Academic year
2019/2020 Syllabus of previous years
Official course title
Course code
EM1302 (AF:304628 AR:169597)
On campus classes
ECTS credits
Degree level
Master's Degree Programme (DM270)
Educational sector code
3rd Term
Course year
Go to Moodle page
This course analyses the role of government in modern societies, with a focus on the protection of the environment. The first part of the course reviews the concepts of efficiency and equity and analyses the theoretical conditions under which markets are efficient. Then we move away from this benchmark and analyse the various causes of market inefficiencies and market failures and discuss if and when there can be a role for state intervention. In the second part of the course we will see how concepts studied in the first part will help us understanding the current debate on environment and pollution. We will then stress the specifics of the environmental issue stressing its global nature and the challenges associated in designing a global solution.
Students should be familiar with basic economic concepts, such as: supply & demand functions, consumers' surplus, opportunity cost, marginal analysis, and time discounting. It may be helpful to review a microeconomics textbook such as Intermediate Microeconomics: A Modern Approach, Hal R. Varian.
We will cover selected topics from those below.

• Brief historical perspective on the role of government and its market intervention.
• Review of basic economic principle and assumptions.
• Market analysis under the assumptions that guarantee market efficiency.
• Welfare theorems and market efficiency.
• Understanding market failures and scope for market/institutional design:
• Failure of competition.
• Moral hazard and adverse selection.
• Incomplete information.
• Externalities.
• Free riding of public goods.
• Incomplete Markets.
• Social insurance: Moral hazard and adverse selection.
• Public mechanisms for allocating resources.
• The environment: a global problem requiring a global solution and coordination.
Most of the topics in the course are covered by Economics of the Public Sector, Norton, by Joseph E Stiglitz, which is the suggested reference. An alternative text is Public Finance, Global Edition, by Harvey Rosen and Ted Gayer. The part focusing on the environment as a global problem follows the discussions that can be found in Global Carbon Pricing—The Path to Climate Cooperation (edited by David JC MacKay, Axel Ockenfels and Steven Stoft), MIT Press, 2017. We may also review readings from Stavins, R. N., ed. Economics of the Environment: Selected Readings, Sixth Edition. New York, New York: W. W. Norton & Company, 2012.
The course will be examined by a two-hour written examination at the end of the module. The exam includes a) open questions requiring short, specific answers and/or multiple choices; b) more complex open questions, requiring a longer and more structured answer; and c) classical exercises/problem solving.

Students have the opportunity to give a short presentation based on a pre-assigned readings. Sign-up sheet for presentation groups and topics will be available via Moodle. Each presentation should last 25 minutes (max) and include 10 slides (max). The presentation is worth a maximum of 4 points of the total module mark (out of 30).
Lectures and students' presentations.

This subject deals with topics related to the macro-area "Climate change and energy" and contributes to the achievement of one or more goals of U. N. Agenda for Sustainable Development

Definitive programme.
Last update of the programme: 27/01/2020