ECON 3545-200 Environmental Economics

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ECON 3545-200 Environmental Economics
Department of Economics
Environmental Economics-ECON 3545-200, Summer, 2013 B
Office Hours:
Steven M. Smith
ECON 307
[email protected]
M-F: 9:15-10:50am, July 9-August 9, ECON 117
M-Th 11:00am-12:00pm and by appointment.
Course Description
At a fundamental level, the environment is the ultimate source of scarcity. The earth provides all the
material for anything ever produced and the energy to do so. As such, environmental quality has
become a major focus of public concern. At the heart of the matter is the sustainability of our economic
growth and its interaction with the carrying capacity of the earth. Numerous environmental agencies
have been established to influence environmental policy. Politicians now must include environmental
issues as part of their agenda. Specialized fields have emerged to allow engineers, scientists, lawyers,
and economists to focus their efforts on analyzing and solving environmental problems.
This course is designed to extend your economic understanding by studying the economic approach to
analyzing and solving environmental problems. Environmental economics focuses on the study of
externalities, particularly pollution and other non-market goods (and bads). Economics is crucial in
understanding the human behavior which leads to these externalities as well as the possible solutions.
Even where markets fail, economics still provides powerful tools to study the decisions of how to
allocate scarce resources. Over the course of the semester we will consider how the economy and the
environment impact one another, especially the connection with growth. We also address the role of
the role of property rights and externalities in the economy, learn to use cost-benefit analysis, discuss
how to discern the economic value of the environment, explore various sources of pollution and the
economic tools available to alter polluting behavior—including the political economy. In the end,
economics should provide you with an analytical tool with which to analyze possible environmental
The course will be a combination of learning the theory and models behind the concepts as well as
discussing real world examples.
Basic microeconomic knowledge is required. Students must have taken ECON-1000 or ECON 2010. In
addition, the course is for non-econ majors.
This course requires basic algebra tools. It will be assumed that students posses these and there will be
no formal math review.
Two books will be utilized in addition to articles posted on the course website.
Textbook: Tom Tietenberg & Lynne Lewis (2009). Environmental Economics & Policy, Pearson, 6th Edition
The textbook is considered required. Naturally, not all of the textbook will be covered in class. Reading
the book prior to lecture is a great way to make the learning process easier. You may want to consider
the ebook option, it is considerably cheaper. The CU bookstore has access codes for sale. The ebook
ISBN is: 0-321-60818-6
Essays and Articles: Robert N. Stavins (2012). Economics of the Environment: Selected Readings, Norton,
6th Edition
Other required short readings will be provided on the Desire 2 Learn course website.
Attendance of the first three classes is mandatory or you may be administratively dropped from the
course. Beyond this, no formal attendance will be taken. In many cases, lecture will extend beyond the
content of the textbook, so it is strongly encouraged you attend lecture. While lecture slides, when
used, will be provided on line, they are not exhaustive of what is covered in lecture. I would
recommend getting any additional notes from a classmate if you do miss class.
Grading Policies
There will be 5 components of your final grade.
Exam 1
Friday, July 19th
Exam 2
Saturday, August 9th
Monday, July 22nd—Proposal, Wednesday, August 7th—Final Draft
Homework 20%
Various Dates; see course schedule
Grading Scale
The exams will not be cumulative beyond the cumulative nature of the material. I do not give make-up
exams nor do I give exams early. If you do have a valid emergency which precludes you from taking the
exams on the given date your final score will be recalculated reweighting the other components. Please
communicate any conflicts with exam dates immediately, you will find instructors are a lot more flexible
when you do not wait until the last minute to deal with conflicts. The exams will be a mixture of
multiple choice and short answer questions. Finally, no cell phone calculators are permitted for exams.
Please bring a basic calculator or be prepared to do calculations with pen and paper.
Over the semester there will be 3 problem sets and multiple reading assignments. No late assignments
will be accepted and no assignment will be dropped from your grade. Grading will be done on a
completion basis (note that quality can still be considered).
Problem Sets: As we progress through the semester I will post 3 problem sets on the course website. A
hard copy is due at the beginning of class on the given date. They are intended to apply the theory and
concepts from the textbook and lecture and help prepare you for the exams. I encourage you to work in
small groups on these assignments, though I require everyone to turn in their own copy. Each problem
set will make up 4% of your overall grade.
Article Summaries: You will be reading an original articles throughout the semester. For each one, you
will need to write up a short summary ( ½ -1 page single spaced). The summaries will be due prior to the
beginning of class on the day it is to be discussed. Official due dates will be announced in class, though
the articles are tentatively scheduled below. The summaries will be due prior to the designated class
submitted on the course website. The summaries will collectively account for 8% of your grade.
The final portion of your grade will be a paper or proposal. It may be completed with one partner if you
wish to team up. I expect the paper to be 3-6 single spaced pages. The subject matter is up to you, so
long as it is related to environmental economics. You may choose to either analyze a current or
historical issue in environmental economics using the tools and models from class or create a proposal
for a research project on an environmental issue. A short document will be due on Monday, July 22nd
identifying intended topic. Further details will be provided concerning my expectations of the project.
Tentative Course Schedule
Due dates and exam dates are firm. Topic coverage is subject to change.
July 10
July 11
Textbook Ch.
The Sustainability Problem and
Ch. 1 & 5
CH. 6
Property Rights and Coase
CH. 4
July 12
Property Rights and Coase
-Coase (1960)
July 15
Cost-Benefit Analysis
July 16
July 17
Valuing the Environment
Valuing the Environment
July 18
July 19
Exam 1
July 22
Economics of Pollution
July 23
Pollution Control Instruments
July 9
-Stavins & Fullerton (1998)
-Solow (1992)
-Malthus (1798)*
Week 2
CH. 2
CH. 3
Week 3
CH. 14
-Kelman (1981) and responses
-Hanemann (1994)
-Diamond & Hausman (1994)
Problem Set 1 Due
-Sandel (1997) and responses
Proposal Due
July 24
Pollution Control Instruments
-Keohane (2009)*
-Metcalf (2009)*
July 25
July 26
Stationary Sources
Mobile Sources
July 29
July 30
July 31
Water Pollution
Climate Change
Climate Change
August 1
August 2
Development and the Environment
Development and the Environment
CH. 15
CH. 17
Week 4
CH. 18
CH. 16
CH. 21
CH. 20 (skip p.
Week 5
August 5
Payment for Environmental Services
August 6
Accounting for the
CH. 20 (p. 458Environment/Presentations
August 7
Project Presentations
August 8
August 9
Final Exam
*Reading not in Economics of the Environment made available on D2L
-Mankiw (2006)*
-Bennett (2000)*
Problem Set 2
-Nordhaus (2007)
-Stern & Taylor (2007)
-Frankel (2004)
-Kallis et al. (2012)*
-Speth (2012)*
-Alston et al. (2013)*
-World Bank (2010)*
Project Due
Problem Set 3
Office Hours
These are for your benefit, please take advantage of them. It is an excellent opportunity to get
individual or small group help to clarify concepts from class. If my office hours do not work for you due
to another class or work, please email me and we can arrange a time to meet.
Please use email wisely. It will be your best option to communicate with me outside of office hours and
lecture. I will do my best to respond to emails in a timely fashion, usually less than 24 hours. If your
question has to do with clarification, it may be difficult to explain fully over email, so I will suggest
coming to office hours. If I feel the entire class could benefit from the clarification, I will do so in lecture.
Finally, I will be hesitant to answer emails which ask something administrative which is included on the
syllabus, i.e. “when is the exam?” or “are any assignments dropped?”
University Policies
Students with Disabilities
If you qualify for accommodations because of a disability, please submit to me a letter from Disability
Services so that your needs may be addressed. Disability Services determines accommodations based on
documented disabilities. University policies regarding disabilities are available at
www.colorado.edu/disabilityservices/. Disability Services can be contacted by telephone at (303) 492
8671 or in person at Willard 322.
Religious Observances
Campus policy regarding religious observances requires that faculty make every effort to deal
reasonably and fairly with all students who, because of religious obligations, have conflicts with
scheduled exams, assignments, or required attendance. If you have a conflict due to a religious
obligation, please see me at least one full week in advance so that alternate arrangements can be
made. Policies regarding religious observances are available at
Classroom Behavior
Students and faculty each have responsibility for maintaining an appropriate learning environment.
Those who fail to adhere to such behavioral standards may be subject to discipline. Professional
courtesy and sensitivity are especially important with respect to individuals and topics dealing with
differences of race, culture, religion, politics, sexual orientation, gender, gender variance, and
nationalities. Class rosters are provided to the instructor with the student's legal name. I will gladly
honor your request to address you by an alternate name or gender pronoun. Please advise me of this
preference early in the semester so that I may make appropriate changes to my records. Polices
regarding classroom behavior are available at http://www.colorado.edu/policies/classbehavior.html and
at http://www.colorado.edu/studentaffairs/judicialaffairs/code.html#student_code.
Discrimination and Harassment
The University of Colorado at Boulder policy on Discrimination and Harassment, the
University of Colorado policy on Sexual Harassment, and the University of Colorado policy on Amorous
Relationships apply to all students, staff, and faculty. Any student, staff, or faculty member who believes
s/he has been the subject of sexual harassment or discrimination or harassment based upon race, color,
national origin, sex, age, disability, creed, religion, sexual orientation, or veteran status should contact
the Office of Discrimination and Harassment (ODH) at (303) 492 2127 or the Office of Judicial Affairs at
(303) 492 5550. Information about the ODH, the above referenced policies, and the campus resources
available to assist individuals regarding discrimination or harassment can be obtained at
Academic Misconduct
All students of the University of Colorado at Boulder are responsible for knowing and adhering to the
academic integrity policy of this institution. Violations of this policy may include cheating, plagiarism, aid
of academic dishonesty, fabrication, lying, bribery, and threatening behavior. All incidents of academic
misconduct shall be reported to the Honor Code Council ([email protected], (303) 735 2273).
Students who are found to be in violation of the academic integrity policy will be subject to both
academic sanctions from the faculty member and non-academic sanctions (including but not limited to
university probation, suspension, or expulsion). Other information on the Honor Code can be found at
www.colorado.edu/policies/honor.html and at www.colorado.edu/academics/honorcode.
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