EC240: Environmental Economics and Sustainable Development

Discover how economics is at the cutting-edge of dealing with some of the most pressing issues of our time. ‘Environmental Economics and Sustainable Development’ explores the critical intersection of environmental challenges and economic principles, tackling urgent global issues like climate change, resource management, and biodiversity loss.

Through the lens of microeconomic analysis, this course will look at why common misconceptions held by policy makers and environmentalists alike don’t hold up under rigorous economic scrutiny. For example, is the optimal level of environmental pollution really zero? And how close are we to running out of fossil fuels? At the same time, we’ll uncover why policy makers often fail to understand the fundamental drivers behind renewable resource extinction (particularly species and biodiversity loss), are over-optimistic when it comes to the environmental consequences of economic growth and insufficiently grasp the obstacles toward achieving strong multilateral agreements for solving international and global environmental problems.

By the end of this course, you’ll gain a solid foundation in environmental economics, equipping you with the tools to analyse sustainability policies and understand the economic forces driving environmental outcomes.

Whether you’re preparing for advanced undergraduate studies or graduate-level research, this course provides the essential knowledge to engage with one of the most pressing debates of our time.

Prerequisites: Introductory microeconomics (to the level of EC101: Introductory Microeconomics) and knowledge of very basic differential calculus in order to maximize or minimize a function.

Level: 200 level. Read more information on levels in our FAQs

Fees: Please see Fees and payments

Lectures: 36 hours

Classes: 18 hours

Assessment: Two written examinations

Typical credit: 3-4 credits (US) 7.5 ECTS points (EU)

Please note: Assessment is optional but may be required for credit by your home institution. Your home institution will be able to advise how you can meet their credit requirements. For more information on exams and credit, read Teaching and assessment

This course will suit you if you want to understand what drives the exploitation of natural resources and the pollution of the environment, including biodiversity loss and global warming. You should consider taking this course if you are interested in pursuing a career in government, non-governmental organisations, international organisations but also private businesses as all of these must engage with and tackle the enormous environmental issues of our times.

The course aims to provide students with a sound knowledge and understanding of environmental economics, sustainable development and the economics and politics behind the failure to keep climate change within the declared upper limit of 1.5 degrees Centigrade additional warming. Its intention is to deliver the fundamentals of rigorous economic analysis for continued undergraduate studies at a higher level, or graduate studies of environmental economics.

• To understand the root causes of environmental problems and develop economically efficient solutions for sustainability and resource management
• To be able to differentiate between renewable and non-renewable resource challenges (e.g., oil vs. fisheries) and recommend effective environmental policies for sustainable development
• To understand and be able to critique the monetary valuation of the environment
• Analyse international vs. domestic environmental issues, understanding why global environmental problems require complex economic and policy solutions. 
• Examine biodiversity loss, climate change and sustainable development as economic challenges, assessing the role and limitations of economics in addressing sustainability and climate policy.

The design of this course is guided by LSE faculty, as well as industry experts, who will share their experience and in-depth knowledge with you throughout the course.