Economic theory is used to examine environmental and natural resource ... how
natural resource decisions are made and how they might be might be improved ...
Christiansen Spring 2010 Economics 273
Environmental and Natural Resource Economics 1. Meeting Time and Place E&M 273 (Section 1, CRN 7291) meets on Monday, Tuesday, Wednesday, and Thursday from 10:10 to 11:00 a.m. in Vulgamore 204.
2. Catalog Description Prerequisite: E&M 101. Economic theory is used to examine environmental and natural resource problems and policies.
3. Course Objectives In general, students should be able to (1) appreciate the role that economics plays in shedding light on environmental issues, (2) evaluate environmental policies and proposals, and (3) understand how natural resource decisions are made and how they might be might be improved upon. In particular, students will be able to (1) work with cost-benefit analysis in evaluating environmental policies and projects, (2) explain how the market may fail in the presence of externalities and evaluate possible corrective actions, (3) compare and contrast the effects of command and control environmental policies and those that rely upon economic incentives, and (4) compare and contrast the ways a resource might be managed depending upon whether the resource is depletable, renewable, or a common-pool resource.
4. Examinations, Class Discussions, and Term Paper There will be two midterm examinations, tentatively scheduled to be given in class on Thursday 25 February and Tuesday 6 April. Another examination will be given during finals week on Tuesday 4 May from 7:00 to 9:00 p.m. Each student will lead class discussion on one of the readings. An 8–10 page term paper is required for the course. The paper is due on Tuesday 20 April at 5:00 p.m.
5. Grades Grades will be based on 220 points as follows: 50 points for each of the three exams, 50 points for the term paper, and 20 points for attending, leading, and participating in class discussions.
6. Office My office is Rob 100, my telephone is 629-0425, and my email address is
[email protected]. Office hours are Monday, Tuesday, and Wednesday, 3:10 to 5:00 p.m. My secretary is Renee Harlow in Rob 109. The department telephone number is 629-0419.
7. Textbooks The textbooks for the course are Environmental and Natural Resource Economics, 8th ed. by Tom Tietenberg and Lynne Lewis and Eco-nomics: What Everyone Should Know about Economics and the Environment by Richard Stroup.
8. Other Resources There is a home page for the course at http://www.albion.edu/econ/christiansen/envireco. htm. This page contains some old examinations I have given while teaching the course previously and it contains a syllabus with hyperlinks to some of the readings. There is a MOODLE site for this course. To access it, go to http://courses.albion.edu, login with your network name and password, and find your way to E&M 273 – Environmental and Natural Resource Economics (Christiansen). Many of the readings listed below are available online, but some are not. Those that are not are followed by the tag [MOODLE]. Links to these papers need to be obtained at the MOODLE site.
9. Course Outline and Reading List I. Analytical Tools A. Introduction 1. Tietenberg and Lewis, Chapter 1 2. Stroup, Chapter 1 B. Cost-Benefit Analysis 1. Tietenberg and Lewis, Chapter 2 2. Tietenberg and Lewis, Chapter 3 C. Externalities, Market Failure, Public Goods, and Common Resources 1. Tietenberg and Lewis, Chapter 4 2. Christiansen, “Externalities and Public Goods,” W:/depts/econ/econ273spring2010/ christiansen_chapter14.pdf. D. Property Rights and the Coase Theorem 1. Stroup, Chapter 2 2. Ruffin, “Externalities , Markets, and Government Policy,” Federal Reserve Bank of Dallas Economic and Financial Review, (Q III), 1996, 24–29. Online at http://www. dallasfed.org/research/er/1996/er9603c.pdf.
3. Tietenberg and Lewis, pp. 84–88 E. Papers for Discussion 1. Portney, Paul and W. Harrington, “Health-Based Environmental Standards: Balancing Costs with Benefits,” Resources, No. 120, Summer 1995. [MOODLE] 2. Brennan, Timothy, “Discounting the Future: Economics and Ethics,” Resources, No. 120, Summer 1995. [MOODLE] 3. Portney, Paul, “Time and Money: Discounting’s Problematic Allure,” Resources, No. 136, Summer 1999. Online at http://www.rff.org/Documents/Resources/Resources136_Portney.pdf. 4. Brannon, Ike, “What Is a Life Worth?” Regulation, 27(4), Winter 2004. Online at http://www.cato.org/pubs/regulation/regv27n4/v27n4-8.pdf. 5. Alan Krupnick, “How Much Will People Pay for Longevity?” Resources, No. 142, Winter 2001. Online at http://www.rff.org/Publications/Resources/Documents/ 142/142_krupnick.pdf. 6. Zerbe, Richard and Howard McCurdy, “The End of Market Failure,” Regulation, 23(2), Summer 2000. Online at http://www.cato.org/pubs/regulation/regv23n2/zerbe. pdf. 7. Hardin, Garrett, “The Tragedy of the Commons,“ Science, 162:1243–48 (1968). Online at http://www.garretthardinsociety.org/articles/art_tragedy_of_the_commons. html. 8. Elinor Ostrom’s Nobel Prize: from nobelprize.org http://nobelprize.org/nobel_ prizes/economics/laureates/2009/info.pdf; comment by economist David Henderson, The Wall Street Journal, October 12, 2009, [MOODLE]; comment by economist John B. Taylor, http://www.johnbtaylorsblog.blogspot.com/2009/10/teachablemoment.html; comment by economist Paul Romer, http://www.chartercities.org/ blog/72/skyhooks-versus-cranes-the-nobel-prize-for-elinor-ostrom; comment by economist Vernon Smith, http://www.forbes.com/2009/10/12/elinor-ostromcommons-nobel-economics-opinions-contributors-vernon-l-smith_print.html. 9. Tierney, John, “A Tale of Two Fisheries,” The New York Times, August 27, 2000, http://www.nytimes.com/2000/08/27/magazine/a-tale-of-two-fisheries.html. II. Environmental Policy A. Pollution Control 1. 2. 3. 4. 5.
Tietenberg and Lewis, Chapter 15 Stroup, Chapter 3 Stroup, Chapter 4 Tietenberg and Lewis, Chapter 16 Tietenberg and Lewis, Chapter 17, pp. 413–421
B. Ozone Depletion 1. Tietenberg and Lewis, Chapter 17, pp. 421–425 C. Global Warming/Climate Change
1. Tietenberg and Lewis, Chapter 17, pp. 425–435 D. Special Cases 1. Tietenberg and Lewis, Chapter 18 2. Tietenberg and Lewis, Chapter 19 E. Papers for Discussion 1. Portney, Paul, “Market-Based Approaches to Environmental Policy: A ‘Refresher’ Course,” Resources, No. 151, Summer 2003. Online at http://www.rff.org/Publications/ Resources/Documents/151/RFF-Resources-151-Marketapproaches.pdf. 2. Harrington, Winston, and R. Morgenstern, “Economic Incentives versus Command and Control: What’s the Best Approach for Solving Environmental Problems?” Resources, No. 152 (Fall/Winter 2004). Online at http://www.rff.org/Publications/ Resources/Documents/152/RFF_Resources_152_ecoincentives.pdf. 3. Stavins, Robert, “Lessons Learned from SO2 Allowance Trading,” Choices, http:// www.choicesmagazine.org/2005-1/environment/2005-1-11.htm. 4. Boyd, James et. al., “Trading Cases: Five Examples of the Use of Markets in Environmental and Resource Management,” Environmental Science and Technology, 37 (June 1, 2003). [MOODLE] 5. Tol, Richard S. J. 2009. ”The Economic Effects of Climate Change,” Journal of Economic Perspectives, 23(2): 29–51. [MOODLE] Comment by CATO fellow Jerry Taylor at http://www.masterresource.org/2009/11/the-economics-of-climatechange-essential-knowledge/. 6. Lomborg, Bjorn, “Perspective on Climate Change,” Congressional testimony, March 21, 2007. Online at http://www.climatechangefacts.info/ClimateChangeDocuments/ lomborg_testimony.pdf 7. Mendelsohn, Robert, “A Critique of the Stern Report,” Regulation, 29(4), Winter 2006. Online at http://www.cato.org/pubs/regulation/regv29n4/v29n4-5.pdf. 8. Goklany, Indur, “Discounting the Future,” Regulation, 32(1), Spring 2009. Online at http://www.cato.org/pubs/regulation/regv32n1/v32n1-5.pdf. 9. Murphy, Robert, “Rolling the DICE: William Nordhaus’s Dubious Case for a Carbon Tax,” The Independent Review, 14(2), Fall 2009. Online at http://www.independent. org/pdf/tir/tir_14_02_03_murphy.pdf. 10. Friedman, Thomas, “Going Cheney on Climate,” The New York Times, December 9, 2009. Online at http://www.nytimes.com/2009/12/09/opinion/09friedman.html; comment by political commentator Jim Manzi at http://masterresource.org/2009/ 12/tom-friedman-has-a-standing-invitation-to-my-weekly-poker-game/; comment by economist Don Boudreaux at http://cafehayek.com/2009/12/if-we-ignorethe-costs.html/print/. 11. Portney, Paul, “Penny-Wise and Pound-Fuelish? New Car Mileage Standards in the United States,” Resources, No. 147, Spring 2002. Online at http://www.rff.org/ Publications/Resources/Documents/147/147_portney.pdf. 12. Parry, Ian, “Is Gasoline Undertaxed in the United States?” Resources, No. 148, Spring 2002. Online at www.rff.org/RFF/Documents/RFF-Resources-148-gasoline.pdf.
III. Natural Resource Economics A. Papers for Discussion 1. Solow, Robert, “Is the End of the World at Hand?” Challenge, March-April 1973 [MOODLE] 2. Solow, Robert, “Sustainability: An Economist’s Perspective,” National Geographic Research and Exploration, 8:10–21 (1992). [MOODLE] 3. Brown, Gardner and Jason Shogren, “Economics of the Endangered Species Act,” Journal of Economic Perspectives, 12(3):3–20 (Summer 1998). [MOODLE] 4. Metrick, Andrew and M. Weitzman, “Conflicts and Choices in Biodiversity Preservation,” Journal of Economic Perspectives, 12(3):21–34 (Summer 1998) [MOODLE] B. Nonrenewable Resources and Depletion 1. Tietenberg and Lewis, Chapter 5 2. Tietenberg and Lewis, Chapter 7 C. Renewable Resources: Forestry 1. Tietenberg and Lewis, Chapter 13 D. Renewable Resources: Fisheries 1. Tietenberg and Lewis, Chapter 14 E. Recyclable Resources 1. Tietenberg and Lewis, Chapter 9 F. Energy Resources 1. Tietenberg and Lewis, Chapter 8
10. Paper Your instructions are to use economic analysis to discuss problems or policies related to the environment or natural resources. Write about a subject that interests you. The possibilities are endless. There are several chapters in the textbook that we did not cover and which might serve as a point of departure for a paper. You may take a topic we covered and expand upon it. Or you may choose a topic that we did not address. You should have your topic approved by me shortly after spring break. The paper is due on Tuesday 20 April at 5:00 p.m. Late papers will be penalized. The paper should be 8–10 pages in length. It must be word-processed or typeset. While I will grade it mostly on substance, considerations such as organization, clarity, grammar, and style also matter. Document your sources! Internet sources are OK, but you must use some written sources! Do your own work! The penalty for plagiarism is a zero in the course.
11. Albion College Policies Disability Statement: If you have a disability and require accommodations or modifications in class instruction or course-related activities, please contact the Learning Support Center (LSC) staff who can arrange for reasonable accommodations for students who provide documentation of their disability/condition. If you are presently registered with the LSC and have requested accommodations through the LSC for this semester, please plan to meet with me as early as possible to discuss the best way to implement these accommodations in this class. The LSC is located on the third floor of the Seeley Mudd library or call 517-629-0825. Albion College Statement on Attendance: Regular attendance in all classes is expected. Every absence from class is inevitably a loss — usually one which can never be made up. A student has the responsibility to inform his or her faculty member, whenever possible in advance, of an absence due to serious or prolonged illness, and verification of absences due to emergency reasons, may be obtained from the Office of Residential Life. Statement on Academic Integrity: As an academic community, Albion College is firmly committed to honor and integrity in the pursuit of knowledge. Therefore, as a member of this academic community, each student acknowledges responsibility for his or her actions and commits to the highest standards of integrity. In doing so, each student makes a covenant with the college not to engage in any form of academic dishonesty, fraud, cheating, or theft.
