Department of Economics
Economics 155 (also Earth Systems 112 & Civil/Envir Eng
175):
Environmental and Natural Resource Economics
Spring 2000
Prof.
Charles D. Kolstad (Visiting Professor
from University of California, Santa Barbara)
Office: 251 Landau Economics Building
(Phone 3-3491; email ckolstad@leland)
Office Hours: Tu 4-6, Th 9-10 or by appt
Class Meets: TuTh 1:15-3:05 in Building
200, Room 02
(no class April
18 & May 31; extra class Monday, April 17, 3:15-4:30)
Refer at least weekly to
the class announcements page.
This is an upper division economics class
with a prerequisite of Economics 50 (not a co-requisite -- you should already
have taken Econ 50). Economics 51 would be nice but is not required. A working
knowledge of differential calculus will be assumed. Our goal is for you to
become familiarized with the fields of environmental and resource economics,
with a particular emphasis on environmental economics. We will try to motivate
our discussion with policy relevant readings. However, this course is primarily
an economics course and as such will be heavy on theory and economics
applications. This is a 5-unit class which means you can expect approximately
10 hours of homework/reading per week, on average.
There are four main areas of economics that
we will cover over the course of the quarter: externalities/market failure,
environmental regulation, valuation and natural resources. The first of these
is the public economics dimension of environmental economics whereas the second
is the industrial organization dimension of environmental economics. These are
the two primary fields from which environmental economics draws its theory. The
third topic area, valuation, is uniquely environmental economics and is
concerned with measuring the demand for environmental quality. The fourth area,
natural resources, is an extension of capital theory to the case of renewable
and nonrenewable resources, such as fisheries, forests, fossil fuels and
minerals.
The requirements for the course are one
midterm (20%), one short paper (20%), one final exam (30%), approximately seven
(weekly minus a few weeks) homework assignments (20%) and class/section
participation (10%).
The midterm will be Thursday, May 4. The
final exam is Saturday, June 3, 3:30 - 6:30. Exams will cover material
discussed in class as well as material in the readings which may not have been
discussed in class. The exams are closed book but you may bring one 8.5" x
11" piece of paper to the exam with anything written on it (both sides if
you wish).
Homeworks are due in class on Thursdays;
homeworks handed in a day late will be penalized and homeworks more than a day
late (after 5pm Friday) will be graded but will not count. Homeworks that are
not handed in during class should be delivered to your TA. Your worst homework
will be dropped in computing the homework part of your grade. See the
assignments webpage. After the fact, see the solutions webpage.
The paper is due May 31. The term paper
should be an economic analysis of an environmental or resource issue in the
news during the course of the academic year. Attach to the paper you submit a
copy of the newspaper, magazine or other current affairs article (from the
period October 1, 1999 -- May 30, 2000) that is closely related to your paper.
Please show your skills with references and footnotes as well as your command
of the English language (your grade suffers if the writing is not first rate).
Remember to focus on the economic dimensions of the environmental problem in
your paper, not just the policy or informational dimensions. For more
information, please refer to the paper webpage.
The two texts for the class are:
Charles D. Kolstad, Environmental Economics
(Oxford University Press, New York, 2000) [referred to below as Kolstad]
Robert N. Stavins (Ed.), Economics of
the Environment, 4th Edition (WW Norton, New York, 2000) [referred to below
as Stavins].
Other readings will be on reserve at Meyer
Library.
The teaching assistants are:
David Miller
Syllabus
I. Positive Issues
(3/28--4/6)
Tuesday 3/28: What is environmental
economics? Review of policy.
Readings, 3/28:
Kolstad, ch 1, 2; Stavins, ch 1 (Stavins and Fullerton) & 2 (Hardin)
Thursday 3/30: Externalities and Market
Failure
Readings:
Kolstad, Ch 5
Tuesday 4/4: Decentralized provision of
public goods and bads
Readings:
Kolstad, Ch 4
Thursday 4/6: Dealing with externalities
Readings:
Kolstad, Ch 6 & 7; Stavins, Ch 3 (Coase)
II. Normative Issues
(4/11-4/13)
Tuesday 4/6: Sustainability; social welfare
Readings:
Kolstad, Ch 3; Stavins, Ch 5 (Solow)
Thursday 4/13: Social Choice
Readings:
Stavins, Ch 14 (Viscusi), Ch 15 (Kelman)
III. Regulating
Pollution--basics (4/17 -- 4/25)
Monday 4/17 (extra class): Los Angeles'
experience with air pollution regulation
Jack P Broadbent,
Asst Deputy Executive Officer, South Coast Air Quality Management District, LA
Tuesday 4/18: no class
Thursday 4/20: Basic regulation theory
Readings: Kolstad,
Ch 8; Stavins, Ch 16 (Tietenberg), Ch 18 (Hahn)
Tuesday 4/25: Spatial and temporal
dimensions of pollution control
Readings:
Kolstad, ch 9; Stavins, ch 21 (Stavins)
IV. Asymmetric Information
(4/27 -- 5/2)
Thursday, 4/27: Moral Hazard
Readings:
Kolstad, ch 10
Tuesday, 5/2: Adverse Selection
Readings:
Kolstad, Ch 11
V. Risk (5/9)
Tuesday, 5/9: Risk and Uncertainty
Readings:
Kolstad, Ch 12; Stavins, Ch 13 (Arrow et al)
VI. International (5/11)
Thursday, 5/11: Trade, jurisdictional competition
Readings:
Kolstad, ch 13; Stavins, Ch 24 (Jacoby et al)
VII. Macro (5/16)
Tuesday, 5/16: Green accounting &
double dividend
Readings:
Kolstad, ch 14; Stavins, Ch 17 (Goulder)
VIII. Valuation (5/18 --
5/23)
Thursday, 5/18: General issues and hedonics
Readings:
Kolstad, Ch 15 (Parts I -- IV), Ch 16; Stavins, Ch 9 (Smith)
Tuesday, 5/23: Household production and
Contingent Valuation
Readings:
Kolstad, Ch 17 & 18; Stavins, Ch 10 (Portney), 11 (Hanemann) & 12
(Diamond and Hausman)
IX. Resources (5/25 --
5/30)
Thursday, 5/25: Exhaustible Resources and
energy
Tuesday, May 30: Renewable resources --
fisheries
Thursday, June 1: Other resource issues
[Reading list version 3/25/00]