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Climate change, deforestation, pollution, recycling policies and traffic congestion charging are all issues at the top of the environmental debate today. An understanding of how economic activities and policies affect the environment is crucial for designing policy solutions to tackle contemporary environmental problems.

Dr Stefania Lovo’s research involves application of economic concepts and quantitative methods to the analysis and appraisal of environmental issues and policies. She is particularly interested in matters related to impact analysis of environmental policies, pollution and health, climate change mitigation and adaptation strategies and how environmental policies impact on firm location, international trade and firm performance. 

Stefania, who teaches on both undergraduate and postgraduate programmes in the Department of Economics, is passionate about her subject. 

“The central questions in environmental economics are concerned with the tradeoff between development priorities and environmental sustainability. Some countries are poor and in need of industrial growth. Can economic tools and arguments be used to reach a compromise between industrialisation and environmental conservation?" 

Stefania is currently involved in some critical research work in the areas of environmental regulation and corruption, the impact of dumping sites in Africa on children's health and the effects of changes in energy prices on firm performance.

The research Stefania undertakes constantly feeds into the curriculum development and into her teaching in the Department of Economics. 

“I teach the Economics of Climate Change module to first-year undergraduate students. Owing to the intense political debate around the topic, the content of the module is updated every year. This year I plan to incorporate the findings of my research on climate change adaptation and tenure insecurity in Malawi. This will show students how institutional constraints can affect the adaptive capacity of poor farmers in developing countries.â€� 

One of the modules Stefania teaches is Climate Change and Economic Policies for master's students. Her students benefit from her expertise as a former senior expert in environmental analysis for the European Commission. Working on the sustainability impact assessment of EU trade agreements, Stefania had the opportunity to assess the EU- Japan trade agreement. This was the first agreement to incorporate a sustainable development chapter which means the two countries, commit to trade and benefit from trade, but subject to them achieving their commitments in the Paris Agreement. 

“I have shown students how European institutions take into consideration environmental impacts and how international commitments to reduce greenhouse emissions can be strengthened by incorporating climate change related clauses into free trade agreements.�

As part of the assignment for the module 'Introductory Quantitative Methods in Economics and Business', Stefania has introduced the use of enterprise survey data, which she has extensively used for her own research. Students are required to replicate the findings of research papers by using simple statistics they have learnt about in the module. 

For instance, she has worked on a paper that compares how firms grow over time in different countries. In the USA, a firm that is 40 years old is typically four times larger than a younger firm, but the growth rate is much slower in the case of developing countries such as India. 

Stefania asks her students to choose a country of their choice and compute measures of growth using simple statistics and her research survey data. She then asks them to compare the results with the outcomes in her paper. For example they might look for any growth constraints noticed, such as lack of property rights, financial constraints, lack of skilled employees or any other institutional blocks. 

“In this way I try to link the content of the module which is about simple statistical testing with some advanced economic reasoning, guided by academic papers."