EE425/625 Environmental Policy Analysis and Modeling

 

Instructor: Prof. Ian Sue Wing
Office location: Center for Energy & Environmental Studies (CEES) 675 Commonwealth Ave. Rm. 141G
Email: isw@bu.edu
Office Hours: 3:30-5 p.m. Tuesdays and Thursdays, other times by appointment only
Class times and location: 2-3:30 p.m. Tuesdays and Thursdays, CAS 237
Course Objectives: This course uses economics to give students a basic understanding of environmental policy, and an awareness of the implications of the special character of environmental problems for public decision making. It introduces the tools available to environmental policy makers and develops a framework for analyzing their effectiveness, advantages and disadvantages through quantitative exercises.
Prerequisite courses: CAS EC 101 Introductory Microeconomic Analysis CAS MA 121 Calculus for the Life and Social Sciences I
Recommended courses: CAS EC 303 Intermediate Microeconomic Analysis CAS EC 371 Environmental Economics CAS MA 122 Calculus for the Life and Social Sciences II
Grading: Homeworks (10% each) 60% Final paper 30% Class participation 10%
Teaching/learning style: This is a seminar course. The concepts will be delivered in lecture format. Throughout, I will ask questions to make sure that the students grasp the material. It is important that students do the assigned reading before the lecture, reflect upon it to form their own opinions, and come to class prepared to discuss it. To do this effectively, students should think about the major points in each reading, and try to relate these to the big-picture concepts and questions in the lectures. Failure to prepare will almost certainly incur penalties in the participation component of the final grade.
Absences/lateness: Attending lectures is mandatory and participation is required. If you know you are going to miss class and have a valid reason for doing so (i.e., illness or emergency), please notify me by email ahead of time. If that is not possible you are responsible for supplying satisfactory independent documentation (e.g., a doctorÕs note) as to why you were absent. Chronic lateness will almost certainly incur penalties in the participation component of the final grade. More than three unexcused absences will trigger automatic loss of the class participation component of the final grade. Assignments and papers are due at the beginning of class on the indicated dates and will incur a 50% grade penalty if turned in late.
Academic honesty:

Academic misconduct will not be tolerated. Student academic misconduct is clearly explained in the CAS Academic Conduct Code:

http://www.cs.bu.edu/students/conduct.html

Students should feel free to discuss the assignments, but copying solutions, providing to other students, or accepting from them printed or electronic material related to assignments is academic dishonesty. Copying text, tables, or graphs from printed materials or the internet and incorporating such material into papers without attribution is plagiarism. Any student found guilty of academic misconduct will receive a failing grade for the course.
Main Texts: Barry C. Field and Martha K. Field (2001). Environmental Economics: An Introduction, 3rd ed, McGraw Hill. (a gentle introduction) Charles D. Kolstad (2000). Environmental Economics, Oxford University Press. (more challenging and mathematical) Both are available at the BU bookstore.

Reading List:
1. Morgan, M.G. and M. Henrion (1990). Uncertainty, New York: Cambridge University Press, Ch. 3 ÒAn Overview of Quantitative Policy AnalysisÓ.
2. Andrews R.L. (1999). Managing the Environment, Managing Ourselves, New Haven: Yale University Press, Ch. 1 ÒEnvironment and GovernanceÓ pp. 1-10.
3. Rothenberg, L.S. (2002). Environmental Choices: Policy Responses to Green Demands, Washington DC: CQ Press, Ch. 2 ÒEnvironmental Action, Environmental Caution: The Case for Government InterventionÓ.
4. Rosenbaum, W.A. (2002). Environmental Policy and Politics, 5th ed., Washington DC: CQ Press, Ch. 2 ÒThe Politics of Environmental PolicyÓ.
5. Fullerton, D. and R.N. Stavins (1998). How Economists See The Environment, Nature 395: 433-434. (And reply by V. Detours.) (Available online at http://www.nature.com, search for ÒStavins and FullertonÓ)
6. Kroll, S., T.L. Cherry and J.F. Shogen (2003). Voting, Punishment and Public Goods: An Experimental Investigation.
7. Daily, G.C. et al (2000). The Value of Nature and the Nature of Value, Science 289: 395- 396. (And dEbate reply by B. Czech and rejoinder by T. Soderqvist.) (Available online at http://www.sceincemag.org, search for authors ÒDailyÓ and ÒArrowÓ)
8. Hardin (1968). The Tragedy of the Commons, Science 162: 1243-1248.
9. Coase, R.A. (1969). The Problem of Social Cost (Abridged), in R.N. Stavins (ed.) The Economics of the Environment: Selected Readings, 23-49.
10. Kelman, S. (1981). Cost-Benefit Analysis: An Ethical Critique, Regulation 5: 33-40. (With replies.)
11. Arrow, K.J. et al (1996). Is There a Role for Cost-Benefit Analysis in Environmental, Health, and Safety Regulation?, Science 272:221-222. (With reply and rejoinder.)
12. Sandel, M.J. (1997). ItÕs Immoral to Buy the Right to Pollute, New York Times Dec. 15: A29. (With replies.)
13. Bergstrom, T. and J.H. Miller (1999). Experiments with Economic Principles: Microeconomics, 2nd ed., New York: Irwin. Ch. 6 ÒExternalitiesÓ
14. Cropper, M.L.(2000). Has Economic Research Answered the Needs of Environmental Policy? Journal of Environmental Economics and Management 39(3): 328-350. (Available online at http://www.sciencedirect.com/science/journal/00950696)
15. Hahn, F.H. (2000). The Impact of Economics on Environmental Policy, Journal of Environmental Economics and Management 39(3): 375-399. (Available online at http://www.sciencedirect.com/science/journal/00950696)

     
Schedule:    

First Steps
Thu., Sep. 4

Course overview

Tue., Sep. 9

What is policy?How do we think about it?How do we analyze it?

Rosenbaum Ch. 2Morgan & Henrion (1990) Ch. 3 Ðskim

Thu., Sep. 11

Special features of environmental policy
*** Homework 1 handed out ***

Andrews (1999) Ch. 1 pp. 1-10 Rothenberg (2002) Ch. 2

Introduction to Economics

Tue., Sep. 16

Environment-economy interactions

Field Chs. 1, 2Fullerton & Stavins (1998) + replyKolstad Chs. 1, 2

Thu., Sep. 18

Math camp Handouts

Tue., Sep. 23

Utility and consumption: social choice fromindividual values
*** Homework 1 due ***
*** Homework 2 handed out ***

Kolstad Ch. 3

Thu., Sep. 25

Maximization: demand and supply Handout

Tue., Sep. 30

Markets and welfare

Field Ch. 3Kolstad Ch. 4

The Economics of Environmental Problems

Thu., Oct. 2

The public goods game
*** Homework 3 handed out ***

Handout

Tue., Oct. 7

Private vs. public goods: analytics
*** Homework 2 due ***

Kolstad Ch. 5Kroll et al. (2003)

Thu., Oct. 9

No class

Tue., Oct. 14

No class

Thu., Oct. 16

Externalities

Field Ch. 4

Tue., Oct. 21

Economic analysis of environmental quality
*** Homework 3 due ***

Field Ch. 5

Thu., Oct. 23

Frameworks of analysis
*** Homework 4 handed out ***

Field Ch. 6, 9Kolstad Ch. 8

Policy: Cost-Benefit Analysis

Tue., Oct. 28

Costs

Field Ch. 8

Thu., Oct. 30

Benefits I Daily et al (2000) + replies

Field Ch. 7Kolstad Ch. 15

Tue., Nov. 4

Benefits II
*** Outline of final paper topics due ***

Kolstad Chs. 16, 17

Thu., Nov. 6

Cost-benefit analysis

Kelman (1980) Ð skim

Policy: Instrument Choice

Tue., Nov. 11

Law and economics: property rights and theCoase theorem
*** Homework 4 due ***
*** Homework 5 handed out ***

Field Ch. 10Kolstad Ch. 6Coase (1969) Ð skim

Thu., Nov. 13

Emission standards

Field Ch. 11

Tue., Nov. 18

Emission taxes

Field Ch. 12Kolstad Ch. 9

Thu., Nov. 20

The tradable permits game
*** Homework 6 handed out ***

Bergstrom & Miller Ch. 6

Tue., Nov. 25

Tradable permits
*** Homework 5 due ***

Field Ch. 13Kolstad Ch. 9Sandel (1997) + replies

Thu., Nov. 27

No class

Miscellaneous Topics

Tue., Dec. 2

Public goods and the global environment

Hardin (1968)Barrett (1999)Heal (1999)

Thu., Dec. 4

Uncertainty and instrument choice
*** Homework 6 due ***

Kolstad Ch. 10

Tue., Dec. 9

Stock pollutants

Handout

Thu., Dec. 11

Course wrap-up
*** Final paper due ***

Cropper (2000)Hahn (2000)