Approved by University Studies Sub-Committee. A2C2 action pending.
WINONA STATE UNIVERSITY
PROPOSAL FOR UNIVERSITY STUDIES COURSES
Department ______Economics and Finance______Date ______3/18/03______
_Economics 315______Environmental and Natural Resource Economics______3___
Course No.Course NameCredits
This proposal is for a(n)__X__ Undergraduate Course
Applies to:__X__ Major___X___ Minor
_____ Required_____ Required
__X__ Elective__X__ Elective
University Studies (A course may be approved to satisfy only one set of outcomes.):
Course Requirements:
Basic Skills:Arts & Science Core:Unity and Diversity:
_____ 1. College Reading and Writing_____ 1. Humanities_____ 1. Critical Analysis
_____ 2. Oral Communication_____ 2. Natural Science __X__ 2. Science and Social Policy
_____ 3. Mathematics_____ 3. Social Science_____ 3. a. Global Perspectives
_____ 4. Physical Development & Wellness_____ 4. Fine & Performing Arts_____ b. Multicultural Perspectives
_____ 4. a. Contemporary Citizenship
_____ b. Democratic Institutions
Flagged Courses:_____ 1. Writing
_____ 2. Oral Communication
_____ 3. a. Mathematics/Statistics
_____ b. Critical Analysis
Prerequisites ______Economics 201 or instructor’s permission______
Provide the following information (attach materials to this proposal):
Please see “Directions for the Department” on previous page for material to be submitted.
Attach a University Studies Approval Form.
Department Contact Person for this Proposal:
______Matt _____
Name (please print)Phonee-mail address
University Studies Course Approval
Department or Program: Economics
Course Number: 315
Semester Hours: 3
Frequency of Offering: Once Every Year
Course Title: Environmental and Natural Resource Economics
Catalog Description: An introduction to the economics of natural resource management and environmental quality. Theory and policy in the use of nonrenewable and renewable resources, and in the control of pollution. Current issues in those areas are featured. Prerequisite: Econ 201 or instructor’s permission.
This is an existing course previously approved by A2C2: Yes
This is a new course proposal: No
University Studies Approval is requested in: Unity and Diversity: Science and Social Policy
Attachments: The syllabus explains what are typically covered in this course. It also points out in which parts of the course the five outcomes for science and social policy courses (a-e) are addressed. The syllabus is included in this application for purposes of illustration. Each faculty member is still responsible for his/her own course syllabus. Examples of projects and homework assigned to students are also included in this application. They illustrate some of the learning activities that students undertake aside from exams.
As required by the approval process, the following address the five outcomes listed for Science and Social Policy courses and document course content and learning activities relevant to the course outcomes:
a. understand the scientific foundation of the topic;
This course focuses on issues involving land (extraction of resources), air (climate change and effects of pollution), and water (access and quality). In all three areas, the scientific basis for the environmental issue is presented. For example, students learn the possible physical effects on the surrounding environment from the extraction of minerals, transportation of oil, and disposal of mineral waste, and how these effects depend on technology. In the area of water, one of the major issues in the world today is the general inadequate access to “clean” water. Students learn the effects of poor water quality and access on human health and environmental health. Finally, in the area of air, students learn the scientific underpinnings of global warming, ozone depletion and acid rain.
b. understand the social, ethical, historical, and/or political implications;
Every environmental issue has a unique history, a history that helps limit possible solutions. For example, the problem of water access from economics standpoint is a simple one of under pricing of a commodity (water). However, given the special status water has, raising the price of water to equate quantity demand with quantity supplied is usually not a policy option. Moreover, in the Western United States any possible solution is compounded by a confounding history of legal rulings and traditions, and governmental decisions. In contrast, in rural India, communities have worked out complex but accepted methods of allocating water.
Consequently, to understand the complexities of such environmental issues, students will study an overview of such histories.
c. understand and articulate the need to integrate issues of science with social policy;
Science and social policy go hand-in-hand with environmental issues. Students will learn what science can and cannot contribute to environmental issues and the subsequent policy concerns.
Global warming is a good example. Science has demonstrated that the average temperature of the Earth’s atmosphere is increasing, and increasing at faster rate than in previous upturns.
d. evaluate the various policy options relevant to the social dilemmas posed by the science;
In each section of the course, students will use the tools of economics to evaluate the various policy options for each environmental issue. In general, economics is used for two purposes in this arena. One is to evaluate whether it makes economic sense to engage in a particular policy. For example, what do we mean by “clean” water? There may be different goals based on science, but from an economics standpoint, water should continue to be “cleaned” as long as the marginal benefit from the additional removal of impurities exceeds the marginal costs. Thus, what is the “safe” level of arsenic in drinking water?
The other use of economics is to find the least cost method of achieving a particular goal, even if that goal does not make economic sense. So, in the example above, regardless of the target level of arsenic, there is still is the issue of achieving the goal at least cost to society.
e. articulate, choose among, and defend various policy and/or scientific options to cope with the challenges created.
This will occur while students perform (d). In doing so, students will weigh the science with the economic analysis of a proposed option. While, this is an integral part of the course, this is also the focus and point of the required paper (see syllabus).
ECON 315 - ENVIRONMENTAL AND NATURAL RESOURCE ECONOMICS
Instructor: Professor Matthew Hyle Telephone Number: 457-5496
Mail Address: 407 Somsen Hall, e-mail address:
Department of Economics,
Winona State University,
Winona, MN 55987
Office Hours – Listed are my usual office hours: Tuesday and Thursday, 11AM – 2PM,
Wednesday and Friday, 2PM to 4PM, and by appointment.
I am usually in my office ten or so minutes before class as well. There may be occasional deviations from this weekly schedule. I am in class the following days and times: MWF – 8-8:50, 11-11:50, 12-12:50 and 1-1:50.
TEXTBOOKS:
The required texts are 1) Tom Tietenberg, Environmental Economics & Policy, 3rd edition, Addison-Wesley, 2001, and 2) Paul Portnoy and Robert Stavins, editors, Public Policies for Environmental Protection, 2nd edition, Resources for the Future, 2000.
On reserve at Maxwell Library is Tom Tientenberg, Environmental and Natural Resource Economics. 3rd Edition, HarperCollins Publishers, 1992. This is a very good source book for natural resource and environmental policy.
COURSE OBJECTIVES
The first objective of this class is to provide each student a framework to analyze the economic effects of problems and issues in environmental policy and natural resource management. Another goal is to familiarize each student with the current issues in the these areas.
Besides the objectives concerning content, another goal is to provide each student with the practice of economic analysis. Each student shall perform suitable rudimentary analysis in natural resource management and environmental policy. Another objective of this course is to permit each student practice in communicating and interpreting economic analysis.
UNIVERSITY STUDIES
University policy requires the following information for your benefit. Economics 315 fulfills the Science and Social Policy requirement in the University Studies Program. As such, this course seeks to promote students’ abilities to
a. understand the scientific foundation of the topic;
b. understand the social, ethical, historical, and/or political implications;
c. understand and articulate the need to integrate issues of science with social policy;
d. evaluate the various policy options relevant to the social dilemmas posed by the science; and
e. articulate, choose among, and defend various policy and/or scientific options to cope with the
challenges created.
These outcomes are identified in parenthesis in the CLASS SCHEDULE below.
EXPECTATIONS OF THE STUDENTS
Although there are no formal prerequisite classes, Principles of Microeconomics provides a relevant foundation of economic theory for the student. In particular, the concepts and tools of demand and supply curves, market equilibrium, cost curves (marginal and average costs) appear throughout the class. An exposure to intermediate microeconomics, and fundamentals of business finance are advantageous. The ability to use and interpret functions - analytically and graphically - and to manipulate equations is also advantageous.
This course requires a reasonable amount of reading. The weekly load will vary. Read the required material before the lecture. Much of the reading is not explicitly covered in class. All required reading is either in your text or is available at the Maxwell Library (WSU).
GRADING
Each student's grade depends on that student's performance on class participation, three exams, a paper and other written work. The three exams are each weighted 30%. The “paper“ is the following weights are used to determine the student's final class average: 3 exams and paper 90% Class Participation – 10%, In addition, there will optional homework.
Each exam covers one section of the course. Each exam covers a particular portion of the material. The 1st exam covers the economic tools and then applies them to energy and mineral extraction issues. The 2nd exam covers the economics of water quantity and quality The 3rd and final exam covers the issues associated with the various types of air pollution: global effects (climate change), regional effects (acid rain) and local effects. Each exam consists of definitions, short answer, essays and problems. The essays and problems are similar in nature to discussion questions, problems and homework. Makeup exams are possible but not probable. There is no makeup for the final exam.
The reports and paper assignment(s) are distributed in class later. Students may (but not required) work in pairs. At the end of the semester, the best three scores among the 3 exams and the paper along with class participation determine the student’s final grade
The class participation grade depends on the student's willingness to participate in class, general attendance record, and preparedness in class.
Homework is distributed in class. Homework is due on the due date (no late assignments). The 2 lowest homework scores are dropped in computing the average homework score. If that homework score is greater than the lowest scores, the weight on that item falls to 15% and the homework average has a weight of 15%. Otherwise, the homework does not count.
The Tietenberg text is denoted as T, while the Portnoy and Stavins Text is denoted as PS. Chapters are in boldface and specific pages are in italics. So, T - 5:84-91 would mean pages 84-91 of the 5th chapter of Tietenberg.
Occasionally, there may be additional readings assigned. Students will be given the citation, or else the reading will be available in PDF format at course1.winona.edu\mhyle\ec315.
CLASS SCHEDULE
WeeksTopic Readings
1-2 Economic Theory and Tools
for Environmental Policy (b,d,e) T-2,4,5:84-9, 7, 13
PS- 1,2,3
3-5 Energy and Mineral Extraction (a,b,c,d,e) T – 8, 19
PS – 7,8
FIRST EXAM
6-10 Water: Quantity and Quality (a,b,c,d,e) T – 9, 17
PS - 6
SECOND EXAM
11-15 Air Pollution(a,b,c,d,e) T – 8,14,15,16
PS – 4,5
FINAL EXAM: Monday, December 16th, 8am – 10am
*
ECON 315 - Papers and reports
Papers
Each student or group must write an original research paper of at least 5 pages on a topic in environmental or natural resource economics. Each student chooses a topic with consultation with me: I must approve the topic. Topics should be chosen by October 30. Regardless of the topic, each paper should address a particular issue in environmental economics or natural resource economics by first stating the problem, and then evaluating various (more than one) policy options.
Drafts are welcome. I will comment on drafts anytime during the year. Papers should be written in a professional tone and format.
Summaries
A student may choose to do either three reports on journal articles or one book report. Reports are summaries of readings, either articles, papers or books. Before choosing a reading, check with me for appropriateness. The general guideline is that the reading must be of an academic not generalist reading. Articles from newspapers, and magazine are typically not appropriate.
The desired format for a summary on a reading is the same whether the report of an article or a book. Summary on articles, chapters from collected readings, or papers from a conference should be 2-3 pages, and reports on books 4-6 pages. Each report should include:
1) A statement of the scope or intent of the reading,
2) A description of the model/results,
3) A summary of the conclusions,
4) A tie-in by you as to how this publication fits into our course coverage, and
5) A judgment by you as to what you learned of value from the reading.
You may choose a reading in any area of environmental economics or natural resource economics. The WSU library has many books and academic journals containing articles in these areas. Examples in our library include Land Economics,Natural Resources Journal, and the Journal of Water Resources. Moreover, other journals in science and economics sometimes have appropriate articles. Journal articles must have been published in 1998 or later.
In your summary, follow the normal conventions concerning citations, punctuation, spelling and grammar. A summary need not be typed, but it must be legible and neat. Remember, since I have to read the summary, I decide on their legibility.
When writing, do not assume that I have read the article or that I know anything about the topic. Your goal is to explain the article to a reader who knows some economics but not necessarily environmental or natural resource economics.
Due Dates:
Summaries are accepted anytime through Friday, November 29. You may use the summaries to write your paper. The paper should be turned by the last class day (Friday, December, 6th) in order to receive a grade this semester. Students can receive an incomplete if they choose to turn the paper in later.
ECON 315
1st Assignment
Draw a market equilibrium (demand and a supply curve) for clean tap water in Winona per month.
1) Describe how the following will affect the market price for clean water and the equilibrium quantity of water.
a) An increase in the number of people in Winona.
b) An reduction in the price of bottled water.
c) A report from the National Institute of Health warning the public of the possible dangers in using tap water.
2) Suppose that the equilibrium quantity of water used per month will use up the entire supply of Winona groundwater (i.e. tap water) in two years. Furthermore, suppose that the sustainable rate of use is half the current equilibrium quantity.
a) Recalling that the City of Winona is the sole supply of tap water to Winona, what solutions (if any) could the b) Which solutions, if any, are the most economically efficient?
ECON 315
2nd Assignment
A firm is considering placing a brewery next to a lake in order to take advantage of the free water. The operations of the brewery will dump “dirty” water back into the lake. The lake can assimilate the “dirty water” if the brewery only dumped one “load": two years later, the lake is “pristine”. Each “load” of dirty water generates $150,000 worth of benefits to the brewery. The initial reduction in water quality would kill 200 fish per year, and would make swimmers and boaters ill to the equivalent cost of $3,000 per year. Each additional “load” would double the number of dead fish and double the costs to boaters and swimmers when compared to the effects of the previous load. The recreational value lost due to the dead fish is about $12,000 per 200. In addition, any home abutting the lake would have to install a water cleaning system at an annual either cost of $2,000 or use bottled water at an annual cost of $1,500 plus the inconvenience. Assume that the only boaters and swimmers come from households (average 4 per home)
a. Assume there is only one home on the lake, what is the optimal outcome in terms of the number of loads of dirty water dumped into the lake? If the homeowner has property rights to clean water what will be the likely outcome? If the brewery has the property rights to use the water what will be the likely outcome?
b. If there are 200 homes on the lake, what is the optimal outcome in terms of the number of loads of dirty water dumped into the lake? If the homeowners have the property rights to clean water what will be the likely outcome? If the brewery has the property rights to use the water what will be the likely outcome?
c. What is the maximum number of homes that can be “on” the lake and still make the brewery socially optimal if the homeowners have the property rights,