This course provides lectures of the theory and examples on how to calculate the environmental externalities of different energy options.
The environmental externality is a concept developed in the microeconomics theory, and it means the cost that is not included in the price of the product such as electricity in the market. The examples of the externalities of the different energy options are health impacts due to the air pollutions and environmental impacts due to the global warming caused by the carbon dioxide. The lectures and practical lessons will include the theoretical and mathematical models to calculate those externalities, and show the results of the precedent research projects in the US, the EU and in Ukraine. These issues are keys for formulating the framework of the country for its sustainable development.
The case discussions will follow the lectures, where all students are expected to make the contributions to the discussions and the presentations.
The lecture will be carried out in English.
Academic hour – 1 and 2: Different Energy Systems and Externalities
a. Different energy systems, emissions and impacts
b. Quantitative presentations of the impacts
c. Distinguishing externalities from the damages/impacts
d. Ways of internalizing externalities into the price mechanism
e. Example in Ukraine
f. Introduction to the methodology
Academic hour – 3 and 4: Externalities on Theory, Monetary Valuation Method
a. Microeconomics theory – Price theory
b. Demand and Supply
c. Reasons for Demand Shift and Supply Shift
d. Governmental Interventions to the Market
e. Monetary valuation of the damages
1) Damage based techniques
2) Control cost techniques
3) Contingency valuations
4) Willingness to Pay, an example in Ukraine
Academic hour – 5 and 6: Global Warming Effects
a. Basic approaches for estimating the global climate change impacts
b. Potential impacts of global warming
1) Response in vegetation
2) Increases in crops and forest growth associated with enhanced atmospheric CO2 concentration
3) Response of agriculture
4) Response of managed forest and grasslands
5) Response of water resources
6) Response of marine and coastal environment
7) Response of natural landscapes and ecosystems
8) Response to human health
c. Economic valuation of impacts of global climate change
d. Illustrative estimates of damages
e. Summary of estimates from several studies
f. Uncertainty in estimates
Academic hour – 7 and 8: Air Pollution Costs, Energy Security Cost
a. Emissions, Meteorology and Atmospheric Dispersion
b. Epidemiology and Dose-Effect Relation/coefficient
c. Health Impacts
d. Damage Costs
e. Energy Security Costs
1) Economic rent
2) Sudden changes in the price or availability of imported oil
Academic hour – 9 and 10: Examples of Externality Studies in the EU
a. Damage costs/externalities of different energy systems
3) Fossil fuel chains
4) Nuclear fuel cycle
5) Photo Voltaic Energy
6) Wind Energy
7) Biomass
b. Monetary Valuation in EU and in Ukraine
Examination
Language of the course — English.
Tutor of the course:
Prof. Y. Matsuki, Department of Mathematical Method for System Analysis, Institute for System Analysis, National Technical University of Ukraine “Kyiv Polytechnic Institute”