Course Description
Environmental issues are becoming increasingly apparent in the 21st century. The integration of economic and environmental systems places economists in a unique position to analyze these issues. This course will provide you with an introduction to how economists think about and mitigate environmental issues. Through a mixture of discussion and problem-solving, we will learn about key environmental issues, such as climate change, resource management, and pollution control. Together we will apply an economic lens to break down real world observations as well as identify possible policy interventions and their impact.
During class, we will cover foundational topics and discuss their application to current events. Outside of class, you are expected to review the literature and practice problem solving by applying the topics discussed in class. By the conclusion of the course, you should be able to describe key environmental issues through the lens of an economist, prescribe potential policy interventions, and explain its impact.
Course Schedule
Introduction
Lesson Objectives
Course Goals
Review of the syllabus
Readings
KO Ch. 1
“How Economists see the environment” by Fullerton and Stavins
“Welcome to the Anthropocene” by The Economist
Efficiency
Lesson Objectives
Define and compare gross and net benefits
Identify socially optimal environmental quality
Compare static vs. dynamic efficiency
Readings
KO Ch. 2
“Discounting Future Benefits and Costs” by EPA
Benefits Pt. 1
Lesson Objectives
Define and categorize economic benefits
Define the different methods of non-market valuation
Readings
KO Ch. 3
“On the functional relationship between biodiversity and economic value” by Paul et al. (2020)
Benefits Pt. 2
Lesson Objectives
Explain and apply Travel Cost Method
Explain and apply Averting Behavior Models
Explain and apply Hedonic Models
Readings
KO Ch. 3
“Beyond a Visit: How We Value National Parks” by Julie Seger (NPF)
Benefits Pt. 3
Lesson Objectives
Explain and calculate VSL
Explain and analyze Contingent Valuation Methods
Explain and analyze Choice Experiments
Readings
KO Ch. 3
“Euthanizing the Value of a Statistical Life” by Trudy Ann Cameron
“Contingent Valuation: A User’s Guide” by Richard Carson
Costs
Lesson Objectives
Explain sources of economic costs for environmental protection
Contrast statutory vs. economic tax incidence
Explain impact of environmental regulation on jobs and innovation
Readings
KO Ch. 3
“‘Job-Killing’ Carbon Taxes?” by Hafstead et al. (2018, RFF)
Benefit-Cost Analysis
Lesson Objectives
Explain and analyze social choice theory
Explain the process of benefit-cost analysis
Explain arguments for and against benefit-cost analysis
Readings
KO Ch. 3
“Mercury and Air Toxics Standards: Co-Benefits and the Courts in U.S. Cost-Benefit Analysis” by Arik Levinson
Market Failure
Lesson Objectives
Define and analyze market with externalities
Define and analyze market for public goods
Define and analyze market for common pool resources
Readings
KO Ch. 4, 5
“The Hidden Cost of Congestion” by The Economist
Depletable Resources
Lesson Objectives
Define and categorize resources
Analyze optimal extraction of nonrenewable resources
Explain and analyze sources of market failure for nonrenewable resources
Readings
KO Ch. 6
“The Peak-Oil Debate” by The Economist
“‘It Takes A Crisis’: How ‘73 Embargo Fueled Change in U.S.” by NPR
Renewable Resources
Lesson Objectives
Analyze the basic economics of a renewable resource
Compare maximum sustainable yield and efficient sustainable yield
Analyze sources of market failure for renewable resources
Readings
KO Ch. 7
“Improving the Ocean - Getting Serious About Overfishing” by The Economist
“The Less Deadly Catch” by NPR - Planet Money
Coase Theorem
Lesson Objectives
Define and explain Coase Theorem
Explain and analyze limitations of Coase Theorem
Explain social pressure and information-based approaches
Readings
KO Ch. 8
“Utility Buys Town It Chocked, Lock, Stock and Blue Plume” by The New York Times
“Emoticons Reduce Energy Use” by Stanford SPARQ
Public Policies Pt. 1
Lesson Objectives
Define and analyze efficiency of Command-and-Control policies
Define and analyze efficiency of Pigouvian Tax policies
Define and analyze efficiency of Tradeable Permit policies
Readings
KO Ch. 8
Public Policies Pt. 2
Lesson Objectives
Compare taxes and tradeable permits
Compare standards with market-based policies
Analyze public policies for managing natural resources
Readings
KO Ch. 9
Public Policies Pt. 3
Lesson Objectives
Evaluate US SO2 allowance trading program
Evaluate New Zealand IFQ program
Evaluate US municipal water pricing
Readings
KO Ch. 10
Economic Sustainability
Lesson Objectives
Define economic sustainability
Explain and analyze economic sustainability
Explain and analyze green accounting
Readings
KO Ch. 11
Climate Change Pt. 1
Lesson Objectives
Define climate change and its effects
Analyze economic impacts of climate change
Analyze strategies to reduce climate change impacts
Readings
“Putting Goldilocks to Work” by The Economist
Climate Change Pt. 2
Lesson Objectives
Analyze international climate policy
Analyze domestic climate policy
Analyze policy interactions
Readings
“The World Urgently Needs to Expand its Use of Carbon Prices” by The Economist
Energy Transitions
Lesson Objectives
Describe history of energy use and energy transitions
Analyze and explain current push for clean energy transition
Analyze policies for clean energy transition
Readings
“The World’s Energy System Must Be Transformed Completely” by The Economist
“Examining Energy Transitions: A Dozen Insights Based on Performance” by Vaclav Smil (2016)
Wrap-Up
Lesson Objectives
Review Course Goals