In this lecture, students are presented with the main contemporary economic theories and facts related to environmental and natural resource issues. The first part relates to environmental economics and the issue of externalities. We explore what kinds of economic instruments the government could implement to address problems related to pollution. Then we broaden the scope to understand international cooperation between countries to address pollution that is not limited by borders (such as climate change, ozone depletion, and the destruction of biodiversity). We explain the main mechanisms that permit or prevent correcting these issues to achieve social efficiency. The second part focuses on natural resource economics, which is old as the field of economics itself. After defining key concepts such as efficiency and sustainability, we study the drivers of extraction and how we could incentivize agents to reach the "best" outcome for society. Within this framework, we distinguish between dynamic issues related to depletable resources (such as mining and oil) and renewable resources (such as fisheries and forests). Although both are natural resources, they do not share the same fundamental issues and responses. Even though all the environmental problems raised in this abstract might be overwhelming, the goal of this lecture is to provide up-to-date knowledge to solve them!
- Irakaslea: Alexandre Volle