Course on ENVIRONMENTAL RISKMANAGEMENT

developed by Dr. Elena Lazareva,

Professor at the Department of Economic Cybernetics

Overview

The course onEnvironmental RiskManagementis dedicated to the role of various environmental risk-management strategies including the key tools of environmental policy, cost-benefit analysis, financial and investment analysis, in the functioning of modern economic and financial institutions and their customers. The subject of the course is focused on the problems of theoretical foundation and practical applications of the environmental riskmanagement principles, covering a broad spectrum of optimal ecological costs models and «ecological» financial flows policyinstruments, primarily on how the environmental, health, safety and labor impacts of the economic and financial institutions’operations and investments can be incorporated in conventional business decision making. This reflects the growing expectation that companies, including financial service providers, should conduct their business and operations in accordance with sustainable development criteria. In the business context, this is often also referred to as “Corporate Responsibility”.

Environmental risk management can be defined as a special management system aimed to preserve the quality of the environment and to ensure regulatory and environmental parameters based on the concept of sustainable development. Practical implementation of thesustainable development principles is largely determined by the organization and development of production and environmental management systems and environmental management.

The overall objective is to increase the understanding of key concepts in environmental risk management, in order to enhance the capacity for rational and efficient environmental decision making in economic and financial institutions as well as in private industry and by other resource users.The purpose of this course is to give students an idea ofnatural resources and ecological processes ​ importance in the economic development. The course is also aimed to represent student’s theoretical foundations and laws of the EES development. It will give students possibility to realize user-specific tools and models in order to solve practical problems of strategic environmental management and environmental protection.

Learning Objectives:

  • study the economic aspect of society and natureinteraction, specificity, and the main elements of the EES;
  • review the concept of sustainable ecological and economic development, issues of ecological economics;
  • analysis of the problems associated with environmental change and the use of natural resources, tools and models for assessing the effectiveness of the involvement of natural resources in economic activities and environmental protection;
  • study the theoretical aspects of the implementation of environmental strategy and the economic mechanism of governance Natural Resources Exploration;
  • exploring the possibility of state regulation and market-based instruments for environmental management and rationalization of environmental use in the EES of different levels;
  • review the principles of assessing the effectiveness of the use of different ecological and economic models for decision making in environmental management and conservation.

Training and thematic plan

of the courseon Environmental RiskManagement

Total volume - 6 ECTS Credits

Name of themes and topics / The amount of hours / Classroom (hour) / Self study
Lectures / Practice
Моdule 1:The theoretical basisofEnvironmental Risk Management / 108 / 32 / 22 / 54
Theme 1:Environmental risk management and its role in sustainable developmenteconomics / 28 / 14 / - / 14
Theme 2:Analysis of the methodological principles, criteria and indicators of Environmental Risk Management / 28 / 8 / 6 / 14
Theme 3:Environmentalrisk: essence, mainfeaturesandvarieties / 28 / 4 / 10 / 14
Theme 4:Externalities effects and theoretical aspects of environmental strategies implementation / 24 / 6 / 6 / 12
Моdule 2:ImplementationmechanismsofEnvironmental Risk Management / 108 / 30 / 24 / 54
Theme 5:Environmental policy of the main market participants and market instruments of environmental risk management realization / 24 / 6 / 6 / 12
Theme 6:Environmental values / economic values of environmental risks as the environmental riskmanagement instruments / 24 / 6 / 6 / 12
Theme 7:Environmental values in bank’s crediting and investment/project analysis: World and European Banks’ experience / 24 / 6 / 6 / 12
Theme8:Environmental values in insurance companies’ functioning. Ecological insurance: new type of insurance in sustainable developmenteconomics / 20 / 6 / 4 / 10
Theme 9:Environmental risk management of economic and financial institutions and world economics’ future:solution strategies of global environmental problems / 16 / 6 / 2 / 8
Totally / 216 / 62 / 46 / 108

MONITORING SYSTEM

The final assessment of the course is determined by the results of monitoring on the basis of a rating system based on the outcome of the oral response classification, presented individually made reports on laboratory work, written essay, as well as active participation in lecture classes.

Grading students on the rating system is determined in accordance with Table 1

Table 1

Excellent / 90-100 points
good / 80-89 points
satisfactory / 65-79 points
unsatisfactory / less than 65 points

Determination of credit is made according to table 2

Table 2

1. Active participation in lectures and seminars (quality recording of lectures and practical training material) / Up to 20
2. The results of case studies in laboratory studies. / Up to 35
3. Essay / Up to 45

RECOMMENDEDEDUCATIONAL MATERIALS

Core Reading

  1. Ahmad, Y., S.El. Serafy and E. Lutz (eds). Environmental Accounting for Sustainable Development: A UNDP-World Bank Symposium, Washington, D.C.: World Bank.1999.
  2. Arntzen, J. and A. Gilbert. Natural resource accounting: state of the art and perspectives for the assessment of trends in sustainable development, in O. Kuik and H. Verbruggen (eds), In Search of Indicators of Sustainable Development, Dordrecht: Kluwer. 2001.
  3. Bartell S.M. Ecological/Environmental Risk Assessment // Risk Assessment and Management Handbook. New York, 2006.
  4. BeckU. Risk Society. Towards a New Modernity. London, 1992.
  5. Chicken J.C. Risk Handbook. London, 1996.
  6. Chicken J.C., Harbison S.A. Differences Between Industries in the Definition of Acceptable Risk // New Risks. New York, 1990. P.123–128.
  7. Cohen B.L. Catalog of Risks Extended and Updated // Health Physics. 2001. Vol. 61. P. 89–96.
  8. Сovello V.T. Communications Risk in Crisis and Noncrisis Situations // Risk Assessment and Management Handbook. For Environmental, Health, and Safety Professionals. New York, 1996. P. 45–65.
  9. Environmental Risk and Commercial Banks: Discussion Paper. UNEP. August 1994.
  10. Financing Change: The Financing Community, Eco-Efficiency and Sustainable Development. The MIT PRESS, London. 1996.
  11. Global Warming: Element of Risk // Swiss Re Special Report, Zurich, 2004.
  12. Greening Financial Markets. Ed. by Scott Vaurghan. Geneva. UNEP. 1995.
  13. Hallenbeck W.H. Quantitative Risk Assessment for Environmental and Occupational Health. Boca-Raton, 2003.
  14. Hanley N., Shogen J., White B. Environmental Economics in Theory and Practice. Macmillan Press LTD, London. 1997.
  15. Hanley, N. and C. Spash. Cost-Benefit Analysis and the Environment, Aldershot: Edward Elgar. 2003.
  16. Hartwick, J.M. Natural resources, national accounting and economic depreciation // Journal of Public Economics, 1990, 43, 219-304.
  17. Howarth, R.B. and R.B. Norgaard. Environmental valuation under sustainable development // American Economic Review, 2002, 82 (2), 473-7.
  18. Kasperson R.E., Renn O., Slovic P. et al. The Social Amplification of Risk: A Conceptual Framework // Risk Analysis. 2008. Vol. 8. N 2. P. 177–187.
  19. Kolluru R.V. Health Risk Assessment: Principles and Practices // Risk Assessment and Management Handbook. For Environmental, Health, and Safety Professionals. New York, 1996. P. 123–151.
  20. Lutz, E. Towards Improved Accounting for the Environment, Washington, D.C.: World Bank. 2003.
  21. Molak V. Introduction and Overview // Fundamentals of Risk Analysis and Risk Management. Boca Raton, 1997. P. 1–10.
  22. Preyssl C. The Evolution and Process of Risk Management at the European Apace Agency ESA // International Journal of Risk Assessment and Management. 2000. Vol 1. N 1/2. P. 80-89.
  23. Price Waterhouse Study Focuses on Environmental Practice // Environmental Manager, May? 2005.
  24. Repetto, R. How to account for environmental degradation // Forestry and the Environment: Economic Perspectives, Wallingford: CAB International. 1993.
  25. Smulders S.Entropy, Environment, and Endogenous Economic Growth // International Tax and Public Finance, 1995,2, 319-340.
  26. Turner, R.K. Sustainability: Principles and Practice, in R.K. Turner (ed.), Sustainable Environmental Economics and Management, London: Belhaven Press. 2003.
  27. Van Pelt, M.J.F. Ecologically sustainability: Principles and Practice, in R.K. Turner (ed.), Sustainable Environmental Economics and Management, London: Belhaven Press. 2003.
  28. Van Pelt, V.J.F. Ecologically sustainable development and project appraisal in developing countries // Ecological Economics, 1993, 7 (1), 19-42.
  29. William D. Evans, Jr. Juridical Relief from Superfund Claims: Some good News, Possibly Fleeting for Bankers // Banking Law Journal. Jan. – Feb. 2004.

Additional Reading

  1. Barro R.J., Sala-I-Martin X. Public Finance in Models of Economic Growth// The Review of Economic Studies. 1992. Vol. 59. № 4. P. 645-661.
  2. Baumol W.J., Oates W. The Theory of Environmental Policy: Externalities, Public Outlays and the Quality of Life. Prentice Hall, New Jersey. 1975.
  3. Bishop, R.C. Economic-efficiency, sustainability, and biodiversity, Ambio, 2003, 22 (2-3), 69-73.
  4. Ciriacy-Wantrup, S. Resource Conservation: Economics and Policy, Berkeley: University of California Press. 2002.
  5. Cohen B.L. The Nuclear Energy Option. An Alternative for the 90s. New York, 1990.
  6. Covello V.T., Sandman P.T., Slovic P. Guidelines for Communicating Information about Chemical Risks Effectively and Responsibly // Acceptable Evidence. Science and Values in Risk Management. New York, 1991. P. 66–90.
  7. Environmental Encyclopedia. Detroit, 1994.
  8. Kunreuther H., Slovic P. Science, Values, and Risk // Challenges in Risk Assessment and Management. Thousand Oaks; London, 1996. P. 116–125.
  9. Lewis H.W. Technological Risk. New York; London, 1990.
  10. Lindley D.V. Making Decisions. 2nd edition. London, 1985.
  11. Maslow A.H. The Farther Reaches of Human Nature. New York, 1971.
  1. Norgaard, R.B. Three dilemmas of environmental accounting // Ecological Economics, 1999, 1, 303-14.
  1. Ossenbruggen P.J. Fundamental Principles of Systems Analysis and Decision-Making. New York, 1994.
  2. Pearce, D.W., Barbier E. and Markandya A. Sustainable Development: Economics and Environment in the Third World, Aldershot: Edward Elgar. 1999.
  3. Rowe W.D. An Anatomy of Risk. Malabar, Florida, 1988.
  4. Schultz T.W. Investment in Human Capital: the Role of Education and Research. New York, 1971.
  5. Slovic P. Perceived Risk, Trust and Democracy // Risk Analysis. 1993. Vol. 13. N 6. P. 675–682.
  6. Tengs T.O., AdamsM.E., Pliskin J.S. et al. Five-Hundred Life-Saving Interventions and Their Cost-Effectiveness // Risk Analysis. 1995. Vol. 15

Internet Resources

2008 Environmental Performance Index (EPI). - Yale Centre for Environmental Law & Policy, Yale University; Centre for International Earth Science Information Network (CIESIN), Columbia University; Joint Research Centre of the European Comission, Ispra, Italy //

Andersson T., Schwaag-Serger S., Sorvik J.,Hansson E. The Cluster Policies Whitebook, IKED. 2004.

Dzuray E.J, Maranto A.R. Assessing the Status of Risk-Based Approaches for the Prioritization of Federal Environmental Spending // Federal Facilities Environmental J. 1999. N 5.

Goedkoop M. The Eco-indicator 95. Final Report. Utrecht, The Netherlands. 1995.

Goedkoop M., Spriensma R. The Eco-indicator 99. A damage oriented method for Life Cycle Impact Assessment. Methodology Report. Amersfoort, The Netherlands, 2000. <

1