Ecological and Environmental Economics

In recent years, economists have begun to move away from taking a cost-benefit-analysis approach to environmental decision-making toward an ecological approach focused on sustainability. Nevertheless, the profession is still divided on the best strategy to tackle today’s environmental and ecological challenges: climate change first and foremost, but also a wide variety of other issues, from air pollution to resource management and protection of biodiversity. Policymakers need to balance solutions to these problems with competing economic concerns such as housing, food provision, and the labor market. Starting Spring semester 2023, the Ecological and Environmental Economics course will allow students to explore these topics in depth; it aims to help students understand how economic theory unpins environmental and ecological decision-making worldwide. 

The course is taught by Professor Sofia Valeonti, who describes the class as solutions focused. “The way economists see climate issues is that if they are caused by human economic activity, then the solution can also come from economics,” she says. The course focuses on the history of the two opposing approaches outlined above: the environmental economics approach, which looks at market-driven mechanisms for regulating environmental concerns, such as the use of carbon credits to tackle carbon emissions, and ecological economics, which is concerned with restructuring economies and changing consumption patterns to achieve long-term sustainability. “Economists don’t really agree on the best solution,” explains Valeonti. “It's one of the reasons policy decisions can take a long time.” 

To help students develop an appreciation of these challenges, the class takes a theoretical approach that draws on both macro- and microeconomics while providing a historical overview of major international environmental policies. “Students study these debates in the context of political history,” says Valeonti, noting how case studies such as the Paris agreement put theory into practice. The course equips students with the tools they need to understand and apply theory to a wide range of situations. The analytical skills developed by students are then brought to bear during course assessment through essays and presentations as well as written examinations. 

For those majoring in economics or who are interested in economics as a discipline, exploring ecological and environmental perspectives within the field provides insight into the relevance of economic tools in resolving a wider range of problems, putting theory into practice on tangible real-world issues. For those hoping to work in environmental policy, green industries or activism, a deeper appreciation of economic approaches alongside a scientific understanding of climate change helps develop the kind of critical reasoning needed to propose solutions. “If you want to propose alternative policy, you need to understand how the field works and the theory behind policymaking in order to offer valid criticism of the status quo,” says Valeonti. 

Ecological and Environmental Economics is a core course for both the major in international economics and the minor in ecological and environmental economics. As an elective, it’s open to all students who wish to gain insight into the reasoning and historical context behind political decision-making to tackle environmental issues. “The environment is also a major issue in global governance and democracy,” says Valeonti. “But we need to be sure of the economic implications of the policy decisions that are made.”