Salisbury University Perdue School of Business Department of Economics and Finance



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Salisbury University

Perdue School of Business

Department of Economics and Finance
ECON415 P. LeBel

Environmental and Natural Resource Economics Spring 2012

PH-373 MW 15:00-16:15

Course Objectives


The Economics of Natural Resources and Global Warming integrates our expanding knowledge of global climate change with the role of extractive industries in the economy. As such, it draws on various models by natural scientists with those developed by economists to provide an integrated framework for understanding the relationships between natural resource dynamics and the environment. Descriptive, geometric, and elementary quantitative methods will be used throughout the course. Class sessions, which are based on a student's prior reading of assigned materials, require a significant degree of student participation. Extensive use will be made of the course website, located at:
http://msuweb.montclair.edu/~lebelp/EnvironmentalEconomics415.html
A student who has completed this course is expected to demonstrate a mastery of essential concepts and analytical skills in several key areas. The most important of these areas are:


  1. An overview of natural resource industries; minerals, forestry, marine, land, and energy that includes an economic measure of their absolute and relative size in key economies around the world;

  2. An examination of basic economic tools of natural resource economics: opportunity cost, externalities, property rights, taxes and subsidies, technical and economic efficiency;

  3. An overview of alternative view of the role of the public sector, with emphasis on the economic functions of the public sector in general and those that pertain to natural resource economics and global warming in particular;

  4. An examination of the science of global climate change, including various sources of current and evolving projections such as those of the IPCC, the Stern Report, and others;

  5. An examination of alternative strategies that address the key ares of natural resource economics and global warming within a national and international framework;

  6. An analysis of reent national and international initiatives within the framework of economic policy alternatives, including the Rio Accords of 1992, the Kyoto Accords of 1992, and others.

The student’s knowledge in each of the above areas will be tested in three examinations, in periodic problem sets and in a research paper. A student who has successfully mastered both theory and methodological applications in these areas will be well prepared to pursue both direct career experience, as well as continuing study in Economics and/or in related fields.


***

Policies and Procedures:
Undergraduate Grading:

Final examination: 30% (cumulative; essays and objective)

Monday, May 14, 2012, TBA

Mid-Term examination: 25% (essays and objective)

In-Class participation: 20%

Undergraduate Research Paper*: 25% (standards and guidelines for

the paper are found below)


http://msuweb.montclair.edu/~lebelp/CurrentCourseMaterialsSpring.html

Make-up examinations: None.

Office Hours: By appointment:

Other Contacts: Telephone (E&F Dept): (410)-677-4808

e-mail: LeBelp@mail.montclair.edu.



*Guidelines for Research Paper.

Students are to select a topic and prepare a research paper based on the indicated submission deadlines. Papers are to be double-spaced in Microsoft Word, using APA style. The body of the paper, which contains text, footnotes, tables, and charts only, is to be a minimum of single spaced ten pages. Sources used are to be reported as shown in the bibliography citations listed below. Failure to adhere to any of the deadlines will result in grading penalties. Only topics that adhere to the instructor approval schedule may be submitted. Students should expect to apply theory and applications from the course to the analysis in the paper.




Salisbury University

Perdue School of Business

Department of Economics and Finance

ECON415-01 P. LeBel

Environmental and Natural Resource Economics Spring 2012
Syllabus
Text: Tom Tietenberg and Lynne Lewis. Environmental and Natural Resource Economics, eighth edition. (New York: Pearson Addison-Wesley Publishing Company, 2009).
Recommended Periodical Supplements:

The Wall Street Journal The New York Times


The Economist Financial Times
Scientific American Science

Worldwatch Institute
Readings on Reserve:

Acemoglu, Daron and Thierry Verdier (2000). "The Choice Between Market Failures and Corruption," American Economic Review, 90:1 (March), 194-211.

Ackerman, Frank and Elizabeth Stanton (2006). "Climate Change – the Costs of Inaction," (Medford, Mass.: Tufts University Global Development and Environment Institute).

Bator, Francis M. (1958), “Anatomy of Market Failure,” Journal of Political Economy, 72:3 (August), 351-379.

Bojö, J., J. Mucknall, K. Hamilton, N. Kishor, C. Kraus, and P. Pillai (2001). "Environment", Draft Framework for Environmental Policy. (Washington, D.C.: The World Bank).

Borenstein, Severin, James Bushnell, and Frank Wolak (2001). "Measuring Market Inefficiencies in California's Restructured Wholesale Electricity Market," paper presented at the ASSA conference in Atlanta, Georgia (January).

Carson, Richard, and W. Michael Hanemann (2005). “Contingent Valuation”, in K.G. Maler and J.R. Vincent, editors, Handbook of Environmental Economics. (New York: North-Holland Publishers), pp. 821-936.

Coase, Ronald H (1937), “The Nature of the Firm,” Economica, New Series 4:16 (November), 386-405.

Coase, Ronald H. (1960), “The Problem of Social Cost”, Journal of Law and Economics (October).

Dasgupta, Partha (2006). "Comments on the Stern Review's Economics of Climate Change", (London, U.K.: Royal Society Foundation for Science and Technology).

Easterbrook, Gregg (2007). "Global Warming: Who Loses-And Who Wins?", The Atlantic Monthly (April), 1-8.

Ehrlich, Paul R. and Anne E. Ehrlich (2009). “The Population Bomb Revisited,” The Electronic Journal of Sustainable Development 1:3, 63-71.

Federal Trade Commission (1973). “The Petroleum Industry: Structure and Conduct”, in Mansfield, Microeconomics Readings, (326-341).

Golan, Elise, Fred Kuchler, and Lorraine Mitchell (2000). "Economics of Food Labeling". (Washington, D.C.: Economic Research Service, U.S. Department of Agriculture, Agricultural Economic Report No. 793).

Goodland, Robert (1995). "The Concept of Environmental Sustainability," Annual Review of Ecology and Systematics, 26, 1-24.

Gylfason, Thorvaldur, and Martin L. Weitzman (2003). "Icelandic Fisheries Management: Fees vs. Quotas," Conference paper, Iceland and the World Economy: Small Island Economies in the Era of Globalization. (Cambridge, Mass.: Harvard University Center for International Development).

Krautkraemer, Jeffrey A. (1998). "Nonrenewable Resource Scarcity," Journal of Economic Literature, 36:4 (December), pp. 2065-2107.

Lareau, Thomas J. and Douglas A. Rae (1989), "Valuing WTP for Diesel Odor Reductions: An Application of Contingent Ranking Technique," Southern Economic Journal 55:3, 728-742.

LeBel, P. (2005). "Optimal Pricing of Biodiverse Natural Resources for Sustainable Economic Growth," Journal of Development Alternatives, 24:1-2 (March-June), 5-38.

LeBel, P. (1999), "Measuring Sustainable Economic Development in Africa," Scandinavian Journal of Development Alternatives, 18:2-3 (June-September), 265-282.

Lovins, Amory, L. Hunter Lovins, and Paul Hawken (1999). "A Road Map for Natural Capitalism," Harvard Business Review, (May-June), 146-158.

McFadden, Daniel (1994). “Contingent Valuation and Social Choice,” American Journal of Agricultural Economics 76:4 (November), 689-708.

MIT, “Contingent Valuation Tools,” (Cambridge, Mass.: MIT).

Newell, Richard G., James N. Sanchirico, and Suzi Kerr (2002). "Fishing Quota Markets," Discussion Paper 02-20. (Washington, D.C.: Resources for the Future).

Nordhaus, William (2006), "The Stern Review on the Economics of Climate Change," (November).

Nuclear Regulatory Commission (2011). “Nuclear Insurance and Disaster Relief Funds – Price-Anderson Act,”

Porter, Robert H. (1995), “The Role of Information in U.S. Offshore Oil and Gas Lease Auctions”. Econometrica 63:1 (January), pp. 1-28.

Stern, Nicholas (2006), Review of Climate Change Science, (London, U.K.: Royal Society Foundation for Science and Technology).

Stern Review Part 1 – Study Approach

Stern Review Part 2 – Impacts on Growth and Development

Stern Review Part 3 – Stabilization Economics

Stern Review Part 4 – Policy Mitigation Responses

Stern Review Part 5 – Policy Responses for Adaptation

Stern Review Part 6 – International Collective Action

Stern Review Charts - Stern Review Charts

Tietenberg, Tom (2003). "The Tradable-Permits Approach to Protecting the Commons: Lessons for Climate Change," Oxford Review of Economic Policy, 19:3, 400-420.

UNCTAD (1998). Greenhouse Gas Emissions Trading: Defining the Principles, Modalities, Rules and Guidelines for Verification, Reporting and Accountability, (Geneva, Switzerland: UNCTAD).

Varian, Hal R. (2006). "Recalculating the Costs of Global Climate Change," The New York Times, November 14, 2006.



____________. "Climate of Opinion," The Wall Street Journal, February 5, 2007.

World Meterological Organization, United Nations Environmental Programme, Intergovernmental Panel on Climate Change, "Climate Change 2007: Impacts, Adaptation and Vulnerability". (Brussels, Belgium: IPCC Working Group II).


Internet Sources:

Ecological Economics Resources:

http://www.ecoeco.org

Environmental Economics Resources:

http://www.aere.org/

Intergovernmental Panel on Climate Change (IPCC):

http://www.ipcc.ch/pub/online.htm

Japan Recycling Statistics:

http://web-japan.org/stat/stats/19EN51.html

Nature Conservancy:

http://nature.org/aboutus/

The Forest Stewardship Council:

http://www.fsc.org/fsc

U.S. Department of Energy Renewable Energy Annual Report (REA):

http://www.eia.doe.gov/cneaf/solar.renewables/page/pubs.html/

U.S. Department of the Interior Minerals Yearbook:

http://minerals.usgs.gov/minerals/pubs/

U.S. Energy Information Administration, Department of Energy

http://www.eia.doe.gov/

U.S. Energy Recycling Statistics:

http://www.epa.gov/epaoswer/non-hw/muncpl/facts.htm/

U.S. Environmental Protection Agency National Ambient Air-Quality Standards:

http://www.epa.gov/air/criteria.html

U.S. Environmental Protection Agency Air Quality Emissions Trends:

http://www.epa.gov/airtrends/sixpoll.html

U.S. Environmental Protection Agency Acid Rain Trends:



http://www.epa.gov/docs/acidrain/update3/allws.html


  1. Physical Science and Economics of the Environment and Natural Resources

(2012/01/30) Class 1 – Text, Visions of the Future (1-13). Key concepts: States and markets, environmental economics, ecological economics, forecasting and simulation models, the framework of public policy. Reserve Readings: WMO-UNEP IPCC Climate Change update: "Climate Change 2007: Impacts, Adaptation and Vulnerability"; Sir Nicholas Stern, Review of Climate Change Science (henceforth, Stern Review) – Study Approach. Datasets: World Grain Production; Global Temperatures Application Modules: The Circular Flow Diagram; The Measurement of Risk. Econometric Modeling. Classroom Case Studies: Basic Supply and Demand Model
(2012/02/01) Class 2 – Text, Valuing the Environment: Concepts (14-33). Key concepts: thermodynamics, entropy law, positive and negative feedback loops, carrying capacity, positive vs. normative economics, opportunity cost, the willingness to pay criterion, total, average, and marginal costs, net vs. total social benefits, the net present value (NPV) criterion, the first equi-marginal principle (the “efficiency equi-marginal principle”, Pareto, Kaldor, and Rawlsian welfare criteria, Pareto optimality, static vs. dynamic efficiency, willingness to pay criterion, Contingent Valuation, Hedonic Property Values-Conjoint Analysis, Hedonic Wage Values-Choice Experiments, Avoidance Expenditures-Contingent Ranking,. Reserve Readings: Bator, Francis M. (1958), “Anatomy of Market Failure,” Journal of Political Economy, 72:3 (August), 351-379; Thomas J. Lareau and Douglas A. Rae, “Valuing WTP for Diesel Odor Reductions: An Application of Contingent Ranking Technique Southern Economic Journal 55:3, 728-742; Stern Review Impacts on Growth and Development. Datasets: Energy Resources. Classroom Case Studies: Basic Market Dynamics.
(2012/02/06) Class 3 – Text, Valuing the Environment: Methods I (34-49). Key concepts: Federal Energy and Regulatory Commission (FERC), ex ante vs. ex post valuation, causality vs. correlation in environmental and natural resource economics, stock vs. flow valuation, total willingness to pay (TWP) criterion, revealed vs. stated preferences, contingent valuation methods in stated preference valuation, willingness to accept (WTA) criterion, conjoint analysis states preference valuation, geographic information systems (GIS). Reserve Readings: Carson, Richard, and W. Michael Hanemann (2005). “Contingent Valuation”, in K.G. Maler and J.R. Vincent, editors, Handbook of Environmental Economics. (New York: North-Holland Publishers), pp. 821-936; Stern Review – Stabilization Economics, Nordhaus, William (2006), "The Stern Review on the Economics of Climate Change," (November). Datasets: World Fossil Fuel Consumption Application Modules: The Law of Variable Proportions; Basic Economic Efficiency. Classroom Case Studies:
(2012/02/08) Class 4 – Text, Valuing the Environment: Methods II (49-64). Key concepts: ethics in the valuation of human life, primary vs. secondary effects, tangible vs. intangible benefits, survey vs. engineering valuations, treatment of risk, expected present value of net benefits, the choice of a social rate of discount, cost-benefit vs. cost-effectiveness analysis, second equi-marginal principle (cost-effectiveness equi-marginal principle), impact analysis. Reserve Readings: McFadden, Daniel (1994). “Contingent Valuation and Social Choice,” American Journal of Agricultural Economics 76:4 (November), 689-708. Stern Review – Policy Mitigation Responses. Datasets: Energy Efficiency. Application Modules: Classroom Case Studies: The Basic Harrod-Domar Growth Model. Capital Budgeting Fundamentals
(2012/02/13)Class5 – Text, Property Rights, Externalities, and Environmental Problems (65-91). Key concepts: property rights, exclusivity, transferability, and enforceability of property rights, transition vs. developed, vs. emerging developing economies, total social welfare as consumer plus producer surplus, scarcity rent, negative vs. positive externalities, common property (res nullius) property regimes, pure public, quasi-public, versus pure private goods, biological diversity, genetic diversity, competitive vs. imperfectly competitive market structures, risk free vs. risk premium rate of return, rent seeking behavior, property rules and liability rules, the Coase theorem (1960). Reserve Readings: Coase, Ronald H. (1960), “The Problem of Social Cost”, Journal of Law and Economics (October), 1-44. Datasets: U.S. Carbon Dioxide Emissions. Application Modules: Externalities Classroom Case Studies: The Millet Mill Project (NPV, IRR). The Social Rate of Return (SNPV, SRR).
(2012/02/15) Class 6 – Text, Dynamic Efficiency and Sustainable Development (92-107). Key concepts: dynamic vs. static economic efficiency, discrete vs. continuous time models, Rawlsian inter-temporal fairness, the Hartwick rule of environmental sustainability, natural vs. physical capital, weak vs. strong sustainability, environmental sustainability. Reserve Readings: Goodland, Robert (1995). "The Concept of Environmental Sustainability," Annual Review of Ecology and Systematics 26, 1-24; LeBel, P. (1999), "Measuring Sustainable Economic Development in Africa," Scandinavian Journal of Development Alternatives, 18:2-3 (June-September), 265-282. Datasets: Application Modules: Risk and Economic Growth. Classroom Case Studies:
(2012/02/20) Class 7 – Text, The Population Problem (108-133). Key concepts: the Paul Ehrlich vs. Julian Simon debate, Thomas R. Malthus Essay on Population (1798), David Pimentel’s optimum population, total fertility rate, stationary population, replacement rate, age-structure effects, youth effect, retirement effect, female availability effect, law of diminishing returns, the population/environmental connection, the theory of demographic transition, microeconomic theory of fertility, UNEP (UN Environmental Program), UNFPA (UN Population Fund). Reserve Readings: Ehrlich, Paul R. and Anne E. Ehrlich (2009). “The Population Bomb Revisited,” The Electronic Journal of Sustainable Development 1:3, 63-71; Feldstein, Martin, and Elena Ranguelova (2001). "Individual Risk in an Investment-Based Social Security System," American Economic Review, 91:4 (September), 1116-1125.Datasets: Global Population Data. Application Modules: Pension Systems. Classroom Case Studies:
(2012/02/22) Class 8 – Text, The allocation of Depletable and Renewable Resources (134-155). Key concepts: feedback mechanisms, a taxonomy of natural resource reserves (current proven, potential, inferred and speculative), recyclable vs. non-recyclable resources, depletable vs. renewable resources, two-period vs. n-period constant cost depletable resource discrete-time model, two-period vs. n-period increasing cost depletable resource discrete-time model, extraction costs, technological progress, marginal cost of exploration, backstop technologies. Reserve Readings: Federal Trade Commission (1973). “The Petroleum Industry: Structure and Conduct”, in Mansfield, Microeconomics Readings, (326-341); Coase, Ronald H (1937), “The Nature of the Firm,” Economica, New Series 4:16 (November), 386-405. Datasets: Energy - Crude Oil Prices Application Modules: Exhaustible Resource MultiPeriod Model Classroom Case Studies: Optimal Pricing of Exhaustible Resources V.1
(2012/02/27) Class 9 – Text, Energy: The Transition from Depletable to Renewable Resources (156-191). Key concepts: Hubbert’s peak, Phillips Petroleum Co. v. Wisconsin 1954 Supreme Court case, OPEC, the total revenue test and the own-price elasticity of demand, own-price vs. income elasticity of demand and supply, natural security risks, SPR (Strategic Petroleum Reserve), unconventional oil, coal, and nuclear energy, alternative electricity pricing models and policies, peak-load pricing, time of day pricing, tradable energy certificates (TEC), energy vs. economic efficiency, wind, photo-voltaics, active and passive solar energy, ocean tidal power, biomass, geothermal energy, hydrogen energy, the Price-Anderson Act of 1957, Three-Mile Island (1979), Chernobyl (1986), Katrina (2005). Reserve Readings: LeBel, P. (2005).  "Optimal Pricing of Biodiverse Natural Resources for Sustainable Economic Growth," Journal of Development Alternatives, 24:1-2 (March-June), 5-38. Datasets: World Roundwood Production Application Modules: Renewable Natural Resources Single Species Dynamics; Biodiversity Index Classroom Case Studies: Renewable Natural Resource Optimization; Static Natural Resource Optimization
(2012/02/29) Class 10 –Text, Recyclable Resources: Minerals, paper, Bottles, and E-Waste (192-214). Key concepts: Extraction vs. disposal costs, composition of demand effect, Bureau of International Recycling (BIR), the elasticity of substitution and environmental sustainability, “bottle bills”, landfill permit pricing, e-waste recovery of materials from cell-phones, computers, and other electricity products. Reserve Readings: Borenstein, Severin, James Bushnell, and Frank Wolak (2001).  "Measuring Market Inefficiencies in California's Restructured Wholesale Electricity Market," paper presented at the ASSA conference in Atlanta, Georgia (January). Datasets: Application Modules: Optimal Investment Storage. Classroom Case Studies:

Research Paper Topic Selection Deadline – printed 1 page statement with questions to be answered and stated rationale


(2012/03/05) Class 11 – Text, Replenishable but Depletable Resources: Water I (215-231). Key concepts: the earth’s hydrologic cycle, surface vs. groundwater withdrawals, efficient vs. effective allocation of scarce water, groundwater mining from aquifers, riparian and prior appropriation doctrines, usufruct rights, water transfer systems, federal reclamation projects and agricultural water pricing, municipal and industrial water pricing, in-stream flows, common property problems. Reserve Readings: Bojö, J., J. Mucknall, K. Hamilton, N. Kishor, C. Kraus, and P. Pillai (2001).  "Environment", Draft Framework for Environmental Policy.  (Washington, D.C.:  The World Bank). Datasets: Water and Economic Growth Application Modules: Classroom Case Studies:
(2012/03/07) Class 12 – Text, Replenishable but Depletable Resources: Water II (232-242). Key concepts: volumetric, output, input, per-area, block-rate, two-part and water market pricing systems, public vs. private ownership of water resources. Reserve Readings: Ackerman, Frank and Elizabeth Stanton (2006).  "Climate Change – the Costs of Inaction," (Medford, Mass.: Tufts University Global Development and Environment Institute). Datasets: International Clean Water Access Rates, 1980-2005; Application Modules: Classroom Case Studies:
(2012/03/12) Class 13 – Text, Land Economics (243-266). Key concepts: bid rent land functions, land use conversion, sprawl and leapfrogging land use behavior, public infrastructure issues, undervaluation of environmental amenities, Henry George and the single tax movement, impacts of land taxes on land use, inheritance tax problems, frustration of public purpose problem, secure vs. insecure property rights, Kelo v. City of New London, Conn. Public purpose land use decision, market vs. government failure in land use decisions, transferable development rights (TDR), wetlands banking, conservation banking, safe harbor agreements, grazing rights, conservation easements, land trusts, ecotourism. Reserve Readings: Krautkraemer, Jeffrey A. (1998).  "Nonrenewable Resource Scarcity," Journal of Economic Literature, 36:4 (December), pp. 2065-2107. Datasets: Application Modules: Tropical Timber Model. Classroom Case Studies:
(2012/03/14) Class 14 – Mid-Term Examination, text (1-266), plus selected reserve readings and classroom case study materials.
(2012/03/19-03/23) – Spring Break
(2012/03/26) Class 15 – Text, Reproducible Private-Property Resources: Agriculture I (267-281). Key concepts: Food and Agriculture Organization (FAO), Rome Declaration on World Food Security (1996), weak vs. strong form global scarcity hypothesis, changing patterns in U.S. agriculture, external costs of U.S. agricultural productivity, ethanol pricing distortions in U.S. agriculture, genetically modified organism agriculture (GMO) vs. organic agriculture, EU vs. U.S. agricultural standards on organic vs. chemical and genetically modified agriculture. Reserve Readings: Dasgupta, Partha (2006).  "Comments on the Stern Review's Economics of Climate Change",  (London, U.K.:  Royal Society Foundation for Science and Technology). Datasets: Application Modules: The Cobweb Model. Classroom Case Studies:

Research Paper Preliminary Bibliography Submission Deadline – printed, with at least 10 sources, no more than three from internet sole sources


(2012/03/28) Class 16 – Text, Reproducible Private-Property Resources: Agriculture II ( 282-295). Key concepts: marketing loan programs, counter-cyclical program payments, direct payments in agriculture, GMO and nutritional standards in developing countries, comparative advantage in food production and trade, the cobweb model and agricultural production and pricing risk, buffer stock vs. forward and option pricing in agricultural markets. Reserve Readings: Datasets: Application Modules: Classroom Case Studies: Commodity Price Stabilization
(2012/04/02) Class 17 – Text, Storable, Renewable Resources: Forests (296-321). Key concepts: timber harvesting end uses, optimal timber harvesting, stumpage values, timber species biodiversity criteria, timber harvesting and climate change, sustainable forestry, timber certification policies, debt-nature swaps, NGO vs. government agency management of forest resources, extractive reserves, conservation easements and land trusts, the World Heritage Convention (1972), royalty payments, carbon sequestration credits, habitat trust funds. Reserve Readings: Lovins, Amory, L. Hunter Lovins, and Paul Hawken (1999).  "A Road Map for Natural Capitalism," Harvard Business Review, (May-June), 146-158. Datasets: Global Climate Indicators; World Roundwood Production; Application Modules: Classroom Case Studies:
(2012/04/04) Class 18 – Text, Common-Pool Resources: Fisheries and Other Commercially Valuable Species (322-355). Key concepts: bio-diverse interactive resources, natural equilibrium, stable equilibrium, minimum viable population, sustainable yield, maximum sustainable yield population, static efficient sustainable yield, dynamic efficient sustainable yield, aquaculture, public vs. private ownership in aquaculture, individual transferable quotas (ITQ’s), marine protected areas, offshore ocean limit standards, poaching. Reserve Readings: Newell, Richard G., James N. Sanchirico, and Suzi Kerr (2002).  "Fishing Quota Markets," Discussion Paper 02-20. (Washington, D.C.:  Resources for the Future); Gylfason, Thorvaldur, and Martin L. Weitzman (2003).  "Icelandic Fisheries Management:  Fees vs. Quotas," Conference paper, Iceland and the World Economy: Small Island Economies in the Era of Globalization.  (Cambridge, Mass.:  Harvard University Center for International Development). Datasets: Chesapeake Bay Marine Harvests; World Fish Consumption; Application Modules: Classroom Case Studies:

Research Paper Preliminary Outline Submission Deadline – printed, demonstrating integration of revised bibliographic sources with topics based on initial questions to be addressed.


(2012/04/09) Class 19 – Text, Economics of Pollution Control: An Overview (356-389). Key concepts: stock vs. fund pollution, environmental taxation of pollution, cost-effective pollution control policies, emission standards, emission charges, emissions trading, non-uniform mixed surface pollutants policy choices, ambient standards, single-receptor choices, ambient allowance system, emission allowance system, many receptor case, instrument choice under uncertainty. Reserve Readings: Acemoglu, Daron and Thierry Verdier (2000).  "The Choice Between Market Failures and Corruption," American Economic Review, 90:1 (March), 194-211. Datasets: World Vehicle Production; Application Modules: Basic Cost Benefit Analysis Classroom Case Studies:
(2012/04/11) Class 20 – Text, Stationary-Source Local Air Pollution (390-412). Key concepts: command and control policies, national ambient air-quality standards, New Source Performance Standards (NSPS), threshold effects, particulate and smog ambient standards, offset programs, smog trading, Regional Clean Air Incentives Market (RECLAIM). Reserve Readings: Datasets: World Nuclear and Renewable Energy; U.S. Carbon Dioxide Intensity Application Modules: Classroom Case Studies:
(2012/04/16) Class 21 – Text, Regional and Global Air Pollutants: Acid Rain and Atmospheric Modification (413-437). Key concepts: acid rain, trans-boundary problems, Congressional Budget Office (CBO), sulfur emissions, sulfur allowance program, ozone depletion, CFC-11, CFC-12, tradable permits for ozone-depleting chemicals, Koto Protocol (1997), UN Framework Convention on Climate Change (UNFCCC), emissions trading, joint implementation framework, clean development mechanism, European Union Emissions Trading System (EU ETS), prototype carbon fund (PCF). Reserve Readings: Datasets: Application Modules: Tradable Pollution Permits Classroom Case Studies:
(2012/04/18) Class 22 – Text, Mobile-Source Air Pollution (438-462). Key concepts: stationary vs. mobile-source air pollution, implicit subsidies on air pollution, externalities, certification program, associated enforcement program, Clean Air Act Amendments of 1977, Corporate Average fuel Economy (CAFÉ) of 1975, methyl tertiary butyl ether (MTBE) additive, inspection and maintenance programs, lead phase-out programs, fuel taxes, congestion pricing, private toll roads, parking cash-outs, pay-as-you-drive insurance (PAYD), accelerated retirement strategies (“cash for clunkers”). Reserve Readings: Easterbrook, Gregg (2007).  "Global Warming:  Who Loses-And Who Wins?", The Atlantic Monthly (April), 1-8. Datasets: U.S. Superfund Sites; Application Modules: Classroom Case Studies:
(2012/04/23) Class 23 – Text, Water Pollution (463-494). Key concepts: types of waste-receiving water, sources of contamination, fund pollutants, dissolved oxygen (DO), biochemical oxygen demand (BOD), thermal pollution, stock pollutants, Water Pollution Control Act of 1948, Water Quality Act of 1965, non-point source pollution, Safe Drinking Water Act (1974), uniform treatment (UT) vs. uniform emission charge (UEC), vs. zoned effluent charge (ZEC). Reserve Readings: Golan, Elise, Fred Kuchler, and Lorraine Mitchell (2000).  "Economics of Food Labeling".  (Washington, D.C.:  Economic Research Service, U.S. Department of Agriculture, Agricultural Economic Report No. 793). Datasets: U.S. Municipal Solid Waste; Application Modules: Classroom Case Studies:
(2012/04/25) Class 24 – Text, Toxic Substances (495-522). Key concepts: Hooker Chemical Love Canal pollution case, carcinogens, occupational hazards, common law, negligence vs. strict liability, criminal law and the environment, statutory law, Federal Food, Drug, and Cosmetic Act, Occupational Safety and Health Act (OSHA), Federal Environmental Pesticide Control Act (FEPCA), Resource Conservation and Recovery Act (RCRA), Toxic Substances Control Act (TSCA), Comprehensive Environmental Response, Compensation, and Liability Act (Superfund Act), Toxic Release Inventory (TRI), Pollutant Release and Transfer Registers (PRTR), National Pollutant Release Inventory (NPRI), Basel Convention on the Control of Transboundary Movements of Hazardous Waste and Their Disposal (1989), joint and several liability doctrine. Reserve Readings: Datasets: World Metals Production; U.S. High-Level Nuclear Waste; U.S. Low-Level Nuclear Waste. Application Modules: Classroom Case Studies:
(2012/04/30) Class 25 – Text, Environmental Justice (523-548). Key concepts: horizontal vs. vertical equity, progressive, regressive, vs. proportional taxation systems, Not in My Backyard (NIMBY) responses, risk perception, competitive vs. monopoly markets under pollution control cost conditions. Reserve Readings: UNCTAD (1998).  Greenhouse Gas Emissions Trading:  Defining the Principles, Modalities, Rules and Guidelines for Verification,  Reporting and Accountability, (Geneva, Switzerland:  UNCTAD). Datasets: Generosity Index 2001; Generosity Index 2004; U.S. Income Inequality Trends Application Modules: Classroom Case Studies: Income Distribution.

Research Paper submission deadline – two versions to be submitted: a. printed; b. electronic to MSU email address on syllabus.
(2012/05/02) Class 26 – Text, Development, Poverty, and the Environment (549-576). Key concepts: economies of scale vs. economies of scope, technological progress in natural resource use, “natural resource curse” hypothesis, the information economy, the growth-development relationship, Net Domestic Product, current vs. constant dollar GDP, adjusted net savings, wealth estimates, genuine progress indicator (GPI), ecological footprint analysis, human development index (HDI), income inequality vs. poverty, debt and environmental tradeoffs. Reserve Readings: Tietenberg, Tom (2003).  "The Tradable-Permits Approach to Protecting the Commons:  Lessons for Climate Change," Oxford Review of Economic Policy, 19:3, 400-420.Datasets: G-20 Group of Countries.; U.S. GDP, NNP, NI, and PI, 1929-2008; Human Development Index 2004 Application Modules: Excise Taxation; Excise Tax Criteria; Excise Tax Optimization. Classroom Case Studies: Externalities Case Study
(2012/05/07) Class 27 – Text, The Quest for Sustainable Development (577-602). Key concepts: sustainable development notions, efficiency and sustainability, Pollution composition, technique, and scale effects, the Porter “induced innovation” hypothesis, the environmental Kuznets curve (EKC), NAFTA, GATT vs. WTO framework, cost-effectiveness and property rights principles in development sustainability strategies. Reserve Readings: Datasets: Global Temperatures; Global Energy Intensity. Application Modules: Externalities Optimal Management Model; Optimal Taxation of Negative Externalities Classroom Case Studies:
(2012/05/09) Class 28 – Text, Visions of the Future Revisited (603-614). Key concepts: the relativity of “running out” of resources, Green building technologies, profitability of sustainable practices, public and private partnerships in development. Reserve Readings: Datasets: Application Modules: Thermodynamics and Exhaustible Resource Transition Dynamics; Do Types of Taxation Affect Real Per Capita GDP?; Voting Systems Classroom Case Studies:

Texts on Natural Resource Economics

Faber, Malte, Reiner Manstetten, and John Proops (1996). Ecological Economics: Concepts and Methods. (Brookfield, Vermont: Edward Elgar Publishing Company).

Field, Barry C. (2001). Natural Resource Economics: An Introduction. (New York: McGraw-Hill).

Field, Barry C. (2006). Environmental Economics: An Introduction, fourth edition. (New York: McGraw-Hill).

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