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Course, academic year 2023/2024
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Environmental Economics - JEM218
Title: Environmental Economics
Czech title: Environmental Economics
Guaranteed by: Institute of Economic Studies (23-IES)
Faculty: Faculty of Social Sciences
Actual: from 2023 to 2023
Semester: summer
E-Credits: 6
Examination process: summer s.:combined
Hours per week, examination: summer s.:2/0, Ex [HT]
Capacity: 185 / unknown (59)
Min. number of students: unlimited
4EU+: no
Virtual mobility / capacity: no
State of the course: taught
Language: English
Teaching methods: full-time
Teaching methods: full-time
Additional information:
Note: course can be enrolled in outside the study plan
enabled for web enrollment
priority enrollment if the course is part of the study plan
Guarantor: Mgr. Milan Ščasný, Ph.D.
Teacher(s): Diana Kmeťková, M.Sc.
Mgr. Vědunka Kopečná, Ph.D.
Mgr. Milan Ščasný, Ph.D.
Iñaki Alberto Veruete Villegas
Class: Courses for incoming students
Incompatibility : JEM115
Is incompatible with: JEM115
Annotation - Czech
Last update: PhDr. Petr Bednařík, Ph.D. (15.02.2020)
The course features a series of lectures on environmental economics, partly covering also energy economics, health economics and welfare measurement, all linked to environmental problems. The course provides students with the framework to understand the theory and methods of environmental economics, consumer behaviour and non-market valuation in particular.
Literature -
Last update: Diana Kmeťková, M.Sc. (22.02.2024)

Freeman III, AM, Herriges, JA, Kling, CL (2014), The Measurement of Environmental and Resource Values. Theory and Methods. Third Edition, Resource For Future & Taylor & Francis.

–       Read Chapter 3: Welfare Measures (pp. 40-80)

Parsons, G. R. (2003): The Travel Cost Method. In Champ, P. A., Boyle, K. J., Brown, T. C., (eds.) A Primer on Nonmarket Valuation. London: Kluwer Academic Publishers. ISBN 0-7923-6498-8.

Haab, T., McConnell, K. E. (2002), Valuing Environmental and Natural Resources: the econometrics of non-market valuation. Edward Elgar: Cheltenham. ISBN: 1-84376-388-5.

–       Chapter 2.2.1 Parametric Models for Dichotomous Choice Questions – The RUM (pp. 24-49)

–       Chapter 3 Distribution-Free Models for Contingent Valuation, Chapters 3.2, 3.4, 3.6 (pp. 59-83)

OECD (2001), Environmentally Related Taxes in OECD Countries: Issue and Strategies, Paris, pp. 21-31.

–       Chapter 1 A Brief Theory of Envi Related Taxation, pp. 21-31.

OECD (2001), Domestic Transferable Permits for Environmental Management. Design and Implementation.Paris,

–       Chapter 1 Origins, Aims and Approaches, pp. 11-21.

 Articles to read and present by students (in groups of three or four) - tba

Climate Change Economics

Nordhaus W (2017 PNAS) Revisiting the social cost of carbon, PNAS 114/7: 1518–1523.

Pindyck RS (2017) The Use and Misuse of Models for Climate Policy, Review of Environmental Economics and Policy, volume 11, issue 1, Winter 2017, pp. 100–114 doi:10.1093/reep/rew012

Tol RS (2018) The Economic Impacts of Climate Change, Review of Environmental Economics and Policy, volume 12, issue 1, Winter 2018, pp. 4–25 doi: 10.1093/reep/rex027


Hess, S., Train, K. (2017), Correlation and scale in mixed logit models, Journal of Choice Modelling 23:1–8.

Hole, AR, Kolstad, JR (2012), Mixed logit estimation of willingness to pay distributions: a comparison of models in preference and WTP space using data from a health-related choice experiment, Empir Econ 42:445–469.

Torres, C., Hanley, N., Riera, A. (2011), How wrong can you be? Implications of incorrect utility function specification for welfare measurement in choice experiments, Journal of Environmental Economics and Management 62(1): 111-121.

Requirements to the exam -
Last update: Diana Kmeťková, M.Sc. (22.02.2024)

(1) Final test (60 points)

(2) Group-reading and presenting a paper  (20 points) a group of 3-4 students will read one paper that will be provided to you at least 10 days before the lecture. You will have to summarize the key message of the paper within max 10 minutes during the lecture.

(3) Assignments (20 points) two home assignments on topics such as statistical decomposition, welfare calculation, stated preferences.

Maximum points: 100



91 and more           A

81 to 90                 B

71 to 80                 C

61 to 70                 D

51 to 60                 E

50 and less             Failed



Syllabus -
Last update: Diana Kmeťková, M.Sc. (22.02.2024)



Dr. Milan Ščasný; Charles University, Environment Center (José Martího 2/407, Prague 6) & Institute of Economic Studies, Fac Soc Sci

Teaching Assistants:

Diana Kmeťková, PhD candidate,

Inaki Alberto Veruete, PhD candidate, 


Structure of the course

1.    Intro to the Course & Air Quality Impact & Climate Change

Febr 22

(in #105)

2.    Environmental Regulation

Envi externality: definition & optimum; taxes, emission trading

Febr 29

3.    Climate Change Economics

Social Cost of Carbon; Integrated Assessment Models; Social Discount Rate; Equity

March 7

4.    Climate Change Economics II [Ščasný/Kmetkova]

GDP and Temperature: EKC on carbon emissions

Articles to be presented by the students

March 14

5.    European Green Deal, Fit for 55 and decarbonisation pathways

GHG-RES-EE targets; EU ETS, Energy system modelling, Cost of decarbonisation

March 21

Dean’s Day

March 28

6. Impact Analysis of Decarbonisation scenarios [Ščasný/Veruete]

Modelling approaches & tools: Env-extended Input-Output analysis; General-Equilibrium; Macro-econometric; Consumers demand and energy pricing

April 4 (in #105)

April 11

7. Welfare measurement + Stated preferences

Consumer demand theory: Marshallian vs Hicksian demand; Welfare Measures

Stated preferences: Theoretical validity; WTA v. WTP; Incentive compatibility, elicitation formats; Random Utility Model; (Non)-parametric WTP estimates


April 18


8. Discrete choice experiments

Designing choice experiment; Econometric modelling & preference heterogeneity (CL, MXL, Latent Class Logit, Hybrid Choice models)

Articles to be presented by the students

April 25

May 2

9.  Health risk valuation

Morbidity: household production function, Cost-Of-Illness, WTP

Premature mortality: QALY | LE; Value of a Statistical Life

May 9

10. Revealed preferences

Hedonic pricing (theory, hedonic price function, implicit price, econometrics)

Travel Cost Model (recreation demand, individual TCM, RUM; econometric issues)

May 16



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