Contents:
Sustainability challenges often require researchers and policy makers to make projections of the environmental and economic impact of policies before those policies are implemented. For example, what impacts on employment and income distribution can we expect from a tax on greenhouse gas emissions? How much will arable farmers earn in the coming decades on a warming planet? And how will liberalization of the international food market affect the environment? To make such projections we need to model the interaction between economic and natural systems. Policy advisors such as Wageningen Economic Research (WEcR), PBL Netherlands Environmental Assessment Agency (PBL), the Organisation for Economic Co-operation and Development (OECD), and the Food and Agricultural Organisation of the United Nations (FAO) use a range of economic models for this purpose. For example, WEcR uses MAGNET to study international climate issues and AGMEMOD to analyze the greening of the EU’s agricultural policies. Usually these are large numerical models, but their core principles are rooted in economic theory. In this course you learn how to apply this economic theory in small simplified numerical economic simulation models that can be used to make projections of sustainability challenges such as climate change and natural resource use.
This course is followed by students from various master programmes including the MSc programmes Economics of Sustainability (MMED), Environmental Sciences (MES), Climate Studies (MCL), Urban Environmental Management (MUE) and International Development Studies (MID). You learn from teaming up with students in other study programmes in social and environmental sciences to tackle modelling challenges. Models discussed include mathematical programming, partial equilibrium, input-output and applied general equilibrium models as well as neoclassical Ramsey growth models.
This course provides students the analytical insights and skills to develop and critically evaluate applied economic models and is an excellent preparation for writing an MSc-thesis. The course can be directly followed by a thesis with Environmental Economics and Natural Resources Group (ENR-80436) and Agricultural Economics and Rural Policy Group (AEP-80436).
Learning outcomes:
After successful completion of this course students are expected to be able to:
- explain the micro-economic theory underlying economic simulation models;
- create small economic simulation models using good modelling practices;
- assess the economic behaviour of a given model;
- assess the natural science elements of a given model;
- critically reflect on the potential uses and limitations of economic simulation models.
