Johns Hopkins University. Course No Environmental and Natural Resource Economics. January Intersession, 2017
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1 Johns Hopkins University Course No Environmental and Natural Resource Economics January Intersession, 2017 Our economic and social systems are increasingly facing challenging questions regarding the protection of the environment, the management of natural resources and the achievement of economic progress that is in some sense sustainable, given technological and natural constraints. Decision-makers express growing concern for these issues, though their approaches to them are not always consistent or well-directed. This course is founded on the conviction that economic reasoning and policy analysis has much to offer (though it is not a panacea) in addressing these challenges. This course is designed to provide the basic conceptual grounding for the use of economic analysis to inform decisions regarding the proper use of the environment and natural resources, including energy (e.g., oil and natural gas) as well as biological resources (e.g., fisheries). Course Goals and Learning Objectives The main goal of this course is to introduce students to the major theories and policy issues in the field of environmental and natural resource economics. The course will cover a diverse range of topics: the economics of sustainability, market failures, economic incentives, climate change, environmental and natural resource valuation techniques, exhaustible resources (e.g., oil and natural gas etc.) and renewable resources (e.g., fisheries etc.). Emphasis is placed on the use of analytical techniques to assess real world environmental and natural resource problems. Upon completion of this course, students will be able to: Apply the concepts and tools of economic theory to conduct independent research on environmental and resource economics topics; Analyze the efficacy and efficiency of various environmental and natural resource policy options; Help advise policymakers on environmental and natural resource-related issues; and Demonstrate how economic principles can be applied to improve environmental quality as well as the use of natural resources.
2 Professor. Michael Shelby. Office Hours: By Appointment. Course Requirements. There will a Mid-term and a Final exam. Both the Mid-term and Final exams will be given in class. The Mid-term exam will be worth 40 percent of the final course grade. The Final exam will be worth 40 percent of the final course grade. A Policy Memo, to be discussed in class, will be assigned. The Policy Memo will be worth 15 percent each of the final course grade. Class participation will be worth five percent of your overall course grade. Occasional additional assignments may be given in class from time to time. Key Due Dates: Mid-Term Exam: Final Exam: Saturday, January 14 th Saturday, January 21 st Short Description/Bibliography of Policy Memo: Tuesday, January 10 th Policy Memo Due: Saturday, January 21 st Course Readings. The basic course textbooks are Environmental and Natural Resource Economics (9 th Edition, Pearson Education Inc., 2012; ISBN-13: ) by T. Tietenberg and L. Lewis and Economics of Natural Resources and the Environment (Johns Hopkins Press, 1990; ISBN ) by D. Pearce and K. Turner. Readings from various journals and working papers will be assigned and provided. Supplemental readings may be required if time permits. Students with Disabilities. Johns Hopkins University is committed to providing reasonable and appropriate accommodations to students with disabilities. Students with documented disabilities should contact the coordinator listed on the Disability Accommodations page. Further information and a link to the Student Request for Accommodation form can also be found on the Disability Accommodations page. Ethics and Plagiarism. The strength of the university depends on academic and personal integrity. In this course, you must be honest and truthful. Ethical violations include cheating on exams, plagiarism, reuse of assignments, improper use of the Internet and electronic devices, unauthorized collaboration, alteration of graded assignments, forgery and falsification, lying, facilitating academic dishonesty, and unfair competition. Report any violations you witness to the instructor. 2
3 SYLLABUS AND READINGS 1. Sustainable Development Tietenberg T. and Lewis, L., Chapter One, Visions of the Future, pp Pearce, D. and Turner, K., Chapter Two, The Circular Economy Green Income Accounting The World Bank, Are We Saving Enough for the Future?" Chapter Two of Expanding the Measure of Wealth, Indicators of Environmentally Sustainable Development, 1997, pp Environmental Kuznets Curves Yandle, B., Vijayaraghavan, M., Bhattarai, M., The Environmental Kuznets Curve: A Primer, PERC Research Study, 02 1, 2002 Levinson, A. and Hilton, F., Factoring the Environmental Kuznets Curve: Evidence from Automotive Lead Emissions, Journal of Environmental Economics and Management, 1998, pp THE MANAGEMENT OF THE ENVIRONMENT 3. Economic Efficiency, Property Rights and Market Failures Tietenberg, T. and Lewis, L., Chapter Two, The Economic Approach: Property Rights, Externalities, and Environmental Problems, Property Rights, pp Pearce, D. and Turner, K., Chapter Four, The Optimal Level of Pollution Tietenberg, T. and Lewis, L., Chapter Two, The Economic Approach: Property Rights, Externalities, and Environmental Problems, Public Goods, pp Randall, Alan, Chapter Nine, Sources of Inefficiency, Resource Economics, 1981, pp Hanley, N., Shogren, J., and White, B., Environmental Economics: In Theory and Practice, Chapter Three, Market Failure, Non-Exclusion and the Commons, pp
4 4. Designing Pollution Reduction Strategies Pearce, D. and Turner, K., Chapter Five, The Market Achievement of Optimal Pollution, pp Tietenberg, T. and Lewis, L., Chapter Fourteen, The Economics of Pollution Control: Overview, A Pollution Taxonomy, pp Assessment of Alternative Policy Instruments Taxation Pearce, D. and Turner, K., Chapter Six, Taxation and Optimal Pollution, pp Jaeger, W., Environmental taxation and the double dividend, International Society of Ecological Economics, 2003 Metcalf, G., A Proposal for a U.S. Carbon Tax Swap: An Equitable Tax Reform to Address Global Climate Change, The Brookings Institute, 2007, pp Marketable Tradable Permits Pearce, D. and Turner, K., Chapter Eight, Marketable Pollution Permits Case Study: Acid Rain Chan, G., Stavins, R., Stowe, R., and Sweeney, R., The SO 2 Allowance Trading Program and the Clean Air Act Amendments of 1990: Reflections on Twenty Years of Policy Innovation, Harvard Environmental Economics Program, 2012 Case Study: Climate Change Holdren, J., Meeting the Climate-Change Challenge, Presentation at the 8 th National Conference on Science, Policy and the Environment, 2008 Hanley, N., Shogren, J., and White, B., Environmental Economics: In Theory and Practice, Chapter Six, Transboundary Pollution and Global Public Goods, Background Issues and a Basic Game, pp Supplemental Reading Winebrake, J., et al., Fuel price elasticities in the U.S. combination truck sector, Transportation Research Part D, 2015, pp
5 Standards Pearce, D. and Turner, K., Chapter Six, Taxation and Optimal Pollution, Charges as a Low-Cost Solution to Standard Setting, pp Benefit-Cost Analysis Harrington, W., Heinzerling, L., and Morgenstern, R., Chapter One, Controversies Surrounding Regulatory Impact Analyses, Reforming Regulatory Impact Analysis, Resources for the Future, April, 2009, pp Total Economic Value Pearce, D. and Turner, K., Chapter Nine, Measuring Environmental Damage I: Total Economic Value, The Meaning of Environmental Valuation, pp , Total Economic Value, pp Benefits Estimation Case Study: Hazardous Waste Site Deaton, J., and Hoehn, J., Hedonic Analysis of Hazardous Waste Sites in the Presence of Other Urban Disamenities, Environmental Science and Policy, 2004 Discounting Pearce, D. and Turner, K., Chapter Fourteen, Discounting the Future, The Problem and The Rationale for Discounting and The STPR, pp and A Critique of Discounting, pp OMB Guidance, Circular A-4, Regulatory Analysis, September, 2003, Discount Rates, pp After Sandy a New Threat: Soaring Flood Insurance, Claims Journal, June Value of a Life Saved Robinson, L., How U.S. Government Agencies Value Mortality Risk Reductions, Review of Environmental Economics and Policy, 2007, pp
6 Tietenberg T. and Lewis, L., Chapter Three, Evaluating Trade-offs: Benefit-Cost Analysis and Other Decision-Making Metrics, A Critical Appraisal, pp RESOURCE MANAGEMENT 6. Renewable Resources Tietenberg, T. and Lewis, L., Chapter Thirteen, Common-Pool Resources: Fisheries and Other Commercially Valuable Species Pearce, D. and Turner, K., Chapter Sixteen, Renewable Resources, Preservation Value, pp Scientists Say Cod are Scant; Nets Say Otherwise, New York Times, December, Supplemental Reading Blignaut, J., de Wit, M. and Barnes, J., Chapter Ten, The Economic Value of Elephants from Elephant Management, A Scientific Assessment for South Africa, Wits University Press, Nonrenewable and Depletable Resources Tietenberg, T. and Lewis, L., Chapter Six, Depletable Resource Allocation: The Role of Longer Time Horizons, Substitutes and Extraction Costs, A Resource Taxonomy, pp Tietenberg, T. and Lewis, L., Chapter Five, Dynamic Efficiency and Sustainable Development, A Two-Period Model, pp Tietenberg, T. and Lewis, L., Chapter Six, Depletable Resource Allocation: The Role of Longer Time Horizons, Substitutes and Extraction Costs, Efficient Intertemporal Allocations and Market Allocations of Depletable Resources and Summary, pp Pearce, D. and Turner, K., Chapter Eighteen, Exhaustible Resources, The Effects of Changing Parameters, pp Peak Oil Tietenberg, T. and Lewis, L., Chapter Seven, Energy: The Transition from Depletable to Renewable Resources, Introduction, pp
7 Campbell, C. and Laherrere, J., The End of Cheap Oil, Scientific American, Yergin, D., Stepping on the Gas, Wall Street Journal, April,
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