Our research in Environmental and Resource Economics covers a wide variety of topics such as fishery, forestry, agriculture, biodiversity and climate change.

The methods we use include among others optimization, valuation, econometrics and game theory.

Environmental and Resource Economics studies the interaction of society and environment, environmental issues and problems, and nature conservation by applying economic theory and methods. The scope of environmental and resource economics includes both positive and normative analysis. The positive analysis studies how economic actions affect natural resources and environment, while the normative analysis studies the preferred environmental behavior of the society, and how it compares to the behavior in the markets. The goal is to find ways to fix market failures so that natural resources are utilized sustainably, while preventing the degradation of nature. The theory and empirical applications of environmental and resource economics are based on the general economic theory, especially microeconomic theory, public economic theory and capital theory, in addition to methods of empirical research.

Our current research themes and the projects in which we collaborate are listed below. Projects are placed under the theme which they mostly relate to.


Biodiversity degrades at an alarming rate, both globally and in Finland. Habitat loss due to land use change is the most significant threat for biodiversity. Ecological compensation (also called biodiversity offsets) is a mechanism where biodiversity losses caused by human activity are compensated for. Compensatory measures can include restoring degraded habitats, and, in some cases, preserving existing valuable ecosystems. Ecological compensation resembles the ‘polluter pays’ principle, as the party responsible compensates the damage caused. The Habitat Bank is a research consortium analysing and developing the principles of ecological compensation and piloting compensations in practice. The team aims to provide science-based understanding and guidelines for a new market-based mechanism for biodiversity conservation in Finland, to complement the existing policy instrument mix. The consortium has grown from the Biodiversity Now! team, an awardee of the Helsinki Challenge science-based competition. The interdisciplinary team consists of researchers from University of Helsinki and Finnish Environment Institute (SYKE). The Habitat Bank collaborates with University of Jyväskylä, University of Lapland, Metsähallitus and many stakeholders from business, administration and NGO’s.

Persons working with this theme: Markku Ollikainen, Anna-Kaisa Kosenius, Johanna Kangas


The bioeconomy research group studies bioeconomy policies and is focused on forest industry. Bioeconomy policies targeted to forest industry are examined in ORBIT project, which is a joint project with Lappeenranta University of Technology (LUT).

Persons working with this theme: Markku Ollikainen, Jenni Miettinen

Choice analysis and valuation

Choice analysis & valuation (Cava) group applies choice models and economic valuation methods to environmental and resource issues. Examples include forest recreation, recreational fishing, benefits of water basin management, aquatic ecosystem services, and wetland benefits.

Persons working with this theme: Anna-Kaisa Kosenius, Fredrik Salenius

Climate policies

The climate policies research group examines topics in climate mitigation policies in various sectors. Performance of the European Union Emissions Trading Scheme (EU ETS) has been and will be a subject of various studies. We also examine cost-effective climate policies in agriculture and its coherence with water policies. A new topic is forest bioeconomy and climate-smart forest management. Much of the work of this group is related to the work of the Finnish Climate Change Panel. We focus especially on non-EU ETS and LULUCF sectors, EU’s burden sharing and emission reduction goals for 2030 and beyond. The group contributes to Keiju project by examining the role of flexible mechanisms for the Finnish climate policies. Our collaborators in this project are VTT, Finnish Environment Institute (Syke) and Natural Resources Institute (Luke).

Persons working with this theme: Markku Ollikainen, Sanna Lötjönen, Jenni Miettinen, Sally Weaver

Economic-ecological optimization

Our research integrates economics, ecology and mathematical methods to understand the management of biological natural resources like forests or any natural populations. This has created a dialogue between existing scientific traditions and new discoveries realized by transferring knowledge between different fields. In proceeding toward new directions we are guided by cross-disciplinarity and the requirements of sound theoretical basis, mathematics, detailed empirical realism and computational methods. This enables harsh progressive and critical reflection of existing science, policy and practice.

Persons working with this theme: Olli Tahvonen, Antti Pekkarinen, Sampo Pihlainen, Aino Assmuth, Vesa-Pekka Parkatti, Nico Österberg, Samuli Korhonen

Economic-ecological optimization group's profile in the University of Helsinki research portal

Economic-ecological optimization group's website

Economics of aquatic ecosystems

The group studies the drivers and the policy instruments that drive utilization and protection of aquatic environments and resources. The topics include optimal harvesting of fish stocks, cost-benefit analysis of marine protection, best practices to control invasive species and to control of oil damages. Econometrics, mathematical programming, game theory and integrated assessment models are the applied research tools.

Persons working with this theme: Kari Hyytiäinen, Marko Lindroos, Sampo Pihlainen, Maija Holma, Tin-Yu Lai, Matti Sihvonen, Essi Heikkinen

Economics of Aquatic Ecosystems group's profile in the University of Helsinki research portal

Economics of water protection

Water protection policies group studies the use of socially optimal measures and policy instruments for water protection in different sectors. We examine both nonpoint source loads from agriculture and forestry, and loads from point sources, especially, from waste water treatment facilities in the Baltic Sea region. Our studies cover topics such as abatement of nutrient loads in waste water treatment plants, nutrient trading in the Baltic Sea basin, crop rotations with legumes and application of gypsum and surface drainage in agriculture and water protection measures in forestry. Water protection policies group has close co-operation with Swedish University of Agricultural Sciences (SLU), Natural Resources Institute (Luke), Aarhus University (AU), University of Warsaw (WU), Stockholm Environment Institute Tallinn Centre (SEIT), the Finnish Ministry of the Environment, Finnish Environmental Institute (Syke) and John Nurminen Foundation.

Persons working with this theme: Kari Hyytiäinen, Markku Ollikainen, Anna-Kaisa Kosenius, Sampo Pihlainen, Sanna Lötjönen, Jenni Miettinen, Matti Sihvonen, Essi Heikkinen

Gypsum application

Researchers at the University of Helsinki study the feasibility of gypsum application of fields to boost agricultural water protection. Gypsum reduces erosion and leaching of phosphorus and carbon from fields. The impact occurs immediately after gypsum is dissolved into the soil. In reducing phosphorus load from fields to water courses, the method is more cost-effective than any currently used method. From farmers’ point of view it is an easy method to carry out. Furthermore, it does not decrease arable land, reduce crops or require investments. The method is now recommended for large-scale use in Finland by the researches. Its potential should also be studied in other Baltic Sea countries for the high promise it offers to the protection of the Baltic Sea.

University of Helsinki organised a large-scale pilot within the project SAVE (2016─2018, financed by the Finland’s Ministry of the Environment, FME) and project NutriTrade (2015─2018, financed by EU Interreg Central Baltic programme). The project SAVE II (2019─2020, financed by the FME) continues the monitoring in the pilot area. University of Helsinki participates also in a large-scale gypsum project implemented in the river Vantaanjoki catchment area (Vantaanjoen Kipsihanke 2018─2020, co-financed by the FME).

Persons working with this theme: Markku Ollikainen, Anna-Kaisa Kosenius