Environmental Economics

AEM 4510 - AEM 5510 - ECON 3865
Spring 2023

Course Info

Course Sections: AEM4510, AEM 5510, ECON 3865

Professor: Ivan Rudik (ir229)

Class time:

  • Section 001: Monday and Wednesday 1:00-2:15 in Caldwell 100

  • Section 002: Monday and Wednesday 2:45-4:00 in Caldwell 100

Professor office hours (both sections):

  • Tuesday 2:00-3:00 in Warren 462

TA office hours (both sections):

  • Virginia Callison (vwc28): Monday 4:15-5:15 in Warren 370

  • Mike Huang (jh2737): Friday 10:00-11:00 in Warren 370

  • Tianzi Liu (tl567): Thursday 5:30-6:30 in Warren 370

  • Toni Marcheva (asm395): Wednesday 10:00-11:00 in Warren 370


  • Markets and the Environment by Keohane and Olmstead is required.
  • Other readings will be from papers that are linked here, or freely available through the library or Google Scholar.
  • Causal Inference: The Mixtape by Cunningham is free and useful if you want more background on the econometric techniques used in the readings in second half of class, or if you think you might be interested in doing environmental economics research in the future.

Prerequisites: MATH 1110, and AEM 2600 or ECON 3030.

Course description: This class will focus on the role of the environment in the theory and practice of economics. It will make use of microeconomic analysis at the intermediate level and will incorporate real-world examples. It examines market failures, externalities, benefit-cost analysis, non-market valuation techniques, cost-effective policy instruments, financial instruments, and recent applied work on the economics of the environment.

Course requirements: Students are expected to prepare for class and complete all assignments.

Schedule, Readings, and Lecture Notes

The schedule, readings, and lecture notes are here. All listed readings are required and expected to be done prior to class.

Assignments and Due Dates

Info on assignments and grading are here. The actual assignments will be posted on Canvas.

Other things

Attendance: Class attendance is not explicitly required but highly recommended.

Grade appeals: If you wish to appeal your grade on an assignment you must bring it to my attention, in writing, within 24 hours of when the assignment is returned. Grades brought to my attention after this will not be eligible for a grade appeal. I reserve the right to regrade the entire assignment and the new grade - higher or lower - will be final.

Integrity of credit: I expect every student in this course to abide by the Cornell University Code of Academic Integrity. I strongly encourage collaboration in this course, but each student is responsible for making sure that she or he follows the rules laid out in this syllabus, and with those stated in the Code of Academic Integrity. Any student found to have violated the stated policies on an assignment will receive a zero on that assignment. Violations may result in failure of the course. The Code of Academic Integrity is available for review here: https://cuinfo.cornell.edu/aic.cfm.

Learning Outcomes: As a result of participating in class you will be able to:

  • Discuss the design and effect of environmental policy in theory and real-world practice
    • AEM 5510: Also discuss the consequences of environmental policy in second-best environments
  • Use survey and revealed preference methods to value the environment
  • Explain how financial instruments tell us information about the environment
    • AEM 5510: Also explain how green financial instruments work
  • Explain how economists measure the economic costs of environmental change

Students with Disabilities: Your access in this course is very important to me. In order to have adequate time to arrange your approved accommodation, you must request your accommodation letter no later than February 8. If you become registered with SDS after February 8, you must request your accommodation letter at least 7 days prior to the date of your exam. Once SDS approves your accommodation letter, it will be emailed to both you and me. For students with testing accommodations, this course is participating in the SDS Alternative Testing Program for the Spring 2023 semester. If you have an approved testing accommodation, you must request it for this course and complete an Exam Request Form for each exam in this course via the SDS student portal by February 8th. Failure to do so may result in the inability to use your accommodation.

Additionally, be aware of the following:

  • Students are expected to start their accommodated exam at the same time as the main exam. Students with extended time accommodations who have a course immediately following this class will be scheduled for 8 a.m. and/or 5 p.m. on the same day.
  • All exam logistics will be communicated to you from SDS (look out for emails from sds@accessiblelearning.mail.cornell.edu). Please note that confirmation about the exact time and room location for your accommodated exam will be communicated to you closer to the exam date (no later than 48 hours prior). Please do not contact me with questions about exam logistics, as I will not be able to answer them. All details are being managed by SDS; therefore, questions should be sent to sds-testing@cornell.edu.
  • Coordination of make-up exams (i.e., for students who have been granted prior permission by me to take the exam on a day other than the scheduled date of the main exam) will be handled by Virginia. The SDS Alternative Testing Program will not be involved in the logistics for any make-up exams. If you miss your scheduled accommodated exam, you should notify me, not SDS.

For students with other academic accommodations (not testing-related), please follow up with me to discuss the necessary logistics of your accommodation(s).