040209 KU Environmental Economics (MA) (2023S)

Can an economy grow indefinitely even if its fossil energy resources are limited in supply? At the same time, if burning of fossil fuels causes climate change, how can we achieve growth and sustainable development? This course will shed light on answers to such questions through the lens of neoclassical growth models which include pollution dynamics and effects of climate change. We will start by learning and reviewing the dynamic optimization methods which is a standard technique for analyzing such models. We will proceed by introducing the standard growth and pollution model, i.e. the Dasgupta-Heal-Sollow-Stiglitz model, and subsequently look at different variants and extensions. We will examine the role of input substitution, technical change, and switch to renewables. We will also discuss policy implications and current developments in environmental regulation in various countries.