ENVS155: Urban & Environmental Economics Lecture Reviewre

Module Overview: ENVS155 Urban & Environmental Economics

  • Teaching Team: Prof Richard Dunning, Dr Alex Nurse, Dr Weikai Wang.

  • Learning Outcomes:

    • Basic knowledge of economic ideas and schools of thought.

    • Understanding of economic characteristics of land and environmental regulation.

    • Familiarity with economic reasoning for built and natural environments, relating to planning.

  • Module Format: Tuesdays 11am-1pm lectures, Walker Lecture Theatre. Reading week (Week 6).

  • Assessments:

    • Coursework (50%): Essay on home town's economy and planning for sustainability (1,500 words). Due: 30^{th} October 2025.

    • Exam (50%): 90-minute essay-style questions in January assessment window.

Economic Explanations & Lenses

  • Three Types of Economic Explanation:

    • Intuition: Logic expressed as text (common sense).

    • Graphical: Logic expressed as a graph.

    • Mathematical: Logic expressed in formulae, e.g., y = eta0 + eta1x1 + eta2D2 + eta3(D2 * x1) + eta4x3 + eta5D4 + eta6D5 + \varepsilon.

  • Three Approaches to Economics:

    • Subject: Study of the 'economy' (money, work, international trade, production, distribution, consumption).

    • Theoretical (Robbins, 1932): Study of human behavior as a relationship between ends and scarce means with alternative uses (e.g., rational choice).

    • Normative (Basden): Treating objects as resources with carefulness and frugality due to their limited nature.

  • Two Lenses of Economics:

    • Microeconomics: Focuses on individuals/businesses, supply and demand, responses to external factors.

    • Macroeconomics: Focuses on governments/areas (town, city, country), the whole economy, aggregate impacts of actors' responses.

Urban & Environmental Economics: Importance and Collision

  • Urban environments are crucial for human well-being, housing global populations, economic activity, and are major polluters.

  • Natural environments are vital for human life, provide supporting services, and increasingly intersect with urban life.

  • Global urbanization trends show increasing percentages of the world's population and economic activity concentrated in cities, which also significantly contribute to pollution.

  • Nature enhances health and well-being, offering biophysical ecosystem services like pollutant filtering and urban heat island reduction.

Planning, Markets, and Interventions

  • First Principles: Planning is an economic activity; understanding economics is crucial for managing built/natural environments.

  • Types of Economic Systems:

    • Traditional: Households decide production (e.g., farming).

    • Command: Government controls production.

    • Mixed: Combination of market and command features (e.g., most European countries).

    • Market: Free market decides production via supply and demand (e.g., USA).

  • Market Economic System: Production of goods/services directed by supply and demand, not central authority, based on voluntary exchange.

    • Supply: Quantity producers offer at a given price.

    • Demand: Quantity buyers want at a given price.

    • Market Equilibrium: Where supply and demand curves meet, ideally no disappointed buyers or sellers.

  • Market Failure: Occurs when the market inefficiently allocates scarce resources, leading to socially undesirable outcomes.

    • Negative Externality: Actions of one agency negatively impact others without compensation.

  • Planning Interventions: Planners intervene in markets related to:

    • Land (e.g., Green Belt).

    • Development (e.g., housing targets).

    • Transport & Transit (e.g., active travel routes, Ultra Low Emission Zones (ULEZs)).

    • Marine markets (e.g., protected areas).