| Date | Topic | Readings |
Assignments |
| *Note: If you prefer PDF over PPTX files you can convert for free without an account here. Slides are not finalized until the start of each lecture--please check back for final versions. |
*Note: To access certain readings you will need to be either (1) on the campus network or (2) using the library VPN Client with your UCD LoginID. |
||
| 1/4 |
1. Introduction and welcome. What is this course? What is environmental policy? The place of economics in policy? Slides Video - Lecture 1 (38 minutes) |
Keohane & Olmstead
(K&O): Chapter 1 1. What are Fullerton and Stavins' four myths about how economists view the environment? 2. What is meant by the 'efficiency' of competitive markets? 3. What is an 'externality'? 4. What does it mean for a `market (to) fail'? (What is market failure?) |
|
1/5 |
Discussion/lab | Classroom experiment: "Supply and Demand" 'Supply and demand' (Experiment 1) in Theodore C. Bergstrom and John H. Miller, Experiments with Economic Principles: Microeconomics, 2nd edition, Irwin McGraw-Hill, 2000. * Read pages 3-6 [the first three pages of the PDF] before lab. * Skim the rest of the chapter, reading in depth as needed to fully understand and complete the problem set questions (that will come soon). * Note: This reading is written as if you will participate in a trading market in-person, but instead you will participate electronically via a computer and web browser. PARTICIPATION CREDIT
|
|
| 1/6 |
2. Economic Efficiency and Environmental Protection Slides Video - Lecture - Part 1 (24 min) Video - Lecture - Part 2 (40 min) Video explanations from MRUniversity: The Demand Curve The Supply Curve |
K&O:
Chapter 2 Short animation demonstrating how marginal benefits increment to total benefits (will discuss in class). |
Problem Set #1 assigned (due in 8 days) |
| 1/11 |
3. Rationality and the Efficiency of Markets Slides Video - Lecture 3 - Part 1 (45 min) Video - Lecture 3 - Part 2 (17 min) *** HIGHLY RECOMMENDED: Video explanations from MRUniversity: The Equilibrium Price |
K&O:
Chapter 4 Bazerman, M. H. (2021). Judgment and decision making. In R. Biswas-Diener & E. Diener (Eds), Noba textbook series: Psychology. Champaign, IL: DEF publishers. Retrieved from http://noba.to/9xjyvc3a. 1. Behavioral economics stresses three main types of bounds on human behavior (as outlined by Herbert Simon and later Richard Thaler) that represent departures from the standard economic assumption of rational choice. Describe each of these three bounds. 2. If behavior is not rational does that mean it is necessarily unpredictable? 3. What implications do the biases in judgment here have for public policy makers (i.e., “decision architects”)? |
|
| 1/12 | Discussion/lab |
Lab topics: (A)
Market models; (B) Bazerman (2021). PARTICIPATION CREDIT: Be prepared to discuss the Bazerman (2021) article above. You will discuss the article in small groups of 3 people. At the end of discussion, each member will be asked to self-assess how prepared they were to discuss the ideas of the paper. Group members should hold others accountable for their self-assessment. Self-assessment ranking (1-5): 5: I read the whole paper carefully, I have a copy in front of me that I marked up with my notes, I have an initial idea of how to respond to the two questions posed under the reading when assigned, and I contributed actively and informatively to my group's discussion. (This might have included asking specific, informed questions about things I don't fully understand in the paper.) 4: I read the paper and have a copy in front of me, I contributed actively to my group's discussion 3: I scanned the paper and have the basic idea, I contributed a modest amount to my group's discussion. 2: I have the paper but haven't read it deeply. I contributed a small amount to my group's discussion. [**Or: I wasn't prepared at all but picked it up quickly and discussed critically once in discussion.] 1: I'm here! What more do you want from me? |
|
1/13 |
4. Market Failure, Externalities and Public Goods Slides Video - Lecture 4 - Part 1 (35 min) Video - Lecture 4 - Part 2 (29 min) ********************************************* Optional: See this BrainCraft/PBS video on The Prisoner's Dilemna See this Conservation Strategy Fund (CSF) video on Private vs. Public Goods. |
K&O:
Chapter 5 Ostrom, E. (2009). A General Framework for Analyzing Sustainability of Socio-Ecological Systems. Science 325: 419-422. (1) What characteristics of resource systems are predictive of collapse? (2) What is the core argument of Hardin (1968) as summarized by Ostrom and what summary of research findings does she use to (at least partially) refute it? Optional: NPR (2015). The Psychology Behind Why Some Kids Go Unvaccinated, National Public Radio, Morning Edition, Feb. 4 (4:50): NPR story that discusses vaccines from a collective action perspective and introduces alternative ways to think about achieving higher vaccination rates. (1) Using intuition from our discussion of OARs, explain why we might expect the level of vaccination for a disease like measles to be too low from a social perspective. |
|
| 1/18 | 4.
Market Failures in the Environmental Realm, cont'd Video - Lecture 4 - Part 3 (20 min) The Benefits and Costs of Environmental Protection (BCA): 5. Theoretical foundations, steps and discounting Slides Video - Lecture 5 - Part 1 (23 min) Video - Lecture 5 - Part 2 - discounting (38 min) ********************************************* Optional: This series of videos on Cost-Benefit Analysis from CSF is a great introduction to the topic. We won't cover all of these concepts but the series is definitely worth a view. See in particular the three videos on Discounting, Time Horizons and Net Present Value. |
K&O:
Chp 3. (Especially later sections on benefit-cost
analysis. We'll return to earlier parts of the
chapter on measuring costs and benefits later.) Review K&O Chapter 2, pp. 31-34 (Discounting and Present Value) Must read/digest before class: Discounting handout US
Environmental Protection Agency (EPA) (2010). Guidelines
for Preparing Economic Analysis, Chapter 6: Discounting Future
Benefits and Costs, EPA 240-R-10-001.
--> Read only through section 6.2.2.1,
also skip sections 6.1.2--6.1.4. |
|
| 1/19 | Discussion/lab |
Discussion of problem
set #1; Excel exercises |
|
| 1/20 | The Benefits and Costs of Environmental Protection: Video - Lecture 5 - Part 3 - discounting mechanics (16 min) {Here's the whiteboard that goes along with the video--you can comment on any component, e.g. to ask a question, using the comment tool.} Video - Lecture 5 - Part 4 - expected value (25 min) ***************************** Optional (HIGHLY RECOMMENDED): Video explanations from Kahn Academy: Computing Expected Value |
Averill, Marylin. 2003. 'Arsenic in Drinking
Water.' Kennedy School of Government Case Program,
case reference no. 1680.0, ed. Jose A. Gomez-Ibanez.
To obtain the PDF you will need to purchase on-line (for around $4) at: https://case.hks.harvard.edu/arsenic-in-drinking-water/ --> Click on "Add to cart" and then "Proceed to checkout". 1. Explain how arsenic typically ends up in drinking water. Why do we care about trying to control arsenic levels in drinking water (be specific)? 2. Cost-benefit analysis almost always requires making simplifying assumptions about the situation of study. The EPA's analysis of arsenic standards is no exception. Name at least two assumptions that were made. [HINTS: think about (1) parameter choices like discounting or the valuation of morbidity/mortality; (2) comprehensiveness of costs or benefits considered; (3) modeling of relationships between conditions (e.g. arsenic level) and outcomes.] 3. What was the EPA's objective? What metric were they considering when evaluating whether a policy was preferred. HINT: look in the last paragraph on page 8. If you're really motivated you'll figure out what's meant by ''satisfy(ing) the statutory requirements of section 1412(b(6) of SDWA' (Averill 2003, 8). |
Problem Set #2 assigned (due in 8 days) |
| 1/25 | The Benefits and Costs of Environmental Protection: 5. Overview and introduction to discounting, cont'd BCA: Measuring Benefits, Part I Slides Video - Lecture 6 - Environmental Valuation (54 min) ******************************************* Recommended videos: CSF video on Classes of Value MRU video introduction: Interpreting the Regression Line |
K&O:
Chapter 3 This four minute radio story is provided here in mp3 format for listening: NPR (2011) "How To Put A Value On Oil Damaged Life In The Gulf." National Public Radio, Morning Edition, Nov. 11. (1) Explain the distinction this NPR story draws between the approach used to characterize damages from the Exxon Valdez spill and the BP/Deepwater Horizon spill. (2) Why is there an offical effort underway to assess damages from the BP spill--what will the numbers be used for? |
|
| 1/26 | Discussion/lab |
"Arsenic in Drinking Water": Kennedy School case study (see link above to purchase) FOR PARTICIPATION CREDIT (submit
on Canvas by the posted deadline): On Canvas
find the quiz associated with this lab and enter
response to three questions on the reading Averill
(2003).
|
|
| 1/27 |
BCA: Measuring Benefits, Part II Slides Video - Lecture 6 - Environmental Valuation - Part 2 (54 min) ******************************************* Recommended video: CSF video on Travel Cost Method of valuation |
K&O: Chapter 3 | |
| 2/1 | 6. Measuring Benefits, cont'd. |
K&O: Chapter 3 | |
| 2/2 | Discussion/lab |
Discussion of problem
set #2 Arsenic lab, cont'd |
|
| 2/3 | BCA: 7. Measuring Costs and Distributional Impacts Slides Video - Lecture 7 - Measuring Costs and Distributional Impacts (39 min) |
K&O:
Chapter 3 O'Donnell, Noreen. 'Environmentalists Dispute Republican Claims Over 'Job-Killing' Regulations'. NBC News (February 1, 2017). (1) How are opponents of environmental regulations characterizing their costs? (2) How do proponents of regulations counter this argument (referencing data from U.S. Bureau of Labor Statistics & the U.S. Office of Management and Budget)? |
|
2/8 |
In-person review session |
||
| 2/8 | NOT COVERED IN 2022: Climate: Social cost of carbon Slides Video - Lecture 7.5 - Social Cost of Carbon (45 min) |
K&O: Chapter 8 | |
| 2/9 | CANCELLED IN 2022 (SINCE COVERED ON 2/8): Discussion/lab |
Review for
midterm |
|
| 2/10 | Midterm |
||
2/15 |
Policy for market failure: 8. Policy for market failure: The goal and the means Slides Video - Lecture 8 - 8. Policy for market failure: The goal and the means (45 min) |
K&O: Chapter 8 Costello, C., L.R. Gerber and S. Gaines. 2012. A market approach to saving the whales. Nature 481, 139-140. (1) What are the essential components of a "whale-conservation market" (in a couple sentences)? I.e. what would the authority do under this setup to implement the policy? (2) Do Costello and co-authors anticipate that "fervent anti-whalers" will agree or disagree with their approach to curbing whaling? Why/why not? How do Costello and co-authors respond to this anticipated fervent anti-whaler argument? Sandel, M.J. (1997). 'It's
Immoral to Buy the Right To Pollute,' New York Times, Dec. 15, p. A29. |
|
| 2/16 | Discussion/lab |
(A) Review questions from the midterm (B) Costello et al. (2012) PARTICIPATION CREDIT: Be prepared to discuss the Costello et al. (2012) article above. You will discuss the article in small groups of 3 people. At the end of discussion, each member will be asked to self-assess how prepared they were to discuss the ideas of the paper. Group members should hold others accountable for their self-assessment. Self-assessment ranking (1-5): 5: I read the whole paper carefully, I have a copy in front of me that I marked up with my notes, I have an initial idea of how to respond to the two questions posed under the reading when assigned, and I contributed actively and informatively to my group's discussion. (This might have included asking specific, informed questions about things I don't fully understand in the paper.) 4: I read the paper and have a copy in front of me, I contributed actively to my group's discussion 3: I scanned the paper and have the basic idea, I contributed a modest amount to my group's discussion. 2: I have the paper but haven't read it deeply. I contributed a small amount to my group's discussion. [**Or: I wasn't prepared at all but picked it up quickly and discussed critically once in discussion.] 1: I'm here! What more do you want from me? |
|
| 2/17 | 9. Prescriptive policy--Command and control Slides Video- Lecture 9 - Prescriptive policy--Command and control (33 min) |
K&O: Chapter 9, Chapter 10 |
Problem Set #3 assigned (due in 8 days) |
| 2/22 |
10. Market based instruments--Price instruments Slides Video (42 min) |
K&O: Chapter 9, Chapter 10 This four minute radio story is provided here in mp3 format for listening. Bonus: It features UC Davis ARE Professor Aaron Smith. NPR (2022) "How dairy farmers are cashing in on California's push for cleaner fuel." National Public Radio, Morning Edition, Feb. 10. (1) How is it that California's initiative to issue "pollution-reduction credits to the dairy based on how much methane it captures" might not accomplish its goal but instead provide "incentives to generate more pollution"? |
|
| 2/23 | Discussion/lab: |
Classroom experiment: Congestion, Externalities and Congestion Pricing FOR PARTICIPATION CREDIT: attend and participate. NOTE: It is critical that you be on time to this section (to receive participation credit) since we are running a computer-based in class experiment that requires the number of participants to be fixed in the program at the beginning of class. |
|
| 2/24 |
11. Market based instruments--Cap and trade Slides Video - Market based instruments--Cap and trade (35 min) |
Optional: How to Save a Planet (2020). Cold Hard Cash for Your Greenhouse Gas. Gimlet Media (podcast), Oct. 22, available at https://gimletmedia.com/shows/howtosaveaplanet/kwhnz8b/cold-hard-cash-for-your-greenhouse-gas. (Listen at the link or see 'Where to Listen' links for specific podcasting apps further down the page. Great story about guys driving around in a van looking for GHGs to destroy...and getting paid to do it through California's offset mechanism attached to the cap and trade program. Listen for the discussion that ties into the slide on key attributes for carbon offset effectiveness.) |
Problem Set #4 assigned on Saturday, due: in 6 days. |
3/1 |
12. Biodiversity
conservation and markets Slides - Note: this year will only cover through slide 16. Video (28 min) [SKIPPING THIS FOR 2022: (There will be a short in-class exercise that will contribute to your participation grade associated with this lecture.)] |
Conniff, Richard (2014). Useless Creatures. New York Times, September 13. (1) What is Conniff's point when he says sardonically that 'The new revised version of Genesis now says, 'God made the wild animals according to their kinds, and he said, 'Let them be fungible.' " '? (2) When Conniff argues that "Wildlife is and should be useless" does he appear to be talking about the "total economic value" as we defined in class? Use value (direct or indirect)? Non-use value? Perrings, C., S. Baumgartner, W.A. Brock, K. Chopra, M. Conte, et al. 2009. The economics of biodiversity and ecosystem services. Chapter 17 in Biodiversity, Ecosystem Functioning, and Human Wellbeing: An Ecological and Economic Perspective, Oxford University Press, pp. 230-247. Focus on 230-242, and ignore sections 17.3 (1) Explain how biodiversity conservation meets the two criteria of a (pure) public good. What are the implications for whether we might expect this good to be over- or under-supplied by a free market? (2) What two examples are discussed for utilizing markets to incentive biodiversity conservation and how do they work (generate appropriate incentives)? What concerns of equity arise with respect to local communities? (3) We've discussed subsidies and cap and trade in class. What are these two instruments called and how do they work in a biodiversity context? |
|
3/2 |
Discussion/lab |
Discussion of problem set #3 PARTICIPATION CREDIT: Be prepared to discuss the Coniff (2014) and Perrings et al. (2009) articles above. The structure will be the same as on 2/2 for the Costello et al. paper. |
|
3/3 |
13. Decentralized
policies, part I: Passive Policies Slides Video (30 min) |
||
| 3/8 | Guest speaker - Lucas Bair (USGS - Grand Canyon Monitoring and Research Center) 14. Decentralized policies, part II: Liability Laws Slides Video (24 min) |
PARTICIPATION
CREDIT:
Be prepared
to ask Lucas questions during his guest appearance. |
|
3/9 |
Discussion/lab |
Discussion of problem set #4 / Review for final |
|
| 3/10 |
15. Synthesis |
Handout: Synthesis of models for ESP 162 <--suggest saving/printing to help with reviewing and integrating ideas from the course. |
|
| Not covered this year: |
|||
Current environmental policy events: EPA's new sulfur rule ppt pdf |
US Environmental Protection Agency (2014). Control of Air Pollution from Motor Vehicles: Tier 3 Motor Vehicle Emission and Fuel Standards Final Rule: Regulatory Impact Analysis. EPA-420-R-14-005. * Just skim executive summary, pp. 1-11. |