Economics 352	Noelwah Netusil
Fall 2007	Vollum 227, ext.7306
Syllabus	e-mail: netusil@reed.edu

Course Objective: This course presents an economic analysis of renewable and nonrenewable natural resources. Concepts include static and dynamic efficiency, equity, property rights, discounting, market failure, non-market valuation, and sustainability. The course will cover current and proposed policies for resource management such as transferable quotas, taxes, subsidies, regulations, and public versus private ownership. Prerequisites: Economics 201 and calculus.

Office Hours: Office hours will be held in Vollum 227 on Mondays, Wednesdays and Thursdays from 2:30-3:30. Students who are unable to come during these times are encouraged to make an appointment.

Text and Required Readings: The text for this course is The Economics of Natural Resource Use (2nd edition) by John M. Hartwick and Nancy D. Olewiler. In addition to the text, students are responsible for the required readings on the attached list and for additional readings that will occasionally be announced in class. Students are expected to contribute to class discussions by finding examples of current environmental and natural resource issues in the business, financial, and general press and posting this relevant readings in Moodle. The New York Times, High Country News, The Economist and Tidepool are strongly recommended.

Evaluation: Evaluation will be based on a midterm examination, a comprehensive final examination, participation in a group project, three homework assignments and class participation. Every student is expected to be prepared to contribute meaningfully to every class session.

Collaboration: All work submitted during this course is expected to reflect the effort of the individual whose name appears on top of the page. You are encouraged to work with friends, tutors and the instructor on assignments. However, when the time comes to write your assignment, it must be your work and should be written in words that reflect your understanding of the problem.

Citations: Citations should be used when appropriate and should conform to the guidelines in the Economic Department Citation Guide.

World Wide Web: Numerous web sites can be reached by using links provided in the Links to Web Sites web page. Students may be required to visit web sites to complete homework assignments.

Materials on Reserve: The following texts are on 2-hour reserve.

Easton, Thomas A. and Theodore D. Goldfarb (editors). 2003. Taking Sides: Clashing Views on Environmental Issues (10th edition). Guilford, CT: McGraw-Hill/Dushkin.

Glickman, Theodore S. and Michael Gough (eds.) 1990. Readings in Risk Washington, D.C.: Resources for the Future.

Hartwick, John M. and Nancy D. Olewiler. 1998. The Economics of Natural Resource Use (2nd edition). Reading, MA: Addison-Wesley.

Iudicello, Suzanne, Michael Weber, and Robert Wieland. 1999. Fish, Markets and Fishermen: The Economics of Overfishing Island Press: Washington, DC

Pikitich, Ellen K., Daniel D. Huppert and Michael P. Sissenwine (editors). 1997. Global Trends: Fisheries Management American Fisheries Society Symposium 20, Bethesda, Maryland.

Wolf, Edward and Seth Zuckerman (editors). 1999. Salmon Nation: People and Fish at the Edge. Portland, OR: Ecotrust.

I. Introduction (August 27 and 29)

Hartwick and Olewiler, Chapter 1.

The Economist. 2001. Poverty and Property Rights: No Title (March 31) 20-22.

Economist.com. 2007. The Tragedy of the Commons (May 7).

The Economist.1999. Economics Focus: Deep Discount (June 26) 90.

*Portney, Paul R. and John P. Weyant (eds.). 1999. Discounting and Intergenerational Equity Washington, D.C.: Resources for the Future.

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II. Sustainability and Resource Scarcity (August 31 and September 5)

Hartwick and Olewiler, Chapter 2.

Living on Earth. 2004. Measuring our Worth (April 9).

Christensen, Jon. 2005. Are We Consuming Too Much? Conservation In Practice (April-June) 6(2).

Lange, Glenn-Marie. 2003. Policy Applications of Environmental Accounting Environmental Economics Series Paper No. 88 The World Bank Environment Department (January). Please reaad sections 1, 2 6 & 7.

Perrings, Charles. 1998. Policy Forum: Environmental Scares - the Club of Rome Debate Revisited Environment and Development Economics 3: 491-537.

*Arrow, K. et al. 2004. Are We Consuming Too Much? Journal of Economic Perspectives 18(3):147-172.

*El Serafy, Salah. 1997. Green Accounting and Economic Policy Ecological Economics 21: 217-229.

*Slade, Margaret. 1982. Trends in Natural-Resource Commodity Prices: An Analysis of the Time Domain Journal of Environmental Economics and Management 9: 122-137.

*Vincent, Jeffrey R. 2000. Green Accounting: From Theory to Practice Environment and Development Economics 5: 13-24.

III. Land (September 7 and 10)

Hartwick and Olewiler, Chapter 3 (pages 57-75)

Phillips, Justin and Eban Goodstein. 2000. Growth Management and Housing Prices: The Case of Portland, Oregon Contemporary Economic Policy 18 (3): 334-344.

IV. Water (September 12, 14 and 17)

Hartwick and Olewiler, Chapter 3 (pages 75-end)

• Portland's Clean River Rewards program

Living on Earth. 2007. Water Diaries (August 17).

• H2OUSE

National Public Radio. 2007. Stuggling Over Water (June 11).

PBS Video. 1997. Cadillac Desert: An American Nile (video 2).

Ceililo Falls and the Remaking of the Columbia River Oregon State University, Oregon Sea Grant Program (DVD).

Clement, Douglas. 2003. Water Wars Fedgazette Federal Reserve Bank of Minneapolis (July): 1-7

Neuman, Janet C. 2004. The Good, The Bad, and The Ugly: The First Ten Years of the Oregon Water Trust Nebraska Law Review 83:432-484.

Brewer, Jedidiah, Robert Glennon, Alan Ker and Gary Libecap. 2007. Transferring Water in the American West: 1987-2005 University of Michigan Journal of Law Reform 40(4): 1021-1053.

National Academies of Sciences.2004. Executive Summary: Valuing Ecosystem Services: Toward Better Environmental Decision-Making (November).

National Academies of Sciences. 2004. Translating Ecosystem Functions to the Value of Ecosystem Services: Case Studies: pages 156-167 and 173-178.

The Economist. 2005. Environmental Economics: Are You Being Served? (April 23): 76-78.

*Young, Robert A. 2005. Determining the Economic Value of Water: Concepts and Methods Washington, DC: Resources for the Future.

Garcia, S.M. and C. Newton. 1997. Current situation, trends, and prospects in world capture fisheries. Pages 3-27 in E.L. Pikitch, D.D. Huppert, and M.P. Sissenwine, editors. Global trends: fisheries management. American Fisheries Society Symposium 20. Bethesda, Maryland.

• NOAA Fisheries Technical Terms

The Oregon Story: Fishing Oregon Public Broadcasting (video)

Worm, Boris et al. 2006. Impacts of Biodiversity Loss on Ocean Ecosystem Services Science 314(5800): 787-790.

Dean, Cornelia. 2006. Study Sees 'Global Collapse' of Fish Species The New York Times (November 3).

Howe, Kevin. 2006. Oceans' Early Demise Disputed: Fishers, Other Marine Experts Say Pessimistic Report Unduly Alarmist Monetery County Herald (November 11).

Tierney, John. 2006. Where The Tuna Roam The New York Times (August 22).

Hartwick and Olewiler, Chapter 4.

*Hartwick and Olewiler, Chapter 11.

*Iudicello, Suzanne, Michael Weber, and Robert Wieland. 1999. Fish, Markets and Fishermen: The Economics of Overfishing Island Press: Washington, DC., Chapters 1-3.

Hartwick and Olewiler, Chapter 5.

Iudicello et al. Fish, Markets and Fishermen: The Economics of Overfishing, Chapter 4 "The Effects of Subsidies"

*Crutchfield, J.A. 1979. Economic and social implications of the main policy alternatives for controlling fishing effort. Journal of Fisheries Research Board of Canada. 36: 742-752.

Hanna, S., Carl Folke, and Karl-Goran Maler. 1995. Property Rights and Environmental Resources. Pages 15-29 in S. Hanna and M. Munasinghe, editors. Property Rights and the Environment: Social and Ecological Issues. Beijer International Institute of Ecological Economics and The World Bank: Washington, D.C.

Sutinen, J. G. and J.R. Gauvin. 1989. An Econometric Study of Regulatory Enforcement and Compliance in the Commercial Inshore Lobster Fishery of Massachusetts. Pages 415-428 in P.A. Neher, R. Arnason and N. Mollett, editors. Rights based fishing. Kluwer Academic Publishers: Boston, MA.

Iudicello et al. Fish, Markets and Fishermen: The Economics of Overfishing, Chapter 5 "Managing Fisheries Rationally: Framework and Tools"

*Bromley, Daniel W. (editor) 1992. Making the Commons Work: Theory, Practice, and Policy. Institute for Contemporary Studies: San Francisco, CA.

Farrow, S. 1996. Marine Protected Areas: Emerging Economics. Marine Policy. 20 (6): 439-446.

Sanchirico, James N. and James E. Wilen. 2000. The Impacts of Marine Reserves on Limited-Entry Fisheries. Resources for the Future Discussion Paper 02-69.

*Holland, D.S. and R. J. Brazee. 1996. Marine Reserves for Fisheries Management. Marine Resource Economics. 11: 157-171.

*Smith, Martin D. and James E. Wilen. 2002. The Marine Environment: Fencing the Last Frontier. Review of Agricultural Economics 24 (1) 31-42.

Layman, R. C., J. R. Boyce, and K. R. Criddle. 1996. Economic Valuation of the Chinook Salmon Sport Fishery of the Gulakana River, Alaska, Under Current and Alternate Management Plans. Land Economics. 72 (1): 113-128.

Bell, Kathleen, Daniel Huppert, and Rebecca Johnson. 2003. Willingness to Pay for Local Coho Salmon Enhancement in Coastal Communities. Marine Resource Economics 18(1): 15-32.

Johnston, Robert J., Thomas A. Grigalunas, James J. Opaluch, Marisa Mazzotta, and Jerry Diamantedes. 2002. Valuing Estuarine Resource Services Using Economic and Ecological Models: The Peconic Estuary System Study Coastal Management 30(1): 47-65.

*Knetsch, J. and R. Davis. 1966. Comparisons of methods for recreation evaluation. Pages 336-353 in Dorfman and Dorfman (editors) Economics of the Environment: Selected Readings (3rd edition). New York, NY: W.W. Norton.

Hartwick and Olewiler, Chapter 6.

Portney, Paul R., Ian W.H. Parry, Howard K. Gruenspecht and Winston Harrington. 2003. Policy Watch: The Economics of Fuel Economy Standards Journal of Economic Perspectives 17(4): 203-217.

Ellerman, A. Denny and Barbara K. Buchner. 2007. The European Union Emissions Trading Scheme: Origins, Allocation, and Early Results. Review of Environmental Economics and Policy 1(1): 66-87.

Scarborough, Brandon. 2007. Trading Forest Carbon: A Panacea or Pipe Dream to Address Climate Change? (July) PERC Policy Series Issue Number PS-40.

*Coase, Ronald H. 1960. The Problem of Social Cost. Journal of Law and Economics 3: 1-44.

Hartwick and Olewiler, Chapter 7

Kelman, Steven. Cost-Benefit Analysis: An Ethical Critique. Pages 129-136 in Glickman and Gough (eds.), Readings in Risk.

Butters, Gerard et al. Reply to Steven Kelman. Pages 136-137 in Glickman and Gough (eds.), Readings in Risk.

Pacala, S.W. E. Bulte, J.A. List and S.A. Levin. 2003. False Alarm over Environmental False Alarms Science 301 (August): 1187-1188.

Pindyck, Robert S. 2007. Uncertainty in Environmental Economics Review of Environmental Economics and Policy 1(1): 45-65.

Hill, Jason, Erik Nelson, David Tilman, Stephen Polasky and Douglas Tiffany. 2006. Environmental, Economic, and Energetic Costs and Benefits of Biodiesel and Ethanol Biofuels. Proceedings of the National Academy of Sciences 103(30): 11206-11210.

Huppert, Daniel D. 1999. Snake River Salmon Recovery: Quantifying the Costs. Contemporary Economic Policy 17 (4):476-491.

Loomis, John B. 1996. How Large is the Extent of the Market for Public Goods: Evidence From a Nationwide Contingent Valuation Survey. Applied Economics 28: 779-782.

*Portney, Paul R. 1994. The Contingent Valuation Debate: Why Economists Should Care. Journal of Economic Perspectives 8 (Fall) 3-17.

*Hanemann, W. Michael. 1994. Valuing the Environment Through Contingent Valuation. Journal of Economic Perspectives 8 (Fall) 19-43.

*Diamond, Peter A. and Jerry A. Hausman. 1994. Contingent Valuation: Is Some Number Better than No Number? Journal of Economic Perspectives 8 (Fall) 45-64.

*Freeman, A. Myrick. 2003. The Measurement of Environmental and Resource Values: Theories and Methods (2nd edition). Washington, D.C.: Resources for the Future.

• Oregonlive.com New Carissa Web Page

Hartwick and Olewiler, Chapter 8

Brown, Stephen P.A. and Daniel Wolk. 2000. Natural Resource Scarcity and Technological Change. Economic and Financial Review, Federal Reserve Bank of Dallas (First Quarter) 2-13.

Hartwick and Olewiler Chapter 9

Tierney, John. 1996. Recycling is Garbage The New York Times Magazine (June 30) 24- 29.

Denison, Richard A. and John F. Ruston. Recycling is not Garbage. Pages 278-284 in Taking Sides: Clashing Views on Controversial Environmental Issues (10th edition).

The Economist. 2004. Garbage In, Garbage Out (May 29) 13.

Kinnaman, Thomas C. 2006. Policy Watch: Examining the Justification for Residential Recycling Journal of Economic Perspectives 20(4): 219-232.

Hartwick and Olewiler, Chapter 10 (pages 307-325)

Creedy, J. and A. D. Wurzbacher. 2001. The Economic Value of a Forested Catchment with Timber, Water and Carbon Sequestration Benefits. Ecological Economics. 38: 71-83.

Englin, Jeffrey. 1990. Backcountry Hiking and Optimal Timber Rotation. Journal of Environmental Management 31:97-105.

*W. J. Reed. 1984. The effects of the risk of fire on the optimal rotation of a forest. Journal of Environmental Economics and Management. 11: 180-190. Pages 145-156 in R. A. Sedjo, editor. Economics of Forestry. Ashgate Press, Burlington: VT.

*Brazee, R. and R. Mendelsohn. 1998. Timber harvesting with fluctuating prices. Forest Science. 34: 359-372. Pages 175-188 in R. A. Sedjo, editor. Economics of Forestry. Ashgate Press, Burlington: VT.

Hartwick and Olewiler, Chapter 10 (pages 325-341).

The Oregon Story "Rethinking the Forests" Oregon Public Broadcasting (video).

• Rethinking the Forests

Wolf, Robert E. 1989. National Forest Timber Sales and the Legacy of Gifford Pinchot: Managing a Forest and Making it Pay. University of Colorado Law Review 60: 1037-1078.

Soules, M. C. 2002. An Analysis of Northwest Forest Plan Use Allocations. Natural Resources Journal. 42 (2): 353-383.

Angelsen, Arlid and David Kaimowitz. 1999. Rethinking the Causes of Deforestation: Lessons from Economic Models. The World Bank Research Observer 14(1): 73-98.

Brown, G.M. and Shogren J.F. 1998. Economics of the Endangered Species Act. Journal of Economic Perspectives 12(3): 3-20.

*Hagen, Daniel A., James W. Vincent, and Patrick G. Welle. 1992. Benefits of Preserving Old-Growth Forests and the Spotted Owl. Contemporary Policy Issues 10 (April) 13-26.

*Montgomery, C. A., G. M. Brown, Jr. and D. M. Adams. 1994. The Marginal Cost of Species Preservation: the Northern Spotted Owl. Journal of Environmental Economics and Management. 26: 111-128. Pages 429-446 in R. A. Sedjo, editor. Economics of Forestry. Ashgate Press, Burlington: VT.

*Clawson, M. 1979. Forests in the Long Sweep of American history. Science 204: 1168-1174. Pages 229-236 in R. A. Sedjo, editor. Economics of Forestry. Ashgate Press, Burlington: VT.

*Harrison, S., J. Bennett and C. Tisdell. 2002. The Role of Non-market Valuation in Forest Management and Recreation Policy. Economic Analysis and Policy 32 (2): 1-10.

*van Rensburg, T. M., G. A. Mill, M. Common and J. Lovett. 2002. Preferences and multiple use forest management. Ecological Economics. 43: 231-244.

*Rose, S. K. and D. Chapman. 2003. Timber harvest adjacency economies, hunting, species protection, and old growth value: seeking the dynamic optimum. Ecological Economics. 44: 325-344.

*Simpson, R. D., R. A. Sedjo and J. W. Reid. 1996. Valuing biodiversity for use in pharmaceutical research. Journal of Political Economy. 104: 163-185. Pages 447-470 in R. A. Sedjo, editor. Economics of Forestry. Ashgate Press, Burlington: VT

Hartwick and Olewiler, Chapter 12

The following is a list of assignments and due dates. All assignments are due in class on the date listed below. In fairness to other students, late assignments will be penalized 1/2 grade for each day or partial day past the due date. Assignments handed in more than 5 days after the due date will not be accepted.

The comprehensive final exam will given during finals week. This examination is currently scheduled for Thursday, December 13 from 1 to 4pm, but may change due to scheduling conflicts. The exact date and time of the final will be confirmed in the second part of the semester by the Registrar's Office.

Examinations:
Midterm Examination		Friday, October 12
Final Examination	currently scheduled for Thursday, December 13 (1-4pm)

Problem Sets:	Distributed	Due
Problem Set #1	September 14	September 21
Problem Set #2	September 28	October 5
Problem Set #3	November 9	November 16

Project Assignments:	Due
Project Preference	September 17
Meeting with Project Sponsors (noon-2pm in Capehart)	September 21
Group Tasks, Timeline and Update	September 28
Section Rough Drafts Due	November 2
Final Sections Due	November 19
Project Discussion Day	November 21
Presentations	To be determined