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Policy instruments for sustainability in ecosystem services
Last Updated: 2026-02-05 15:14:44
Abstract
The course discusses the sources of market failure that lead to excessive environmental degradation and pollution from an environmental economics perspective and reviews policy approaches for addressing these. It then delves deeper into specific policy instruments applied to the themes of nature conservation/biodiversity.
Objective
The students understand the underlying sources of market failure that lead to suboptimal human decisions about resource use and pollution. They can define economic criteria of decision making. The students know the main policy approaches that can be used to address market failure and move towards more socially optimal outcomes. They also have a deeper understanding of new instruments and their comparative strengths and weaknesses in addressing problems in nature conservation. Finally, students have an improved understanding of the distributional impacts of alternative environmental policy approaches and the political economy underlying the making of environmental policy.
Content
Designing environmental policies to combat the excessive degradation of natural resources and pollution requires an understanding of the underlying sources of market failure that lead to suboptimal human decisions regarding resource use and environmental behaviour. Sources of market failure include, for example, the presence of externalities, improperly designed property rights systems (open access, public goods, lack of enforceability and transferability), divergence of private and social discount rates, and lack of information and knowledge. Understanding these sources of market failure helps to design policies for more sustainable outcomes. Policies include command-and-control, market-based instruments (for example, ecotaxes, tradeable permits, ecolabeling), and negotiation approaches (for example, voluntary agreements, payments for environmental services), and liability. The course combines the theoretical basis of environmental and resource economics with the applied discussion of recent trends in environmental policy making worldwide, with a focus on nature conservation, forest and landscape policy. Strength and weaknesses, preconditions, distributional effects and political economy of alternative instruments are analyzed and compared, drawing lessons on the context-dependent applicability of each policy instrument as well as synergies between instruments.
Resources
Lecture Notes
A script is not yet available.
Literature
Selected literature (preliminary) ·Tietenberg, T. (2006), ‘Environmental and Natural Resource Economics’, Addison-Wesley. ·Dente, B. (1995), ‘Environmental Policy in Search of New Instruments’, Kluwer. ·Baland , J.M., and Platteau, J.-P. 1996. Halting degradation of natural resources: is there a role for rural communities? Oxford: Claredon Press. ·Bulte, E., und S. Engel. “Conservation of Tropical Forests: Addressing Market Failure.” In Sustainable Development: New Options and Policies. López, R., Stiglitz, J., and M. Toman (Eds.). Oxford University Press, New York. http://www0.gsb.columbia.edu/ipd/pub/ConservationofTropicalForests11_29_04.pdf
General Information
- Language
- English
- Levels
- MSC , DR
- Frequency
- Yearly recurring
Examination
- Type
- graded semester performance
Course Components
| Type | Title | Time & Place | Hours |
|---|---|---|---|
| lecture with exercise | Policy instruments for sustainability in ecosystem services |
|
2 h weekly |