ENE436 Environmental Policy Analysis

Spring 2025

Topics

The objective of this course is to equip students with the theoretical knowledge and empirical tools necessary to evaluate environmental policies. The course addresses key questions, such as: What are today’s major environmental problems? Why do these problems require government intervention, and what policy instruments are available to address them? How can we evaluate the effectiveness of environmental regulations, and how can we measure their benefits and costs? How can environmental justice considerations be incorporated?

The first part of the course outlines the economic theory of environmental policy and examines the characteristics of different policy instruments (e.g., taxes, emission permits, standards). It also introduces the concept of cost-benefit analysis and methods for measuring the demand for environmental goods. These theories, concepts, and methods are illustrated with practical examples.

The second part covers empirical tools for environmental policy analysis. It focuses on the application of econometric techniques to assess the effectiveness of environmental regulations and to quantify their costs and benefits. Students will learn to use these techniques through hands-on computer exercises with real-world data. In addition, students will become familiar with spatial data analysis and relevant data sources.
Learning outcome
Knowledge

Upon completion of the course, the student can:
- Describe and analyze environmental problems, such as air pollution and climate change, and propose policy solutions to address these problems.
- Explain and compare the functioning principles of different environmental policy instruments.
- Define the concept of cost-benefit analysis in the context of environmental policies.
- Understand the economic theory behind the most common environmental valuation methods and discuss their strengths and weaknesses.
Skills

Upon completion of the course, the student can:
- Evaluate the feasibility and effectiveness of different environmental policy instruments through theoretical and data-based analysis.
- Identify and apply methods to estimate the economic value of environmental goods.
- Prepare, visualize, and analyze spatial data related to environmental problems and policies.
- Interpret the results of econometric analyses of environmental problems and policies.
Competence

Upon completion of the course, students will:
- Work effectively as a team member to answer environmental policy questions.
- Derive policy recommendations and effectively communicate them to decision-makers and the public.
Teaching

Lectures, lab sessions, and students’ presentations.
Required prerequisites

Basic understanding of microeconomic principles. Familiarity with linear regression at the level of ECN402 (or equivalent). Basic proficiency in statistical software like R.
Compulsory Activity

None.
Assessment
The final grade will be based on two components:
1. Group project (50%): A written term paper (approx. 4-5 pages) including an oral presentation (approx. 15 minutes) to be completed individually or in pairs.
2. Exam (50%): Individual digital school exam (3 hours).
The term paper and exam must be written in English. The term paper must be submitted in the last week of the teaching term (before the exam weeks).
Grading Scale

A-F.
Computer tools

R/RStudio (or equivalent statistical software)
Literature

Selected chapters from textbooks and papers from academic journals will be distributed on Canvas/Legato.
Permitted Support Material

One bilingual dictionary (Category I)

Calculator

All in accordance with Supplementary provisions to the Regulations for Full-time Study Programmes at the Norwegian School of Economics Ch.4 Permitted support material https://www.nhh.no/en/for-students/regulations/https://www.nhh.no/en/for-students/regulations/ and https://www.nhh.no/en/for-students/examinations/examination-support-materials/https://www.nhh.no/en/for-students/examinations/examination-support-materials/