ECO 255 Introduction to Environmental and Fall, 2017

Natural Resource Economics

Syllabus

Dr. Adrienne Ohler

Office: Stevenson 426F

E-mail:

Office Hours: Monday & Wednesday3:30 -5:30 p.m.and by Appointment

CLASS WEBSITE: (gradebook, lecture notes, and handouts)

REQUIRED TEXT: Harris, Jonathan (2013) Environmental and Natural Resource Economics. 3rd Edition. Houghton Mifflin. ISBN:978-0-7656-3792-5

PREREQUISITES: ECO 101 or 105 is required for this course.

ASSESSMENT: Your grade in the course will be based on four exams, four quizzes, one writing assignment, attendance, and a group presentation.

COURSE GRADE:

Exams 67%

Book Chapter Review Assignment 10%

Group Book Review Project & Presentation 10%

Homework 5%

Quizzes 5%

Attendance 3%

GRADING SCALE: The grading scale for the course is:

A range:90-100%

B range:80-89.99 %

C range: 70-79.99 %

D range: 60-69.99 %

F range:less than 60 %

  1. Exams:
  2. 5 exams
  3. 4 mid-terms
  4. optional comprehensive final
  5. Each exam will consist of a combination of multiple-choice questions and short-answer problems that require the use of verbal, graphical, and algebraic analysis.
  6. The 5 exams are equally weighted.
  7. Your exam average will be based on your 4best exam scores.
  8. NO MAKE-UP EXAMS WILL BE GIVENunless arrangements have been made with me prior to the regularly scheduled exam.
  9. The optional final cannot be taken in lieu of a mid-term exam, i.e., you must take all four of the mid-term exams to be eligible to take the optional final.
  1. Group Project & Presentations:
  2. Students will be assigned to teams and each team will participate in reading and reviewing one of the assigned books listed below.
  3. The group will complete a presentation and written report of the book and its application to class to be completed by the last week of class.
  4. Grades will be assigned to the members of each team on the quality of the oral presentations, the completeness of the book report, and an evaluation of each team member by the other members of the team.
  5. Individual - Book Chapter:

a. Each individual will complete a 2-3 page book chapter review. This assignment is due in the middle of the semester, when you have more fully developed your understanding of the economic concepts in this class and your ability to critiquetheir analysis. You will read and review one chapter from one of the following books:

  1. But Will the Planet Notice? – Gernot Wagner (Publisher-Hilland Wang)
  2. Climate Shock: The Economic Consequences of a Hotter Planet – Gernot Wagner and Martin Weitzman (Princeton University Press)
  3. Eco-nomics: What Everyone Should Know About Economics and the Environment – Richard Stroup (Cato Institute)
  4. The Not So Wild, Wild West: Property Rights on the Frontier – Terry Anderson & Peter J. Hill (Standford Economics & Finance)
  5. Nudge: Improving Decisions About Health, Wealth, and Happiness – Richard Thaler & Cass Sunstein (Penguin Books)
  6. Little Green Lies – Jeff Bennett (Connor Court Publishing)
  7. Environmental Markets: A Property Rights Approach – Terry Anderson & Gary Libecap ( Cambridge Studies in Economics, Choice, and Society)

Books are available on reserve in the library for the whole semester. More information will be givenlater in the semester regarding the assignment’s rubric. The book you review will be the same as the rest of your groupmates, but the chapters will not. I will not accept late work unless you make alternate arrangements with me prior to the due date.

  1. Quizzes:
  2. You will take 23 quizzes throughout the semesters. Only 20 count toward your final grade. The lowest quizzes score is dropped. Quizzes are open book/open note. You are encouraged to ask me or your classmates questions.
  3. Quizzes consist of 1 or 2 problems that require you to do some graphical and mathematical analysis.
  4. I do not give make-up quizzes.
  1. Homeworks
  2. You will complete 4 homework sets throughout the semesters. Each homework set will consist of 4 questions. Only 1 question will be graded, selected at random.
  3. No late homework will be accepted.
  1. Attendance:
  2. Attendance is required and affects your grade. Attendance is critically important because it helps you to practice and learn economics. Attendance is recorded at random class sessions. Your class attendance grade is calculated as a percentage of the student with the highest attendance record. For example, if the student with the highest attendance made it to class 24 out of 25 session, his/her grade would be 24/24*100=100%. If you only made it to class 23 times, your grade would be 23/24*100=95.83%.

EXTRA CREDIT: No additional extra credit will be offered. Please don’t ask.

POLICY ON CELL PHONES AND OTHER ELECTRONIC DEVICES: Cell phones must be turned off before you enter the classroom. I will not tolerate the use of cell phones, e.g., voice or text messaging, during class under any circumstances. There are no exceptions to these rules.

Disability Resource Accommodation: Reasonable accommodations are available for students who have a documented disability. Please notify the instructor the first week of class of any accommodations needed for the course. Late notification may cause the requested accommodations to not be available. Any student needing to arrange a reasonable accommodation for a documented disability should contact Student Access and Accommodation Services at 350 Fell Hall, 309-438-5853, or visit the website at

Academic Honesty:

Cheating, plagiarism, collusion, abuse of resource materials, and their consequences are defined and described in ISU Undergraduate Catalog 2017-2018, Section: University Policies Article: Academic Dishonesty (Page 28) and Code of Student Conducts under VI.A.1 Academic Dishonesty.

Disclaimer:

This syllabus is subject to change to facilitate instructional and/or student needs.

COURSE GOAL AND OBJECTIVES: The goal of this course is to provide you with an overview of the economicdimension of policies designed to protect and improve environmental quality and protect and efficiently manage naturalresources.

When you have completedthis course, you should be able to do following:

1. Locate published research in environmental and natural resource economics.

2. Explain key economic concepts and describe how they can be used to analyze specific environmental and naturalresource issues.

3. Summarize a current controversy in environmental and natural resource economics.

4. Prepare an economic analysis of a current environmental or natural resource issue and present the results of theanalysis in both written and oral form.

To achieve the objectives outlined above, we will work through a series of questions and topics:

  • How do markets fail?
  • Understanding the effects of different types of market failure, such as public goods and externalities, on the efficiencyof market-determined outcomes;
  • What can we do when markets fail?
  • Examining the potential for government intervention to correct market failures;
  • Why the government matters?
  • Understanding well-defined property rights;
  • Is some pollution good pollution?
  • Determining the efficient level of pollution control and specific policies that can be used to control pollution;
  • What we say and do are two different things.
  • Developing an understanding of the distinction between the economically efficient level of pollution control and cost-effective policies;
  • Why we will never run out of oil.
  • Understanding the distinction between exhaustible (nonrenewable) and renewable resources;
  • How we can run out of oil.
  • Identifying the basic characteristics of the economically efficient approach to resource management in the case of depletable resources;
  • Can wind energy save our country?
  • Identifying the basic characteristics of the economically efficient approach to resource management in the case of renewable resources.
  • Why you need a license to kill.
  • Applying the tragedy of the commons to fisheries and reviewing policy management
  • Ways to save the rainforest
  • Understanding the undersupply of public goods in forests and reviewing policy management
  • Why you should care about the rainforest
  • Understanding how economic value is measured and identifying techniques that can be used to estimate the value of nonmarket goods;
  • When you should and should not recycle.
  • examining the economics behind recycling and waste disposal

TIPS ON STUDYING ECONOMICS

Many students perceive economics as being a very difficult, if not impossible, course to master. However, thisperception is, in all likelihood, based on observations of the experiences of other students who did not apply the properapproach to learning economics. In many courses simple memorization is enough. That is not the case in economics.In this course, you will need to understand the meaning of basic terms and concepts, but you also will be required todemonstrate the ability to apply economic concepts in specific situations. In other words, you will be required todemonstrate the ability to think like an economist.You need to remember that economics is a participation sport. You learn economics by doing economics. That iswhy the study guides that I will give you are so important. The study guides contain a wide variety of problems that

require you to apply what you have learned and, at the same time, test your understanding of the material. I cannotstress enough the importance of using your study guides on a regular basis.

I recommend the following approach to studying and learning economics.

1) Read over the material we will be covering in class before each session. The idea is not to master the materialbeing covered but rather to familiarize yourself with the concepts to be covered in class.

2) Attend each class, take good notes, and assume an active role within your group.

3) After class read the text again, study your notes and continue working on the study guide questions.Approaching the study of economics in this manner will allow you to get the most out of the course and may actuallyresult in less time spent studying than you might if you resort to “cramming.”As I noted above, I will expect you to be able to use the tools we develop in class to analyze specific situations. Thusit is important for you to learn how to do economics.

Inaddition, I recommend that you form study groups that meet on a regular basis. One of the best ways to learn is byteaching someone else. In the study group you can help each other–and yourself–by explaining concepts and analyticaltechniques and working through sample test questions together. Past students have consistently identified regular classattendance and participation in study groups as the most valuable inputs to their understanding of the material.Finally, should you ever have any questions please don’t hesitate to ask them during class, after class, or in my officeduring office hours.

COURSE SCHEDULE

Week / Date / Material / Action Items
Section 1 – When & Why Markets Fail
1 / 8/21 / Introduction to the Course
Chapter 1: Changing Perspectives on the Environment / Quiz #1
8/23 / Chapter 3: Marginal Analysis / Quiz #2
2 / 8/28 / Chapter 3: Positive and Negative Externalities.
Well Defined Property Rights / Quiz #3
8/30 / Chapter 3: Welfare Analysis with Externalities & the Coase Theorem / Quiz #4
3 / 9/4 / No Class
9/6 / Chapter 4: Defining Common, Club, Private, Public Goods & Property Rights / Quiz #5
4 / 9/11 / Chapter 4: The Tragedy of the Commons And Undersupply of Public Goods / Quiz #6
HW #1 due
9/13 / Chapter 6: Cost-Benefit Analysis and Contingent Valuation / Quiz #7
5 / 9/18 / Chapters 1, 3-4 / Exam #1
Section 2 – The Economics of Pollution & Policy Options
9/20 / Chapter 16: Economics of Pollution Control: An Overview MC vs MB / Quiz #8
6 / 9/25 / Chapter 16: Pollution Taxes, Standards, and Permits / Quiz #9
9/27 / Chapter 16: Pollution: Non-point, point, ambient pollution / Quiz #10
7 / 10/2 / Chapter 16: Pollution and Technology / Quiz #11
HW #2 due
10/4 / Chapter 16: Pollution Problems / Quiz #12
8 / 10/9 / Chapters 16 / Exam #2
Section 3 -
10/11 / Chapter 5: Allocation over Time, and the Discount Rate
Chapter 6: Present Value and The Discount Rate. Maximizing Net Benefit vs Maximizing Present Value / Quiz #13
9 / 10/16 / Chapter 11: Non-renewable Resources: Classification, User Costs, and Extraction Costs. Optimal allocation over time using Present Value / Quiz #14
10/18 / Chapter 11: Non-renewable Resources: Optimal allocation over time with Technology
Chapter 12: Energy, Transitioning Resources / Quiz #15
10 / 10/23 / Chapter 11: The Economics of Recycling & the Optimal Extraction Path with Environmental Costs / Quiz #16
Individual Book Chapter Assignment Due
10/25 / Chapter 6: Present Value and The Discount Rate. Cost-Benefit Analysis and Decision Making / Quiz #17
HW #3 due
11 / 10/30 / Handout: Bidding Fees vs Production Royalties / Quiz #18
11/1 / Chapters 5, 6 and 11, 12 / Exam #3
Section 4 – Applications of the Tragedy of the Commons and Public Goods
12 / 11/6 / Chapter 13: Gordon-Schafer Model, Tragedy of the Commons / Quiz #19
11/8 / Chapter 13: Optimal harvest, and Policies for Sustainable Fisheries / Quiz #20
13 / 11/13 / Chapter 14: Forests Growth, Revenue, Costs, and the Discount Rate / Quiz #21
11/15 / Chapter 14: Forest Management, the Optimal Harvest and Rotation Rate, and the Undersupply of Public Goods / Quiz #22
(Group Outline due)
HW #4 due
14 / 11/20 / Thanksgiving Break
11/22 / Thanksgiving Break
15 / 11/27 / Chapter 14: Policies for Sustainable Management of Forests / Quiz #23
11/29 / Chapters 13-14 / Exam #4
16 / 12/4 / Group Presentations (mandatory attendance) / Groups 1,2,3
12/6 / Group Presentations (mandatory attendance) / Groups 4,5,6
(Group Papers Due by Thursday 5pm)
17 / TBA / Chapters 1, 3-6, 12-16 / Optional Comprehensive
Exam