1. Course Project Tiago Domingos tdomingos@ist.utl.pt Tel: 21 841 91 63, Ext. 3163 Rui Mota rmota@ist.utl.pt Tel. 21 841 94 40, Ext. 3440 November 2011 Environmental Economics M.Sc. Environmental Engineering

2. General Aims of the Course Project Establish the connection between theory and practice Develop capacities for autonomous work Develop capacities for writing technical and scientific documents

3. Specific Aims of the Course Project Obtain and discuss –Estimates of economic benefits –Estimates of economic costs Discuss alternative policies to reach the social optimum –Command and control –Taxes/subsidies –Permits –Reference technologies Discuss the ethical implications of different policies

4. Case Study: The Cereal Steppe of Castro Verde Costs and benefits –Improve and update the calculation of the costs of soil erosion, in Marta- Pedroso et al. (2007a) –Analyse, interpret and use the Contingent Valuation Methods in Marta- Pedroso et al. (2007b) Build <n economic model of a Castro Verde farm, taking as source the sustainability reports on the Rural Value Project website: –http://projectos.lpn.pt/link.php?id_projecto=18&layout=1&lang=1&id=154 &id_sub=148http://projectos.lpn.pt/link.php?id_projecto=18&layout=1&lang=1&id=154 &id_sub=148 Discuss the economic and ethical impacts of different policies –Subsidies –Taxes –Technological standards For the different strategies, analyse qualitatively (or quantitavely, if possible): –Consumers surplus –Producer surplus –Government revenue raised –Net social benefit For this, you can take also as inspiration the Facebook game “Rural Value”

5. Additional Material on Managing Externalities Understand the social optimum based on pollution abatement –Pearce and Kerry Turner, Section 6.5 – Pollution Charges and Abatement Costs Understand private solution to the management of externalities –Pearce and Kerry Turner, Chapter 5 – The Market Achievement of Optimal Pollution

6. Ethical Discussion on Externalities Kant, Utilitarianism, Libertarianism, Rawls –Who should pay for pollution? –Which mechanisms should be applied? Sandel, What is Justice –Read chapters 2, 3, 5, 6 (available on the course website) –See the videos for chapters 1, 2, 3, 5, 6 on YouTube

7. Formalities The report should obey the submission rules for the journal Ecological Economics –Available on http://www.elsevier.com/wps/find/journaldescription.cws_ho me/503305/authorinstructions Deadline for the initial version (negotiable!) –2nd January Discussion of the initial version –3rd to 6th January Deadline for the final version –7th February