Economics 527 (Environmental Economics)

Spring 2000

10:30 MWF

Dr. E. W. Nafziger (nafwayne@ksu.edu)

Waters 348

Office hours.: 8-8:25, 9:30-10:20 MWF, or by appointment--Waters 312.

Econ 527. Environmental Economics. (3) II. Economics of environmental market failure and the efficient use of exhaustible and renewable resources. Topics include the application of markets and government policies to greenhouse warming, air and water pollution, and recycling. The course emphasizes a global perspective on environmental and natural resource economics. Pr.: Econ 120. The course is a university general education course and counts for the natural resources and environmental sciences secondary major.

Objectives:

The primary objectives of the course are to analyze international environmental problems, with special focus on the relationship between the environment, natural resources, and economic development in developing countries. The major concentrations are on ecological versus economic approaches to the environment, sustainable development, population and development, poverty and environmental stress, grassroots environmental action by poor people, pollution and development, the economics of biodiversity and global warming, correcting measures of GNP for natural asset deterioration, intergenerational allocation of resources, green markets, and the impact of market imperfections and policy failures on environmental degradation.

Required text and reading assignments:

Claflin Books and Copies (CBC), Environmental Economics, Spring 2000. Readings are required and are assumed in examination questions, but the lecture-discussion outline will not always parallel the reading. The book is at Claflin Books and Copies (CBC) (1814 Claflin Road, diagonal to Ackert Hall).

Outside Speakers:

We will have lectures/discussions by chemistry Professor Kenneth Klabunde on global warming; Professor David Norman, an economist, on biotechnology; and perhaps Professor Dustin Becker, a biologist, on biodiversity.

Grades:

I plan five examinations. Each of the five exams is to be given a weight of one unit. I have indicated tentatively the coverage of each exam (the readings and corresponding lectures just before the listing of the examination). Each exam is essay/problem, with an occasional short identification or explanation question (see the exams for spring 1999, http://www.ksu.edu/economics/nafwayne/env99tes.htm); please bring a blue book for each of these exams.

Students who make an excellent contribution to class can raise their semester numerical grade.

Alternative to the Second, Third, or Fourth Exams:

For any or all of the second, third, and fourth exams, the student may write a paper or give a talk instead of taking the exam (the paper must be a topic related to the readings and material to be covered on the exam), provided the student notifies the instructor in writing (e.g., on a 3" by 5" card) what topic he or she is presenting by the second class after the previous exam; notifies the instructor in writing of any changes in the topic; attends class regularly; and (if a talk) arranges with the instructor for the presentation to be near the time when the subject is discussed in class. (In the past, one student both took the exam and gave the talk, enabling that student to get the better of the two grades!). The average length of the paper is about 7-12 pages. You are expected to use standard bibliographical and citation procedures (if in doubt, use the procedures of a recent American Economic Review. For material on the web, the bibliographical citation must be complete, for example, Partha Dasgupta, “The Economics of the Environment,” Proceedings of the British Academy, Volume 90, pp. 165-221, Copyright © The British Academy, 1996, available at http://britac3.britac.ac.uk/pubs/keynes95/06sec5.html. Feel free to hand in an earlier draft so that I can give you comments that will allow you to improve your paper (but give me a few days to respond), or ask questions about your progress at earlier stages of work on your paper.

A student may instead present a 20-minute or so talk, as long as the student notifies the instructor as indicated in the previous paragraph. In addition, the student must arrange with the instructor in advance to present the talk near the time the subject is discussed in class.

I have compiled an annotated bibliography of 263 environmental economic internet sites, classified by topic, at http://www.ksu.edu/economics/nafwayne/envweb.htm. You may consult this, but you need to examine the sites critically, being careful not to over rely on non-scholarly sources for papers or talks.

No alternative is possible for the the first exam, or for the last exam, Wednesday, May 10, 11:50-1:40, in Waters 348. All students are required to take these exams.

Plagiarism: University policy is: “Plagiarism and cheating are serious offenses and may be punished by failure on the exam, paper, or project; failure in the course; and/or expulsion from the university.” For more information refer to “Academic Dishonesty,” http://www.ksu.edu/uauc/fhbook/fhxf.html.

Honor system: The university has an honor system based on personal integrity, which is presumed to be sufficient assurance that in academic matters one's work is performed honestly and without unauthorized assistance. Undergraduate students, by registration, acknowledge the jurisdiction of the Undergraduate Honor System. The policies and procedures of the Undergraduate Honor System apply to all full and part-time students enrolled in undergraduate courses on-campus, off-campus, and via distance learning. A prominent part of the Honor System is the inclusion of the Honor Pledge, which applies to all assignments, examinations, or other course work undertaken by undergraduate students. The Honor Pledge is implied, whether or not it is stated: "On my honor, as a student, I have neither given nor received unauthorized aid on this academic work." This statement means that the student understands and has complied with the requirements of the assignment as set forth by the instructor. A grade of XF can result from a breach of academic honesty. An XF would be failure of the course with the X on the transcript indicating failure as a result of a breach of academic honesty. For more information, refer to http://www.ksu.edu/honor.

Academic Accommodations for Students with Disabilities: If you have any condition, such as a physical or learning disability, which will make it difficult for you to carry out the work as I have outlined it or which will require academic accommodations, please notify me in the first two weeks of the course.

Copyright 2000 E. Wayne Nafziger, as to this syllabus and all lectures. Students are prohibited from selling (or being paid for taking) notes during this course to or by any person or commercial firm without the express written permission of E. Wayne Nafziger.

Tentative Outline of Course:

1. Ecology and Economics

Video, “Conventional Economics vs. Ecological Economics,” in “Investing in Natural Capital,” with Paul Ekins and Herman Daly (Wed., Jan. 19)

2. Sustainable Development

Sandra Postel, "Carrying Capacity: Earth's Bottom Line" (for Wed., Jan. 19)

Robert M. Solow, "The Economics of Resources or the Resources of Economics.”

Robert M. Solow, “Sustainability: An Economist's Perspective."

William E. Rees, “Life in the Lap of Luxury as Ecosystems Collapse.”

Video, “ Sustainability,” in “Costa Rica Counts the Future,” with Paul Ekins, Donella Meadows, and Jose Maria Figueres.

Video, “Conversation for a Sustainable Society,” with Amory and Hunger Lovins, Dennis Meadows, and David Orr.

3. Population and Food

Lester R. Brown, "The Future of Growth."

Video, “Poverty and Illiteracy: Poor Campesinas in Bolivia” (Global Change – The Power to Change #3) “

David Pimentel and Marcia Pimentel, "Adverse Environmental Consequences of the Green Revolution."

Julian L. Simon, "The Case for More People."

E. Wayne Nafziger, "Population and Development."

Video, "Extending The Green Revolution in Indonesia” (The Power to Change #1).

Video, “Population and Sustainable Development,” in “Investing in Natural Capital,” with AnnMari Jansson and Stephen Viederman

4. Poverty and Environmental Stress

Video, “Poverty and Environmental Stress among Rural and Indigenous Peoples in Costa Rica,” in “Costa Rica Counts the Future,” with Carlos Hernandez.

5. Grassroots Environmental Action

Ismail Serageldin, "Making Development Sustainable."

World Bank, "Development and the Environment."

Mahathir Mohamed, "Ending Eco-Imperialism at Rio."

EXAMINATION

6. Market Imperfections and Policy Failures as Determinants of Environmental Degradation

Theodore Panayotou, "Environmental Degradation: Magnitude of the Problem."

Theodore Panayotou, "Market Failures and Environmental Degradation."

Video, “External Economies,” in “Costa Rica Counts the Future,” with Juan Martinez-Alier.

J.H. Dales, "Land, Water, and Ownership." .

Alan Randall, "The Problem of Market Failure."

Theodore Panayotou, "Policy Failures and Environmental Degradation."

Video, “Trade, Automobiles, and Property Rights,” in “Investing in Natural Capital,” with William Rees, Jonathan Harris, Robert Costanza, Karl-Goran Maler, and Carlos Minos.

7. The Tragedy of the Commons

Garrett Hardin, "The Tragedy of the Commons."

Video, “Environmental Conflict in Northern India: The Tragedy of the Commons,” from "The Power to Change #3."

8. Groundwater

Sandra Postel, “When the World’s Wells Run Dry.”

9. Benefit Cost Analysis, Intergenerational Allocation of Resources, and Air and Water

Pollution

Robert Dorfman, "An Introduction to Benefit-Cost Analysis."

Steven Landefeld and Eugene P. Seskin, "The Economic Value of Life: Linking Theory to Practice."

Larry E. Ruff, "The Economic Common Sense of Pollution."

Allan V. Kneese, "Analysis of Environmental Pollution." .

10. Contingent Valuation

EXAMINATION

11. The Economics of Global Warming

Prof. Kenneth Klabunde,"The Greenhouse Effect and the Ozone Problem," March 15.

Thomas C. Schelling, "The Economics of Global Warming."

Seth Dunn and Molly O’Meara, "Atmospheric Trends."

William K. Stevens, “1998 and 1999 Warmest Years Ever Recorded.”

William D. Nordhaus, “Reflections on the Economics of Climate Change.”

Christopher Flavin, "Last Tango in Buenos Aires."

Video, “Global Climate Change,” in “Costa Rica Counts the Future,” with Alvaro Umana.

12. The Economics of Biodiversity

Professor Dustin Becker, "Biodiversity" (tentative)

Janet N. Abramovitz, “Putting a Value on Nature’s ‘Free’ Services.”

John Tuxill, “Appreciating the Benefits of Plant Diversity.”

E. Wayne Nafziger, "Global Public Goods: Climate and Biodiversity."

Video, “Preserving Costa Rica’s Mega-diversity,” in “Costa Rica Counts the Future,” with Rodrigo Gamez.

EXAMINATION

12. Green Taxes

Martin Feldstein, "The Case for a World Carbon Tax."

Economist, "Greenery and Poverty."

The Margin, "Economists Propose Taxes to Avert Global Warning."

Lester R. Brown, Christopher Flavin, and Sandra Postel, “Saving the Planet: Green Taxes.”

14. Policy Reform and Sustainable Development

Theodore Panayotou, "Achieving Sustainable Development through Policy Reform."

Theodore Panayotou, "Sustainable Development and Economic Growth."

Lawrence H. Summers, "Summers on Sustainable Growth."

15. Natural Asset Deterioration and the Measurement of National Income

Lester R. Brown, Christopher Flavin, and Sandra Postel, "Better Indicators of Human Welfare."

Video, “Natural Capital,” in “An Introduction to Ecological Economics,” with Gaylord Nelson and Herman Daly

Video, “GNP and the Index for Sustainable Economic Welfare,” in “An Introduction to Ecological Economics,” with John Cobb, Jr., Herman Daly, and Martin Evans

EXAM

16. Will Natural Resources Shortages Limit Future Economic Growth?

Video, “The Limits to Growth,” in “An Introduction to Ecological Economics,” with Herman Daly

17. Daly's Impossibility Theorem: Economics as the Dismal Science Again

Herman E. Daly, "The Steady-State Economy: Toward a Political Economy of Biophysical Equilibrium and Moral Growth."

Herman E. Daly, "From Empty-World Economics to Full-World Economics.”

Marc Breslow, "Gluttons for Energy: A Threat to the Environment."

Video, "Greenbucks: The Challenge of Sustainable Development."

18. Herman Daly’s Limits to Growth vs. Theodore Panayotou's Green Markets (M3-5)

Analyze and evaluate the contrasting views of Theodore Panayotou (see above) and Herman Daly (see above) with regard to the reasons for environmental and resource problems, and the policies society can use to attain environmental goals.

You may substitute Wes Jackson, Becoming Native to This Place (on Farrell library reserve or at CBC); or Wendell Berry’s views; or some other limits-to-growth thinker (please ask for the instructor’s approval for some other thinker).

You may substitute the view of Ronald Coase, "The Problems of Social Cost," Journal of Law and Economics (October 1960); Dales, "Land, Water, and Ownership" (see above); or Solow, "The Economics of Resources or the Resources of Economics,” and “Sustainability: An Economist's Perspective" (see above); or some other mainstream economist (ask the instructor for approval) for the view of Panayotou.

EXAMINATION, WEDNESDAY, MAY 10, 11 50-1:40