ENV 200B, ESP/ECL 212B: Environmental Policy Analysis

Syllabus Details -- 2020

Course prerequisites

Microeconomics (e.g., Econ 100); statistics and regression techniques (e.g. STA 108 or ARE 106); policy analysis (e.g., ESP 168A); environmental or economics (e.g., ARE 176). 

Course description

This course will take an economic approach to policy design and assessment.  We will explore theory underlying key concepts in economics the environment, including (1) motivations for intervention in the free market to protect the environment, (2) foundations of cost-benefit analysis and (3) rationale for policy choice and design.  The objective will be to evaluate environmental policy using an economic framework—with an awareness of both the power and limitations of the method—and to effectively read and critique the writings of economists and those using economic thinking.  We will cover the relevant analytical tools of economics and explore applications to current policy problems such as climate change, water pollution, invasive species and biodiversity.   

The Role of Cost-Benefit Analysis in Public Policy
We will examine controversies in the use of economics for decision-making in public policy, as evidenced by these contrasting viewpoints:

“Although formal benefit-cost analysis should not be viewed as either necessary or sufficient for designing sensible public policy, it can provide an exceptionally useful framework for consistently organizing disparate information, and in this way, it can greatly improve the process and, hence, the outcome of policy analysis.”   -Arrow et al. (1996)

"In this approach [of assigning dollar values to human life, human health, and nature itself] formal cost-benefit analysis often hurts more than it helps: it muddies rather than clarifies fundamental clashes about values.  … economic theory gives us opaque and technical reasons to do the obviously wrong thing."        -Ackerman and Heinzerling (2004)


Climate Change
Until a couple of years ago the mainstream economic consensus on how aggressively to tackle climate change was a “gradualist approach” where greenhouse gases (GHGs) are to be only modestly constrained in the near term with sharp reductions delayed until the medium to long term.  In 2007 the Stern Review (SR) upset this apple cart by presenting a high profile rebuttal of this gradualist position, concluding that immediate aggressive action must be taken to curb GHGs.  How was it that, despite using essentially the same data and methodology, the SR came to such a starkly different conclusion?  We will use this case to discuss the degree to which modeling choice in cost-benefit analysis might be thought of as either objective or a matter of judgement and opinion. 

The Value of Human Life
In May of 2008 the EPA lowered the “value of a statistical life” (VSL) used in its valuation of risk-reducing environmental policy from $7.8M to $6.9M.  Comedian Stephen Colbert quickly observed:  “That’s right--under the Bush administration, human life has become a million dollars cheaper.”   The VSL is commonly misconstrued as the intrinsic value of a single human life.  What, then, is the VSL intended to represent?  How is it motivated as a relevant measure and how is it estimated? 

Rational Choice Theory
Rational choice theory posits that the actions of actors reflect a thoughtful weighing of the costs and benefits of their actions.  It is a typical assumption underlying economic models used to evaluate environmental policy options.  This conventional notion is challenged by behavioral economics which acknowledges that individuals often make choices and express values that are inconsistent with a rational model.  How do these deviations from the standard model change our thinking about environmental policy?  What are the implications if market-based environmental policies to correct for market failure are subject to such “behavioral failure”?

Required resources

1. Textbook, referred to as "K&O":  N. Keohane and S. Olmstead.  Markets and the Environment, Island Press, Washington, D.C., 2nd Edition, 2016.  The UCD library has an electronic version of the K&O textbook here.

2. Kennedy School case study, which can be purchased on-line (see course schedule).

3. Excerpts from other texts and magazine and journal articles will be made available online linked to the course website.

Optional: Three chapters from a basic textbook (dry but detailed discussion of many of our basic models).

Assignments and grading

This course will involve a combination of lecture, discussion and student presentation.  Grading will be determined by:

20% class discussion, participation and class presentations
40% written assignments (writing assignments)
20% midterm quiz
20% final quiz


 Class Discussion, Participation and Presentations
Each class will be split between lecture and discussion. Class members are expected to fully participate in the discussion. This means doing the readings for each class (it is really obvious if you haven’t done the readings!) then participating in the discussion. Good participation means not just stating an opinion or restating the points made in the readings but engaging with others and responding to the questions raised by the discussion leaders.

Participation grading: TLDR--Just be active and engaged and it will take care of itself. To be a bit more concrete:
  • A grade: Fully participate in all discussion boards; front row a few times; commenting in class a few times; present for about 90% of synchronous classes including in breakout rooms; Concept & Context presentation is well-chosen, prepared and delivered. 
  • B- grade: Miss a couple of discussion boards or not fully participate in several; front row once, commenting in class once, present for about 70% of synchronous classes including in breakout rooms; Concept & Context presentation is bare bones with unpolished presentation and delivery
  • Other factors: deeply thought-out responses/questions; participation in non-graded discussion boards (e.g. “Improving our remote classroom experience”; “Concept & Context presentation”; “General class questions”).
Written Assignments
These include short Policy Memos on given policy problems as well as at least one longer form paper.

Midterm and Final Quiz
These will be short, in-class time quizzes to assess your understanding of key ideas and concepts covered in the course. 
Midterm quiz format: 
  • 30 minutes total in class time/synchronous (receive questions by 2:10pm; upload response by 2:45) 
  • you will choose 2 short essay questions from a list of 3 may be typed or handwritten/scanned (or both if you want to hand draw a figure)
  • possible midterm topics 2020:
    • Efficiency (link to the two basic value/ethical systems, First Thm of Welfare Economics)
    • Rational model (credibility, usefulness)
    • Open access resources (tragedy of the commons (TOC), collective action, models of the TOC (micro, game theory), property rights, policy responses, Ostrom perspective)
    • Discounting (rationale, choice of rate, sensitivity of present value calculations)
    • Benefit-cost analysis (best practice, arsenic case study)
    • Valuation (total economic value, typology of value, typology of valuation methods)
Use of course materials
My lectures and course materials, including PowerPoint presentations, tests, outlines, and similar materials, are protected by U.S. copyright law and by University policy. I am the exclusive owner of the copyright in those materials I create. You may take notes and make copies of course materials for your own use. You may also share those materials with another student who is enrolled in or auditing this course in this quarter. You may not reproduce, distribute or display (post/upload) lecture notes or recordings or course materials in any other way — whether or not a fee is charged — without my express prior written consent. You also may not provide the materials for someone else to do so. If you do so, you may be subject to student conduct proceedings under the UC Davis Code of Academic Conduct.

Mental health
  • If you are feeling especially stressed or just need to talk to someone, you should take advantage of the free counseling services offered on campus.
  • If you’re having a hard time studying efficiently and adjusting to university academic expectations, you should visit the Student Academic Success Center.
  • University is expensive and it can be difficult to make ends meet. If you are living in Davis and having a hard time finding a healthy meal or getting basic necessities, please visit the UC Davis Pantry.
Writing and References
Writing is a critical skill for work in policy and management. The Environmental Policy and Management Program (EPM) encourages similar writing and referencing expectations across all EPM core courses.  Refer to the EPM Guides for Writing and Referencing.

When submitting written assignments, you will use Canvas.  Within the Canvas submission system we will use TurnItIn, a tool compares your work to online sources and a comprehensive database of other papers. TurnItIn creates an originality report identifying whether parts of your work match or are similar to any of their sources. The work submitted to TurnItIn will be retained as source documents in the TurnItIn reference database to be used solely for the purpose of checking future submitted work for originality.  We will have a “draft submission” exercise to get used to this before the first final essay is due. 

Professionalism Expectation
EPM strives to build a positive and thriving professional culture where qualities of skill, dependability and professional conduct and capacity are preeminent. The nature of policy and management work often involves working in collaborative groups, organizing coalitions, and engaging in contentious conversations. Similarly, EPM courses require working collaboratively and respectfully engaging in discussions and debates about complex issues. Thus, all students and faculty are expected to follow EPM Professional Code of Conduct. Instructors may reduce the class score of students whose behavior is inconsistent with the EPM Professional Code of Conduct.

Academic Integrity
As a University of California, Davis student, you have agreed to abide by the University's Code of Academic Conduct. It is your responsibility to be familiar with the code. All academic work must meet these standards. Lack of knowledge of the academic honesty policy is not a reasonable explanation for a violation. Questions related to course assignments and the academic honesty policy should be directed to the instructor.

Special Accommodation
Please let me know if you have a learning disability, chronic condition, sensory or physical disability or if English is not your first language and you need special assistance in lecture, reading or writing assignments contact. Students needing accommodations because of disability should register with UCD’s Student Disability Center (SDC) and complete the appropriate SDC forms issued before accommodations can be provided. The SDC is located at 54 Cowell Building. They may be reached by phone at (530) 752-3184.