Course Outline and Syllabus
Economics 423 -- Environmental and Natural Resources Economics
Professor Steven C. Hackett
Humboldt State University

Fall 2007

Office, Contact, and Other Information:

  • Office Location: Siemens Hall 206c.
  • Office Consultation Hours: Tues/Thurs 4-5 pm, Wed 9-10 am, and by appointment. Please make an effort to see me during these stated office hours.
  • Telephone Number: 826-3237.
  • E-Mail: hackett [at] humboldt.edu
  • Course Internet site: http://www.humboldt.edu/~envecon (Ask Prof. Hackett for user name and password in class)
  • HSU Admissions and Records (Schedule of Classes, academic calendar, etc.)

Learning Objectives:

To develop your critical thinking and analytical reasoning skills in the following areas:

  • The fundamentals of economics: scarcity, choice, and opportunity cost.
  • Basic ethics, value systems, and the normative foundations of economics and other social systems.
  • The requirements and equilibrium characteristics of a well-functioning competitive market, the interpretation of gains from trade and efficient resource allocation, and the conditions under which markets fail.
  • Discussion of property rights, including recreational access, and how the distribution of property rights affects who pays for land conservation or regulatory protections.
  • The economics of externalities.
  • Welfare analysis of the market inefficiency caused by negative externalities (4th unit, Econ/Bus majors)
  • The role of pollution taxes and other regulatory schemes in resolving the inefficiency due to negative externalities.
  • The economics of natural resources, including dynamically efficient production (4th unit, Econ/Bus majors), the optimal management of both renewable and non-renewable resources, and the governance issues associated with overcoming the tragedy of the commons. Application to fisheries or other locally relevant common-pool resource.
  • Issues and techniques associated with measuring the value of non-marketed aspects of the environment, with emphasis on recreational area valuation and the travel cost method.
  • The methods (and shortcomings) of benefit/cost analysis.
  • The political economy of environmental regulation and natural resources management.
  • The economics of assuring environmental compliance.
  • Methods of regulation that harness the incentives of markets, with special emphasis on marketable pollution allowances.
  • An environmental economic analysis of global climate change.

Additional Learning Objectives:

  • To enhance your analytical, research, and written communication skills by writing an objective term paper essay.
  • To enhance your presentation skills by constructing a poster that presents key points of your research, and participating in a class-wide poster session at the end of the semester (see Econ Dept office, SH 206, for good poster examples).

It is possible to succeed in this course without having done any previous study of economics, but you will have a bit more work ahead of you than those who do have an economics background. Emphasis is given to respecting diverse viewpoints and perspectives.

Textbook:

Hackett, Steve, Environmental and Natural Resources Economics: Theory, Policy, and the Sustainable Society, (3rd Edition, M.E. Sharpe, Publishers, 2006). Note that the first and second editions of the textbook are not a satisfactory substitutes for the third edition.

Topical Outline and Class Calendar:

Week 1 (21 & 23 Aug): Chapter 1--Introduction to Environmental and Natural Resources Economics

Week 2 (28 & 30 Aug): Chapter 2--Value Systems and Economic Systems

For further reading on the Internet:

 

·                    Internet Classics Archive (http://classics.mit.edu/Browse/index.html)

·                    McMaster U. History of Economic Thought Archive (http://socserv.mcmaster.ca/econ/ugcm/3ll3/)

Week 3 (04 & 06 Sept): Chapter 3--The Economics of Market Allocation

For further reading on the Internet:

·                    Antitrust Division of the U.S. Department of Justice (http://www.usdoj.gov/atr/index.html)

·                    European Union Competition Policy Website (http://europa.eu.int/comm/competition/index_en.html)

·                    Hayek Research Website (http://www.hayekcenter.org/friedrichhayek/research.html)

Week 4 (11 & 13 Sept): Finish Chapter 3, start Chapter 4--Externalities

For further reading on the Internet:

·                    EPA’s National Center for Environmental Economics (http://yosemite1.epa.gov/ee/epa/eed.nsf/pages/homepage)

·                    Environmental Externalities in Electric Power Markets: Acid Rain, Urban Ozone, and Climate Change (http://www.eia.doe.gov/cneaf/pubs_html/rea/feature1.html)

Week 5 (18 & 20 Sept): Quiz 1. Finish Chapter 4, start Chapter 5--The Economics of Natural Resource Systems Part I: Theory and Concepts. NOTE: Also read the parts of Chapter 15 having to do with local self-governance of common-pool resources (p. 454-62). One-page outlines of term papers are due Thurs!

For further reading on the Internet:

·                    Energy and Resources Group, UC-Berkeley (http://socrates.berkeley.edu/erg/index.shtml)

·                    Economic Sustainability and Scarcity of Natural Resources (http://www.rff.org/Documents/RFF-IB-00-tahvonen.pdf)

·                    Racing for Crabs (http://californiaagriculture.ucop.edu/0404OND/pdfs/crabs.pdf)

·                    The Value of the World’s Ecosystem Services and Natural Capital (http://www.esd.ornl.gov/benefits_conference/nature_paper.pdf)

·                    Economic Reasons for Conserving Wild Nature (http://www.sciencemag.org/cgi/content/abstract/297/5583/950)

Week 6 (25 & 27 Sept): Chapter 5--The Economics of Natural Resource Systems Part I, continued. Focus on CA energy crisis, recycling economics, intuition on dynamic efficiency

Week 7 (02 & 04 Oct): Tues: Review for first midterm exam. First midterm exam Thurs! (Note that unlike some of the past first midterm exams on the course website, this first midterm includes coverage of Chapter 5).

Week 8 (09 & 11 Oct): Chapter 5 –Gordon model of a fishery; common-pool resource economics

Week 9 (16 & 18 Oct): Chapter 7--Measurement and Analysis of Benefits and Costs (summary coverage of key concepts; discuss CA Energy Comm. study on Klamath dams)

For further reading on the Internet:

 

·                    EPA's Guidelines for Preparing Economic Analyses (http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/Guidelines.html)

·                    Resources for the Future’s Cost Benefit Analysis Website (http://www.rff.org/rff/Cost-BenefitAnalysis.cfm)

·                    Elwha River Ecosystem Restoration Environmental Impact Statement and other documents

·                    California Energy Commission study of dam re-licensing and decommissioning options for the Klamath Basin hydroelectric project: http://www.energy.ca.gov/2006publications/CEC-700-2006-010/CEC-700-2006-010.PDF.

·                    Addendum to California Energy Commission study of dam re-licensing and decommissioning options for the Klamath Basin hydroelectric project: http://www.energy.ca.gov/2007publications/CEC-700-2007-004/CEC-700-2007-004.PDF.

Week 10 (23 & 25 Oct): Chapter 8--The Political Economy of Environmental Regulation and Resource Management.

For further reading on the Internet:

·                    Federal Elections Commission Campaign Finance Reports (http://www.fec.gov/disclosure.shtml)

·                    National Institute on Money in State Politics (http://www.followthemoney.org/)

·                    Montreal Protocol for Substances that deplete the Ozone Layer (http://ozone.unep.org/Treaties_and_Ratification/2B_montreal_protocol.shtml)

·                    Keohane et al: The Positive Political Economy of Instrument Choice in Environmental Policy (http://www.rff.org/Documents/RFF-DP-97-25.pdf)

Week 11 (30 Oct & 01 Nov): Quiz 2. Chapter 9--Motivating Regulatory Compliance: Monitoring, Enforcement, and Sanctions.

For further reading on the Internet:

·                    Code of Federal Regulations (http://www.gpoaccess.gov/cfr/index.html)

·                    Cornell University Legal Information Institute's Coverage of Environmental Law (http://www.law.cornell.edu/topics/environmental.html)

·                    EPA Compliance and Enforcement Portal (http://www.epa.gov/compliance/)

Week 12 (06 & 08 Nov): Chapter 10--Creating Incentives for Environmental Protection and Resource Management (focus on cap-and-trade). Final term papers due Thurs!

For further reading on the Internet:

·                    Clean Air Markets (http://www.epa.gov/airmarkets/)

·                    Stavins: Experience with Market-Based Environmental Policy Instruments (http://www.rff.org/Documents/RFF-DP-01-58.pdf)

·                    International Experiences with Economic Incentives for Protecting the Environment (http://yosemite.epa.gov/ee/epa/eermfile.nsf/vwAN/EE-0487-01.pdf)

 

Additional Optional Reading: "Environmental Policy Since Earth Day I: What Have We Gained?" Freeman, Journal of Economic Perspectives 16 (Winter 2002): 125-146.

Week 13 (13 & 15 Nov): Tues: Review for second midterm exam. Second midterm exam Thurs!

*** Thanksgiving break week – no class on 20 & 22 Nov ***

Week 14 (27 & 29 Nov): Chapter 11--Global Climate Change: Science, Policy, and Economics

Week 15 (04 & 06 Dec): Posters due for poster session Tues! Thurs--grades, final exam comments, course evaluation

Week 16 (10 – 14 Dec): Optional final exam – 9:30 class has its final on Thurs 13 December from 8 to 9:50 am in the classroom. 11:00 class has its final on Tues 11 December from 10:20 to 12:10 in the classroom..

Policies, Procedures, and Responsibilities

My responsibility as professor is to lead and motivate students who are committed to the learning process, and to determine the extent to which students have mastered the material covered in this course. I aim to be courteous, respectful, and responsive to student needs. Grades are assigned based on my professional judgment of the quality of your work and are not subject to negotiation. Students are responsible for their learning outcomes and their performance on all assignments. Students are expected to attend class regularly and on time, are expected to be active learners who contribute to the classroom discussion, and are expected to be courteous and respectful of others. Please contact me if you have a problem or a conflict relating to the course. Late or missing work will receive a grade of 0. All of us are subject to HSU and CSU policies, which include nondiscrimination, academic honesty, student discipline, and family educational rights and privacy.

It is my goal to create a friendly, inclusive, and rigorous classroom culture in which everyone is welcome to comment and contribute, and in which diversity is respected. I want this to be a class that we all look forward to attending, and that we can look back upon as having been a very positive experience.

Grading:

Class Participation Exercises & Homework (10 percent total):

We will have a variety of class participation exercises and homework. While this work will be turned in, it will not be graded – these are activity points only. NOTE: You cannot get class participation points if you do not attend class when we do the exercise.

Quizzes (10 percent total):

There will be two quizzes during the semester, one before each examination. Each quiz is worth 5 percent of your total grade. Click here to see old quizzes with answers.

Mid-Term Examinations (25 percent each, 50 percent total):

You will be asked to sit for two mid-term examinations. The format of these exams may include short answer, matching, and computational problem-solving. Click here to see old midterm exams with answers.

Research Paper (25 percent total; 5 percent for outline, 20 percent for final research paper):

You will write a research paper. The assignment begins with a one-page outline of your planned research project, which is worth 5 percentage points. Building on this outline, you then write a short (target length of 7 double-spaced pages of text; do NOT exceed) word-processed research paper worth 20 percentage points. Examples of some strong research papers from past semesters are given in the student essays component of the course Internet site. Research paper requirements: All research papers will have a paper cover page (please, no plastic covers or binders!) listing title, author, course and professor, and date, 6 -7 pages of double-spaced text with font size of 10 - 12, margins of at least 3/4 of an inch, and with pages numbered (have sources cited in the text as follows: "Smith (1996) stated..."), a list of authoritative sources cited in the narrative (a minimum of 5, preferably more; Wikipedia does not count as an authoritative source), and any tables, figures, or other appendix material you would like to include (not a place to dump more text). Staple your essay in the upper left-hand corner--no plastic covers or binders! It is recommended that you discuss your topic with me beforehand, which will allow you to get feedback from me and likely improve your grade. Please note that the grade of "A" is reserved for work that is truly an outstanding achievement. In contrast, "B" refers to work that is more than satisfactory ("C") but not quite an outstanding achievement. Your research paper grade will be determined based on (1) mastery of economic concepts, degree of economic sophistication, and the quality of your description of the linkages between the economic concept and the environment or natural resources, (2) quality of writing, and (3) thoroughness of your research. Click here to see the grading rubric I will use on your research paper.

Poster Session (5 percent):

You will prepare of a poster that summarizes your research paper. Posters should be sufficiently large as to include the title and author's name, summary narrative in easy-to-read format, substantial economic content, accompanying pictures or diagrams or numerical examples, and key references cited. Posters will be displayed in class and a "poster session" will be held in which students can freely circulate in an unstructured setting and see other people's work. Posters will be graded based on each of the elements above and on quality of layout and graphics.

Optional Final Examination (25 percent):

You may elect to sit for the comprehensive final examination, which is optional. A student's grade on the final will ONLY count if it exceeds one of her/his mid-term exam scores, in which case it will replace that score. Students can elect not to take the final if their mid-term exam scores are satisfactory.

Final Grade:

Numerical scores between 0 and 100 are assigned for each graded item. Your overall course numerical score is equal to the weighted sum of your numerical scores on each graded element of the course:

Course Numerical Score = 0.10*(Class Participation Score) + 0.10*(Quiz Scores) + 0.05*(First Draft of Research Paper Score) + 0.25*(First Midterm Exam Score) + 0.20*(Research Paper Score) + 0.25*(Second Midterm Exam Score) + 0.05*(Poster Session Score).

Note: The optional final exam score replaces the lowest midterm exam score if it exceeds it.

Your overall course numerical score will then be converted into a letter grade for the course based on the following scale:

100 - 93: A
92.99 - 90: A-
89.99 - 88: B+
87.99 - 83: B
82.99 - 80: B-
79.99 - 78: C+
77.99 - 73: C
72.99 - 70: C-
69.99 - 68: D+
67.99 - 60: D
59.99 - 0: F