Welcome to ESM 204:
The Economics of
Environmental Management
Purpose of the class: to help you solve
environmental problems; i.e., to help you
solve generic group projects.
Our goal is to help you see the economic
dimensions of environmental problems and use that
information to generate solutions.
Staff

Prof. Christopher Costello:



Marc Conte, TA:




4410 Bren Hall, 893-5802, costello@bren
Office Hours: Monday/Tuesday 8:30-9:30
3424 Bren Hall, mconte@bren
Office Hours: Tuesday/Wednesday 2:00-3:00
PhD student in Bren
Plan to attend office hours! We want to get to know
you!
Course Vitals



Prerequisites: Calculus & ESM 251 or Econ 100AB
20 lectures, Tuesday & Thursday, 11:00-12:15
1 discussion section per week, run by Marc



You should be familiar with Excel & SOLVER
You are expected to attend all lectures and 1
discussion per week.
Workload: Above average. Expect 8-10 hours per
week outside of class, on average.
Grading





Homework Assignments .. 40%
 5-6 “mini-group-projects”: may/should work with a partner, submit 1
copy with both names
 Late assignments will not be accepted
 May not use the same partner twice (i.e., keep moving!).
 Work should be your own!. Do not share outside your team!
Class/section participation .. 10%
Midterm..20%
 Take Home – Distributed Feb 13, Due Feb 15
Final Exam..30%
 March 22, 12:00-3:00, MSI building
Cheating/plagiarism will not be tolerated.
Readings & Preparation

Readings: available as a reader @ Grafikart


Some also available on web
Several books will be used a lot

Recommended only though you may wish to buy
• Hartwick and Olewiler: The Economics of Natural Resource Use,
2nd Edition (Addison-Wesley, 1998)
• Boardman et al: Cost-Benefit Analysis, 2nd Ed (Prentice-Hall,
2001)
• Kolstad: Environmental Economics (Oxford, 2000)

Lower level book: Goodstein
Preparation
Please come to class prepared.
 Preparation: read the assignments
listed for the day on the webpage.
 I will call on you in class. Please help
make this an interactive experience.
 Questions??

Course Approach



VERY hands-on
Every lecture designed to help solve a generic group
project.
Lecture Style


Begin with brief overview from last class + questions.
Motivate new material.
• I will always motivate material with a hypothetical group project
• If I can’t think of a good use for the material in a real-world, groupproject-like setting, you should not bother learning it.


Cover new material; ask about readings
Open discussion throughout.
What will we cover?

Course broken into 4 sections:
1.
2.
3.
4.
Project Evaluation: Evaluating public
environmental projects and regulations (5)
Measuring benefits and costs (3)
Environmental Regulation (6)
Managing renewable and non-renewable
resources (5)
Section 1: Evaluating Projects
and Regulations
1.
2.
3.
4.
5.
Cost effectiveness vs. cost/benefit, public
goods, externalities
Applications: cost-effectiveness, cost-benefit,
multi-objective methods
Efficiency & surplus; doing benefit-cost
analysis; equity vs. efficiency
Inflation & discounting
Risk & uncertainty
Section 2: Measuring
benefits and costs
1.
2.
3.
Costs of regulation and the “benefits
transfer” approach; travel cost
Revealed preference approaches
Stated preference approaches;
constructed markets; experiments.
Section 3: Environmental
Regulation
1.
2.
3.
4.
5.
6.
Regulatory options and efficiency.
Innovative approaches to regulation
Incidence of environmental regulations.
Spatial and temporal dimensions of
environmental regulations.
Monitoring and enforcement.
Regulatory experience in developed vs.
developing countries, green accounting.
Section 4: Managing
renewable & non-renewable
resources
1.
2.
3.
4.
5.
Rent, water, and common property.
Fishery economics.
Managing the fishery.
Forest economics & management.
Non-renewable resources and
energy.