Natural Resource Economics:
Issues in Scarcity, Sustainability and Well-Being

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Econ 4410
Spring 96
MWF 10:00-10:50

 J Shogren
121 Ross Hall
766-5430
jramses@uwyo.edu
Office Hrs—Monday and Wednesday afternoon
and by appointment

Introduction

This course explores the use of natural resources from an economic perspective. The goal is to examine economic theories of natural resource scarcity and sustainability, the measurement of well-being and green accounts, conflicts and environmental degradation from natural resource use, global change issues, and development questions.

Grading

Midterm exam 25%
I usually give out 4-6 essay questions a week before the exam, and then pick a subset of these questions for the exam

 Final exam 35%
Again I give out 4-6 questions a week before the final, and pick a subset for the final.

 Paper 40%
You will identify, examine, and propose a solution to an existing conflict over the use of natural resources. The conflict can be local, regional, national, or international. The objective is to use the economic tools discussed in class and the readings to thoroughly explore the underlying economic institutions, economic incentives of the people and groups involved, their benefits and costs, and the economic and political attractiveness of alternative policy options. The paper should be no longer than 25 pages of text, so you should be precise but terse in your arguments.

 —Paper Proposal and Outline due February 2
—Paper outline due February 26
—Optional draft of paper due April 15
—final paper due May 3

Readings

Required Books

 There are two required books, plus there will be additional readings as needed throughout the semester.

 Dasgupta, Partha (1992). An Inquiry Into Well-being and Destitution. Oxford: Oxford University Press.

 Daly, Herman, and John Cobb, Jr. (1989). For the Common Good. Boston: Beacon Press.

 Other Texts that Might Prove Useful

 Cairncross, F. (1992). Costing the Earth. Boston: Harvard Business School Press.

 Costanza, R., ed. (1991). Ecological Economics: The Science and Management of Sustainability. New York: Columbia University Press.

 Hartwick, J. and N. Olewiler (1986). The Economics of Natural Resource Use. New York: Harper and Row.

 Milon, J. W. and J. Shogren (1995). Integrating Economic and Ecological Indicators. Westport, CT: Preager Press.

 Myers, N. (1992). The Primary Source. New York: Norton.

 Pearce, D., E. Barbier, and A. Markandya (1990). Sustainable Development: Economics and Environment in the Third World. London: Earthscan.

 Repetto, R., et al. (1989). Wasting Assets: Natural Resources in the National Income Accounts. Washington, D.C.: World Resources Institution.

Tietenberg, T. (1996). Environmental and Natural Resource Economics. New York: Harper Collins (4th edition).

World Bank (1992). Development and the Environment. World Development Report 1992. Washington, D.C.: World Bank (or more recent issues).

Useful Journals to Look at
Land Economics, Journal of Environmental Economics and Management, Journal of Environmental Management, Ambio, Ecological Economics, American Journal of Agricultural Economics, Environmental and Resource Economics, World Development, Science, Environment and Development Economics, etc.
 

 

Course Outline

1. Introduction

Economic and Ecological Worldviews
Natural Resource Use, Conflicts, and Resolutions
Economic Methods: Strengths and Weaknesses

 2. Natural Resource Scarcity and Sustainability

Definitions of Scarcity
Definitions of Sustainability
Resource Stewardship: Development and Well-being
Alternative World Views

 3. Well-Being: Theory and Measurement

Consumption-based Well-being
Health-based Well-being
Other Measures

 4. Allocation of Natural Resources and Exchange Institutions

Exchange Institutions
Markets and Market Failure
Public Goods, Common Property, Externalities
Nonmarket Allocation
Household Production

 5. Prices, No Prices, and Green Accounting

Benefit-Cost Analysis
Market Prices
Nonmarket Valuation
Green Accounting
Macroeconomic Policy

 6. Time and Natural Resource Use

Efficient Allocation over Time
Discounting
Nonrenewable Resources
Minerals
Energy
Renewable Resources
Fisheries
Forests
Market Structure

 7. Natural Resource Use, Environmental Degradation, and Conflict

Agriculture and Soil
Water Use and its Contamination
Biodiversity and Ecosystem Functions
Land and Multiple Use
Forests and Deforestation
Fisheries and Overharvesting
Minerals and Pollution

 8. Population, Poverty and Equity

Population Growth and Development
Poverty, Nutrition, and Labor
Human Capital
Fertility and Resource Use
Intra- and Inter-generational Equity
Incentives and Information

 9. Global Change and International Cooperation

Resource Use and Global Change
North-South Issues of Resource Use
Treaty Formation and the Coase Theorem
International Institutions
Limits to Negotiation

 10. Natural Disasters

Natural Disasters and Irreversibility
Alternative Risk Reduction Technologies
Natural Disasters and Natural Insurance

 11. Policy Reform and Visions of the Future

Incentive Systems
Price and Quantity Rationing
Free Trade
Tax Policy
Research & Development
Labor
Other Issues