmental resources. The course familiarizes students with selected applications in areas such as air pollution impacts and regulation, behavioral economics and pro-environmental behavior, and the relationship between economic development and the environment. 

By attending this course, the students: 1) will obtain a thorough knowledge of the foundations of modern microeconomic analysis; 2) will learn how to interpret and explain a number of economic phenomena central to contemporary market economies; 3) will acquire advanced skills enabling them to apply the relevant methodology, analytical tools, and theoretical apparatus of modern microeconomics to the solution of a number of economic problems (concerning consumers' and producers' choices, price formation, economic efficiency, and social welfare). By the end of the second part of the course are expected to 1) Develop a solid understanding of the underlying causes of environmental problems and the ability to propose and compare policy solutions; 2) Distinguish between the environmental challenges associated with non-renewable and renewable resources, and design appropriate policy responses; 3) Critically assess the methods used for the monetary valuation of environmental goods and services; 4) Understand the causes, consequences, and regulatory tools related to air pollution; 5) Explain the role of behavioral biases in shaping pro-environmental behavior and describe the use of nudges; 6) Describe the complexity of the relationship between economic development and environmental conservation.