2018 Environmental Economics

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Academic unit or major
Undergraduate major in Industrial Engineering and Economics
Munesue Yosuke  Masui Toshihiko  Kanamori Yuko 
Course component(s)
Day/Period(Room No.)
Tue1-2(W932)  Fri1-2(W932)  
Course number
Academic year
Offered quarter
Syllabus updated
Lecture notes updated
Language used
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Course description and aims

This course focuses on environmental issues from the point of view of economics, and covers fundamental theories and methods of environmental economics. Environmental issues such as global warming, deforestation, and air pollution arise from economic activities. In order to resolve these issues, effective environmental measures should be taken based on the understanding of source of trouble. The concept of environmental economics is essential for drawing up the measures. In addition, this course introduces recent topics related to environmental issues and environmental policies. This course facilitates students’ understanding of the concepts of environmental economics by introducing actual environmental policies applied to global and regional environmental issues.

Student learning outcomes

At the end of this course, students will be able to understand and explain:
1) The relationship between environmental issues and modern lifestyle based on large-scale production and consumption.
2) How economic mechanisms work and why they fail.
3) The differences between direct regulatory instruments and economic incentives in environmental policies.
4) The selection of effective policy instrument for resolving an environmental issue.
5) Theories and methods for environmental valuation.
6) Environmental issues and the implications for business.
7) Global environmental issues and international environmental policies from the point of view of sustainable development.


Recycling-based society, Global warming issue, Externality, Public goods, Direct regulatory instruments, Market failure, Environment tax, Subsidy, Coase theorem, Emissions trading, Environmental value, Sustainable development

Competencies that will be developed

Specialist skills Intercultural skills Communication skills Critical thinking skills Practical and/or problem-solving skills

Class flow

At the beginning of each class, students are given a basic explanation for required learning. Towards the end of class, students are given exercise problems related to the lecture given that day to solve.

Course schedule/Required learning

  Course schedule Required learning
Class 1 Introduction Economics and the environment
Class 2 Relationship between our way of life and the environment (1) Economic growth and the environment, Waste issue and the recycling-based society
Class 3 Relationship between our way of life and the environment (2) Global warming issue
Class 4 Environmental issues arising from economic systems (1) Externality and market failure, Utilization and management of common-pool resources
Class 5 Environmental issues arising from economic systems (2) Public goods and free rider
Class 6 Fundamental theories for environmental policies (1) Direct regulatory instruments and market mechanism, Environment tax and subsidy
Class 7 Fundamental theories for environmental policies (2) Coase theorem, Emissions trading
Class 8 Application to environmental policies (1) Selection of policy instrument, Waste policy
Class 9 Application to environmental policies (2) Paris Agreement, Kyoto Protocol, Strategy on climate change
Class 10 Theory and methods for environmental valuation (1) Environmental value, Revealed preference method
Class 11 Theory and methods for environmental valuation (2) Stated preference method, Cost and benefit analysis
Class 12 Business and the environment (1) Green action in business, Corporate social responsibility
Class 13 Business and the environment (2) Environmental risk, Biodiversity and ecosystem
Class 14 Environmental economics and global environmental issues (1) International trade and the environment, Environmental control and technology progress
Class 15 Environmental economics and global environmental issues (2) Sustainable development, Energy economy


Kuriyama, Koichi and Managi, Shunsuke. The Essentials of Environmental Economics, 3nd ed. Tokyo: Yuhikaku; ISBN 978-4-641-17724-6. (Japanese)

Reference books, course materials, etc.

Hibiki, Akira and Arimura, Toshihide. An Introduction to Environmental Economics. Chuokoron-Shinsha; ISBN-13: 978-4121016485. (Japanese)

Assessment criteria and methods

Students' knowledge about basic theories of Environmental Economics and their ability to apply them to environmental issues will be assessed.
Exercise problems 60%, reports 40%.

Related courses

  • Applied Microeconomics

Prerequisites (i.e., required knowledge, skills, courses, etc.)

No prerequisites.

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