Course Description:

The objective of the course is to apply economic models to environmental problems. After a brief examination of some of the key microeconomic models applied to environmental problems, a variety of topics in environmental economics will then be covered, with emphasis dependent on the interests of the class. Environmental policy analysis will be emphasized and applied to problems such as ecosystem degradation, climate change, urban air pollution, and water pollution. Other topics may include the effects of environmental policy on economic innovation and growth, international trade, and development. Seminar presentations will be related to these specific topics and dispersed throughout the semester.

Video Lectures:

Zoom Video Archive

Required Texts:

Kolstad, Charles D. Environmental Economics. 2nd ed. New York, NY: Oxford University Press, 2000. ISBN: 0195119541

Environmental Economics: A Survey by Maureen Cropper and Wallace Oates JEL Vol XXX (June 1992)

[1] Calculus Primer

[2] Economics and Optimization

[3] Notes on solving Congestion and Peakload problems

Grading:
written/online assignments	20%	Notes: HW1 Key
Literature Reviews	20%	Notes
Term Paper	20%	Notes
Final Exam	40%	Notes1 Notes2

	Outline:
	Topic	Kolstad	Supplimental Materials
1	The Role of Government and Social Choice	CH 1, 2 and 3.
2	Efficiency and Markets	CH 4
	& Market Failure and Externalities	CH 5
3	Benefit Cost Analysis	CH 6
4	Environmental Demand Theory	CH 7, 8	(1) Intro to CV/EV (2) Calculating CV/EV
5	Regulating Pollution	CH 11
6	Pigovian Taxes	CH 12
7	CAC, Emission fees, Marketable permits	CH 12
8	Property Rights	CH 13
9	More on Marketable permits: Cap and trade	CH 14
10	Regulation with Unkown Controls	CH 15
11	Risk, uncertainty and Moral Hazard	CH 16
	Journal Articles
	An alternative approach to the analysis of taxation Yoram Barzel JPE 1976 (Read only sections I to V; up to page 1190 only)
	On Marketable Air-Pollution Permits: The Case for a System of Pollution Offsets KRUPNICK, OATES AND VANDEVERG JEEM (1983) Marketable Permits for the Prevention of Environmental Deterioration MCGARTLAND AND OATES JEEM(1985) Environmental Regulation, Asymmetric Information, and Moral Hazard, Wainwright, K
	The structure of a contract and the theory of a non-exclusive resource Cheung, S.N.S. JLE 1970 pp 49-70
	The Use of Standards and Prices for Protection of the Environment William J. Baumol and Wallace E. Oates The Swedish Journal of Economics, Vol. 73, No. 1, Environmental Economics, (Mar.,1971), pp. 42-54 Prices vs. Quantities Martin L. Weitzman, The Review of Economic Studies(Oct., 1974) Uncertainty and the Choice of Pollution Control Instruments ZVI ADAR AND JAMES M. GRIFFIN, JEEM (1976) Emission Control Policies under Uncertainty GIDEON FISHELSON, JEEM (1976)
	Equilibrium in competitive insurance markets: an essay on the economics of imperfect information Rothchild, M and Stiglitz, JQE, 90, 1976

	Readings by Topic Category
Externalities & Property Rights	Required: The Problem of Social Cost Ronald Coase Journal of Law and Economics, pp1-44 Oct. 196 . The Exchange and Enforcement of Property Rights Harold Demsetz Journal of Law and Economics, Vol. 7, (Oct., 1964), pp. 11-26 Some Aspects of Property Rights Harold Demsetz Journal of Law and Economics, Vol. 9, (Oct., 1966), pp. 61-70 The Transferability and Depletability of Externalities PETER J. W. N. BIRD JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 14, 54-57 (1987) COMMENTS One More Externality Article HENRY M. PESKIN JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 15, 380-381 (1988) . One More Externality Article: Reply PETER J. W. N. BIRD JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 15, 382-383 (1988)
Pigouvian Taxes	External Diseconomies, Corrective Taxes, and Market Structure James M. Buchanan The American Economic Review, Vol. 59, No. 1, (1969), pp. 174-177 Required: An alternative approach to the analysis of taxation Barzel, Y JPE, 84, 1976 Recommended: Depletable Externalities and Pigouvian Taxation A. MYRICK FREEMAN III JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 11,173-179 (1984) Pigovian Taxes Which Work in the Small-Number Case DONALD WITTMAN JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 12, 144-154 (1985) Recommended: The Use of Standards and Prices for Protection of the Environment William J. Baumol and Wallace E. Oates The Swedish Journal of Economics, Vol. 73, No. 1, Environmental Economics, (Mar.,1971), pp. 42-54
Uncertainty and Asymmetric Information	Required Environmental Regulation, Asymmetric Information, and Moral Hazard Wainwright, K discussion paper Prices vs. Quantities Martin L. Weitzman The Review of Economic Studies, Vol. 41, No. 4, (Oct., 1974), pp. 477-491 Recommended: Uncertainty and the Choice of Pollution Control Instruments ZVI ADAR AND JAMES M. GRIFFIN JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 3, 178-188 (1976) Recommended: Emission Control Policies under Uncertainty GIDEON FISHELSON JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 3, 189-197 (1976) Uncertainty and incentives for nonpoint pollution control Journal of Environmental Economics and Management, Volume 15, Issue 1, March 1988, Pages 87-98 Kathleen Segerson Pollution Control Mechanisms when Abatement Costs are Private Knowledge, Olivar Bergland, Jan 1990 (dissertation) Technology Choice and Environmental Regulation under Asymmetric Information Alessio D'Amato and Bouwe Dijkstra, Resource and Energy Economics 2015
Marketable Permits	Marketable Pollution Permits and Acid Rain Externalities Scott E. Atkinson The Canadian Journal of Economics / Revue canadienne d'Economique, Vol. 16, No. 4 (Nov., 1983), pp. 704-722 Efficiency in Pollution Control in the Short and Long Runs: A System of Rental Emission Permits Robert A. Collinge and Wallace E. Oates The Canadian Journal of Economics, Vol. 15, No. 2, (May, 1982), pp. 346-354 On Marketable Air-Pollution Permits: The Case for a System of Pollution Offsets ALAN J. KRUPNICK, WALLACE E. OATES AND ERICVANDEVERG JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 10,233-247 (1983) Marketable Permits for the Prevention of Environmental Deterioration ALBERT M. MCGARTLAND AND WALLACE E. OATES JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 12,207-228 (1985) Tradeable Permits ofr Pollution Control when Emission Location Matters: What Have We Learned? Tom Tietenberg, Environmental and Resource Economics 1995
Efficiency, Enforcement and Innovation	An Empirical Analysis of Economic Strategies for Controlling Air Pollution EUGENE P. SESKIN, ROBERT J. ANDERSON JR. AND ROBERT 0. REID JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 10, 112- 124 ( 1983) The Structure of Penalties in Environmental Enforcement: An Economic Analyis KATHLEEN SEGERSON & TOM TIETENBERG JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 23, 179-200 (1992) Markets for pollution control when firms are noncompliant Journal of Environmental Economics and Management, Volume 18, Issue 2, Part 1, March 1990, Pages 97-106 Arun S. Malik Permanent versus interim regulations: A game-theoretic analysis Journal of Environmental Economics and Management, Volume 21, Issue 2, September 1991, Pages 127-139 Arun S. Malik Nonpoint pollution control: Inducing first-best outcomes through the use of threats Journal of Environmental Economics and Management, Volume 51, Issue 2, March 2006, Pages 165-184 Kathleen Segerson, JunJie Wu The Effect of Allowing Pollution Offsets with Imperfect Enforcement Hilary Sigman and Howard Chang, NBER Working Paper Series March 2011 Innovation in Pollution Control Paul Downing and Lawrence White, JEEM 1986
Natural Resources	Contracting Problems and Regulation: The Case of the Fishery Ronald Johnson and Gary Libecap, AER 1982 Fishery Reading Forestry Reading
Chronological Listing	Many articles are also listed above
	The Problem of Social Cost Ronald Coase Journal of Law and Economics, pp1-44 Oct. 196 . The Exchange and Enforcement of Property Rights Harold Demsetz Journal of Law and Economics, Vol. 7, (Oct., 1964), pp. 11-26 Some Aspects of Property Rights Harold Demsetz Journal of Law and Economics, Vol. 9, (Oct., 1966), pp. 61-70 Why Regulate Utilities? Harold Demsetz Journal of Law and Economics, Vol. 11, No. 1 (Apr., 1968), pp. 55-65 External Diseconomies, Corrective Taxes, and Market Structure James M. Buchanan The American Economic Review, Vol. 59, No. 1, (1969), pp. 174-177 . The structure of a contract and the theory of a non-exclusive resource Cheung, S.N.S. JLE 1970 pp 49-70 The Use of Standards and Prices for Protection of the Environment William J. Baumol and Wallace E. Oates The Swedish Journal of Economics, Vol. 73, No. 1, Environmental Economics, (Mar., 1971), pp. 42-54 Prices vs. Quantities Martin L. Weitzman The Review of Economic Studies, Vol. 41, No. 4, (Oct., 1974), pp. 477-491 . An alternative approach to the analysis of taxation Barzel, Y JPE, 84, 1976 Uncertainty and the Choice of Pollution Control Instruments ZVI ADAR AND JAMES M. GRIFFIN JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 3, 178-188 (1976) Emission Control Policies under Uncertainty GIDEON FISHELSON JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 3, 189-197 (1976) Efficiency in Pollution Control in the Short and Long Runs: A System of Rental Emission Permits Robert A. Collinge and Wallace E. Oates The Canadian Journal of Economics, Vol. 15, No. 2, (May, 1982), pp. 346-354 An Empirical Analysis of Economic Strategies for Controlling Air Pollution EUGENE P. SESKIN, ROBERT J. ANDERSON JR. AND ROBERT 0. REID JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 10, 112- 124 ( 1983) On Marketable Air-Pollution Permits: The Case for a System of Pollution Offsets ALAN J. KRUPNICK, WALLACE E. OATES AND ERICVANDEVERG JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 10,233-247 (1983) Depletable Externalities and Pigouvian Taxation A. MYRICK FREEMAN III JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 11,173-179 (1984) A General Equilibrium Analysis of the Optimal Number of Firms in a Polluting Industry Robert E. Kohn The Canadian Journal of Economics, Vol. 18, No. 2, (May, 1985), pp. 347-354 Effluent Regulation and Long-Run Optimality DANIEL F. SPULBE JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 103-116 (1985) Pigovian Taxes Which Work in the Small-Number Case DONALD WITTMAN JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 12, 144-154 (1985) Marketable Permits for the Prevention of Environmental Deterioration ALBERT M. MCGARTLAND AND WALLACE E. OATES JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 12,207-228 (1985) The Rate of Emission and the Optimal Scale of the Polluting Firm Robert E. Kohn The Canadian Journal of Economics, Vol. 19, No. 3, (Aug., 1986), pp. 574-581 The Transferability and Depletability of Externalities PETER J. W. N. BIRD JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 14, 54-57 (1987) COMMENTS One More Externality Article HENRY M. PESKIN JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 15, 380-381 (1988) . One More Externality Article: Reply PETER J. W. N. BIRD JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT 15, 382-383 (1988) Environmental Regulation, Asymmetric Information, and Moral Hazard Wainwright, K discussion paper .