Notes on Environmental Economics

Introduction

  • Opening statement emphasizing the importance of balancing the economy and the environment:

    • "IF YOUTHINK THE ECONOMY IS MORE IMPORTANT THAN THE ENVIRONMENT, TRY HOLDING UR BREATH. WHILE COUNTING YOUR MONEY."

Course Overview

Course Title

  • Ekonómia životného prostredia (Environmental Economics)

Lecture Date

  • 1st Lecture on September 17, 2025

Class Content Breakdown

  1. Teaching methods and conditions for earning credits

  2. What do we already know and what do we still need to learn about Environmental Economics? Quiz

  3. Preliminary Questions before starting with Environmental Economics

  4. Why is Environmental Economics necessary?

  5. Introduction to the topic - Presentation of themes and syllabus

Teaching Methods and Assessment

Evaluation Criteria

  • Breakdown of grading:

    • 10% for ongoing written assignments during classes

    • 30% for the semester paper

    • 60% for the written exam

    • Total: 60 points

    • A minimum of 30 points is required to pass

Exam Format

  • The exam will consist only of material covered in lectures.

  • Lecture presentations will be available on MS TEAMS (note-taking advised).

  • A minimum of 50% is required from both the exam and seminars to pass.

  • Details about seminars will be discussed in the first seminar.

Knowledge Check

Quiz

  • Discussion on existing knowledge and gaps in the field of Environmental Economics.

  • Available in MS TEAMS.

Preliminary Thoughts on Environmental Economics

  • Initial thoughts about the significance and implications of Environmental Economics.

  • Questions presented:

    • What do the following illustrations mean?

    • What were we trying to convey?

Economic Principles

Economy versus Environment

  • Economics and the Environment are not separate entities; they function together.

  • Changes in the economy drive changes in the environment, and vice versa.

  • No economic decision can be made without affecting the environment; no environmental change occurs without economic impact.

  • Economics is not just about the flow of money; it is concerned with welfare and how it is measured.

Definition of Environmental Economics

  • Environmental Economics analyzes the relationships between human activity and the environment, treating the environment as an asset.

  • It focuses on the efficient utilization of natural resources and examines the impacts of economic activities on the natural environment.

  • Also includes regulatory tools for the environment, including legal and economic instruments (taxes, fees, subsidies) and addressing negative impacts on the environment.

Historical Context of Environmental Economics

  • Environmental Economics began in the 1960s.

  • Initiated the first wave of modern "green" thinking.

  • It is a branch of economics based on the idea that the economic system cannot function without an ecological system, ensuring the supply of goods and services.

Open System Perspective

  • Views the economy as an open system. The more resources an economy consumes from the environment, the more waste it returns to it.

  • This balance of material flow in economics is foundational for environmental economic analysis, termed the material balance model.

Environmental Limits and Economic Scarcity

Concepts Concerning Limits

  • The concept of limits originates from economists such as Malthus (1798), Ricardo (1817), and Marx (1867). Malthus posited that the economy's progress would lead to population growing faster than the means of sustenance.

  • Other models include Harrod's and Domar's models, neoclassical economic growth models, Schumpeter's growth model, and structural models of economic growth.

Political and Economic Systems

Interactions among Systems

  • Illustration depicting the interrelationships between political, economic, and ecological systems, highlighting:

    • Economic policy influencing the environment through mechanisms such as bureaucracy, state inputs, and outputs.

    • The roles of private enterprises and interest groups in shaping perceptions and resource usage.

Graduate Profile and Educational Objectives

Graduate Skills

  • Graduates will be able to work with relevant sources to formulate, implement, and assess complex problem-solving strategies.

  • The study program also develops managerial skills, critical thinking, the ability to compare alternatives, and implement public policy measures.

  • Graduates are expected to create and lead teams, facilitate constructive dialogues among stakeholders, and find compromise solutions.

Core Educational Goals

  • Graduates are expected to autonomously integrate and apply their knowledge in a broad multidimensional context, considering social principles and ethical frameworks.

  • The goal of the engineering study program is to produce graduates capable of seeking innovative solutions in public policy creation, requiring complex and specialized knowledge from varied fields.

What does Environmental Economics Study?

  • Defines relationships between economic activities and environmental impacts.

  • Investigates the environment as a valuable resource that needs protection and effective utilization.

  • Studies efficiency criteria in resource usage, analyzing the impacts of economic activities on natural and social aspects of the environment.

  • Explores pollution sources and consequences from economic, ecological, and health perspectives.

  • Evaluates regulatory economic instruments, such as financial assistance, environmental loans, taxes, fees, and pollution rights markets.

  • Assesses the role of the state in regulating and protecting the environment.

Course Information Document

Institution Details

  • University: Ekonomická univerzita v Bratislave (University of Economics in Bratislava)

  • Faculty: Národohospodárska fakulta (Faculty of National Economy)

  • Course Code: KVSARR NHF/NNG21209/21

  • Course Title: Ekonómia životného prostredia (Environmental Economics)

Educational Methods and Structure

  • Type of instruction: Lectures / Exercises

  • Recommended weekly study: 2 hours lecture and 2 hours exercises, totaling 26 hours over the course.

  • Study Method: In-person attendance required.

  • Credits: 6

  • Recommended study semester: 1st, 3rd

  • Level of Study: II.

Course Syllabus Outline

  1. Introduction, Assessment Methods, Theoretical Foundations, and Definitions of Key Terms

  2. Renewable and Non-Renewable Resources, Effective and Optimal Utilization of Natural Resources

  3. Market Functioning and Failures, Causes of State Intervention and Failures in Environmental Policy

  4. Approaches to Solving Market Failures and Externalities

  5. Decision-Making and the Environment, Cost-Benefit Principle, Measurement of Environmental Values

  6. Environmental Policy Tools and Criteria for Their Selection

  7. EU Environmental Policy: Principles, Goals, Institutions, Legal Framework

  8. EU Environmental Policy Action Programs

  9. Global Environmental Issues and EU Responses

  10. Current State of the Environment in Slovakia

  11. Environmental Regionalization of Slovakia

  12. Local Government and its Competencies in Environmental Issues

  13. Approaches to Solving Environmental Problems, Nature Protection, Individual and Societal Options

References

  • Turner Kerry R., Pearce D., Bateman I. (2002). Ekonómia životného prostredia: Úvod do problematiky. Bratislava: Ekonomická univerzita v Bratislave, 257 pages. ISBN 80-224-1663-5.

  • Perman R. et al. (2011). Natural Resource and Environmental Economics. Strathclyde: Prentice Hall, London. ISBN 9780321417534.

  • Šimíčková M., Drastichová M. (2013). Ekonomie udržitelnosti – alternativní přístupy a perspektivy. VŠB Ostrava, ISBN 978-80-248-3286-9, pages 137-166.

Environmental Policy in the EU

  • Gasperová J. (2013). Stratégia environmentálnej politiky. [online]. Available at: http://www.sszp.eu/wp-content/uploads/2013conferenceGERp- 162Gasperova.pdf

  • Klinda J. (2014). Orientácia, zásady, priority a hlavné úlohy starostlivosti o životné prostredie SR na roky 2014-2020. [online]. Available at: http://www.enviromagazin.sk/enviro2013/enviro5/07_orientacia.pdf

  • Európska komisia. Udržateľný rast – konkurencieschopnejšie hospodárstvo, ktoré efektívnejšie využíva zdroje a je šetrnejšie k životnému prostrediu. [online]. Available at: http://ec.europa.eu/europe2020/europe-2020-in-a-nutshell/priorities/sustainable-growth/index_sk.htm

Next Lecture

  • Topics: Renewable and Non-Renewable Resources, Effective and Optimal Utilization of Natural Resources