Environmental Economics

Economics is playing an increasingly important role in the development and assessment of environmental policies and climate change in particular.

Environmental regulation, taxes, subsidies, market-based instruments such as cap and trade schemes and other policy ideas and designs are all amenable to economic analysis to provide insight into the likely winners and losers in the race to a low-carbon economy.

The Research

The research for Environmental Economics at the Smith School conducts research within the fields of low-carbon business and market economics, behavioural economics, climate change policy, energy policy, regulatory economics and integrated assessment modelling.

A key area of research is the relative role of governments and companies in solving environmental problems through supporting technological innovations and by using environmentally sustainable modes of production. A focus is on how firms can create wealth in the transition to a low-carbon economy.

World class experts

The presence at the Smith School of world experts who can examine these issues has already provided significant inputs into UK and international climate and energy policy making.

Leading economists involved in the Smith School include Professor Dieter Helm, Dr Cameron Hepburn, Dr Robert Metcalfe, Dr Bob Hahn, Dr David Anthoff, Dr Ken Richards and Professor Charles Mason.

Many of the economists at the Smith School are contributing authors to an issue of the Oxford Review of Economic Policy, published in March 2010, on “Environmental Policy, the State and the Market”. The issue comprises the following papers:

• Cameron Hepburn: The assessment: environmental policy, the state and the market
• Dieter Helm: Government failure, rent seeking, and capture: the design of climate change policy
• Robert Hahn and David Anthoff: Government failure and market failure: on the Inefficiencies of Environmental and Energy Policy
• Robert Stavins and Forest Reinhardt: Corporate social responsibility, business strategy and social welfare in the US
• Alex Bowen and Nicholas Stern: Environmental policy and the economic downturn
• Michael Hanemann: On the limits of government-constructed markets for addressing climate change
• Richard Newell: The role of markets and policies in delivering innovation for climate change mitigation
• Simon Dietz and Samuel Fankhauser: Environmental prices, uncertainty and policy reform