Economía del Medio Ambiente Enero – Junio 2016

Clave TE0468
Dr. Supratim Das Gupta Oficina E-41, 4to piso
Lu, Mie 9.00-11.00 am Ext. 2850
B-103 dasgupta@ugto.org
https://sites.google.com/site/supradg/

Course Objectives

This course would deal with how economic rationale can be applied to problems regarding the
environment. Two prominent issues would be use of open-access natural resources (where property
rights are not well defined) and environmental public good provision. Apart from coming up with
instruments to deal with these problems, the course would also discuss about market failures related to
pollution. We would apply comparative static arguments to predict changes in market and socially
optimal outcomes arising from changes in economic factors such as discount rates, levels of uncertainty,
preferences, technologies and costs.

Evaluation

Two Midterms (30% each) and a Final Exam (40%). The Final Exam would be cumulative.

Topics (All topics may not be covered based on time constraints; however the list is exhaustive)

1. Environmental Economics and Ethics

2. The Emergence of Resource and Environmental Economics
a. Economics and the Environment
b. Market Forces and the Environment
3. Renewable Resources
a. Overfishing, Catch and Sustained Yield
b. Open Access
c. Forests: The Other Renewable Resource
4. Non-Renewable Resources
a. Running Out of Resources vs. Running out of the Environment
b. Coal, Oil and Climate Change
5. Property Rights, Welfare and Externalities
a. Markets and Market Failure: Cause of Environmental Degradation
b. Maximizing Net Benefits in the Presence of Externalities
c. Marginal Costs and Benefits of Pollution and Abatement
d. Private Markets and the Environment: The Coase Theorem
e. Government Policies and Market-Based Instruments
6. Environmental Valuation: Concepts and Techniques
a. Travel Cost: Estimating Recreational Demand from Visitation Data
b. Hedonic Pricing
c. Averting Behavior: Estimating Willingness to Pay for Avoiding Environmental Damages
d. Measuring Stated Preferences Using the Contingent Valuation Method
 7. Sustainability
a. Sustainability, Welfare and Equity
b. Sustainability and Intergenerational Equity
c. Measuring Sustainability
8. Production and Natural Capital
9. Other Approaches to National Income Accounting
a. Measuring, Production, Consumption and Well-Being
b. “Greening” National Income Accounts
10. Pollution and Efficient Control Instruments
11. Cost-Benefit Analysis and Policy, Time Discounting, Growth and Efficiency
a. The Effects of Different Discount Rates
b. Interest Rates for Public Projects
c. Net Present Value and Benefit-Cost Ratio
d. Internal Rate of Return
e. Using Benefit-Cost Analysis in Practice
12. International Environmental Agreements: International Environmental Cooperation and Factors
contributing to enhancing probability of International Agreements

N.B. I would like to have the class as a seminar series and am open to suggestions. Although I am
less likely to include new topics (which are not in the list), comments are more than welcome about
the order of topics to be covered and which ones you think to be most important.

Required Text: Environmental and Natural Resource Economics (7th Edition), by Tietenberg, T.,
Pearson 2006 (available in library).

Suggested Readings

 Environmental and Natural Resource Economics (7th Edition), by Tietenberg, T., Pearson
2006 (available in library)..\Tietenberg Tom, Lewis Lynne. Environmental & Natural
Resource Economics.pdf.pdf (this is a book almost identical to the one available in the
library)
 Kolstad, C. (2001). Economía Ambiental, Oxford, México (available in library).
 Natural Resource and Environmental Economics (3rd edition) by Perman, R., Ma, Y.,
McGilvray, J., and Common, M., Pearson Education Limited 2003 (available in
library)..\Perman et al.(2003)-book.pdf
 The Economics of the Environment (1st edition), by Berck, P. and Helfand, G., Pearson Education, Inc.
2011.
 Krugman-New York Times article Econ del Medi Amb_Licen\KrugmanNYT.pdf
 The Great Transition: the Promise and Lure of the Times Ahead (A report of the Global Scenario
Group), by Raskin, P., Banuri, T., Gallopin, G., Gutman, P., Hammond, A., Kates, R., Swart, R.,
Stockholm Environment Institute-Boston 2002.Econ del Medi Amb_Licen\The Great
Transition_2002-book.pdf
 Beyond growth: The economics of sustainable development, by Daly, H.E., 1996.
  Economic Growth and Sustainable Development, by Hess, P.N., Routledge Taylor& Francis
Group, London and New York 2013.
 Sachs, J., The Spread of Economic Prosperity, Ch. 2 (pp. 26-50) in The End of Poverty:
Economic Possibilities in Our Lifetime (The Penguin Press, 2005).
 Stavins, R. (Editor) (2005). Economics of the Environment: Selected Readings. 5th Edition
Norton.

References

 Daly, H.E. (1997). Forum Georgescu-Rogen versus Solow/Stiglitz, Ecological Economics. Econ
del Medi Amb_Licen\Daly (1997).pdf
 Arrow, K. et. al. (2004). Are We Consuming Too Much?, Journal of Economic Perspectives.
Econ del Medi Amb_Licen\Arrow et. al._2004.pdf
 Pemberton, M. and Ulph, D. (2001). Measuring Income and Measuring Sustainability, The
Scandinavian Journal of Economics. Econ del Medi Amb_Licen\Pemberton, Ulph_2001.pdf
 Copeland, B. R. and Scott Taylor, M. (2004). Trade, Growth and the Environment. Journal of
Economic Literature, 42, 7-71.
 Palmer, K. and Oates, W.E. and Portney, P.R. (1995) "Tightening Environmental Standards:
The Benefit-Cost or the No-Cost Paradigm?", Journal of Economic Perspectives, 9, 4, pp 119-
132.Econ del Medi Amb_Licen\Palmer et al._1995.pdf
 Sterner, T. (2003). Instruments for Environmental Policy. Econ del Medi
Amb_Licen\Sterner_2003.pdf
 World Bank, World Development Report (2010): Development and Climate Change,
(Washington, D.C., 2010), “Overview: Changing the Climate for Development,” (pp. 1- 35); Ch.
1, “Understanding the Links between Climate Change and Development” (pp. 37-69); Focus A,
“The Science of Climate Change” (pp. 70-84). Econ del Medi Amb_Licen\World Bank-World
Dev Report 2010.pdf
 Hardin, G. (1968), Tragedy of the Commons, Science, vol. 162, no. 13, pp. 1243-1248.
 Diamond, J., Why Do Some Societies Make Disastrous Decisions?, in Collapse: How Societies
Choose to Fail or Succeed, (Viking, 2005), pp. 419-440.
 World Bank Report: Chapter 2: Reducing Human vulnerability- Helping People Help
Themselves and Focus B : Biodiversity and Ecosystem Services in a changing climate
 World Bank, Ch. 3, Managing Land and Water to Feed Nine Billion People and Protect
Natural Systems (pp. 133-187) in World Development Report 2010: Development and Climate
Change, Washington, D.C., 2010.
 Jackson, T. (2005), Live Better by Consuming Less? Is There a “Double Dividend” in
Sustainable Consumption?, Journal of Industrial Ecology, vol. 9, no. 1-2, pp. 19-36.
 Gioietta K. and Lane Jennings (2013), Achieving Happiness in a Sustainable World, World
Future Review, 5: 99.Econ del Medi Amb_Licen\Kuo, Jennings-WP.pdf