1. AEC 4201
RESOURCE AND ENVIRONMENTAL ECONOMICS
2. COURSE INSTRUCTORS:
Dr. William Ekere. BSc Agric, MA (Econ), PhD
Ms. Rosemary Isoto Emegu. BSc. Agric, MSc (Agric & Applied Econ).
3. COURSE TYPE:
CORE (BSc Agric IV)
4. COURSE STRUCTURE & LOCATION
This is a 3 credit unit course, 30 lecture hours (2 contact hour per week for 15 study weeks) and tutorial hours (3
contact hour per week for 15 study weeks). Lectures will be conducted in the Faculty of Agriculture Upper Lecture
theatre.
5. COURSE DESCPRIPTION:
Students undertaking this course will be introduced to concepts and applications of environmental and resource
economics. Areas to be covered include: What is environmental economics, Ecological economics, Why study
environmental economics, A look at Environment and economy interactions Concepts of Efficiency and Optimality.
Conditions necessary for resources to be allocated efficiently, Definition of pollution, pollution as an externality,
Reasons for regulating pollution. Importance of valuing the environment, The fundamentals of valuation: Missing
markets and market creation, Definition and meaning of sustainability, Concepts of sustainability conditions for
sustainability. The conditions for sustainability: rising per capita stocks of capital (= rising per capita wealth), Types of
capital, Weak and strong sustainability. Measuring sustainability, Sustainable development
6. Course Objectives
This course seeks to introduce students to the major concepts in resources and environmental economics.
Specific objectives include
To enable students
 Define and describe key resource and environmental economics concepts, ideas and terminologies
 Describe basic tools and techniques used by environmental economists
 Enhance their ability to think economically about resource and environment problems
7. RECOMMENDED REFERENCES FOR READING
1. Tietenberg Tom (2006): Environmental and Natural Resource Economics, 7th Edition Addison
Wesley
2. Pearce D.W. and R.K. Turner (1989): Economics of Natural Resource and the Environment, John
Hopkins University Press.
3. Perman R., Gilvray M.C and Common M. (2003): Natural Resource and Environmental Economics,
3rd Edition Addison Wesley.
8. COURSE CONTENT, METHODS OF INSTRUCTION AND TOOL REQUIRED
No
TOPIC
CONTENT
1
Introduction


METHOD
DELIVERY/TIME
ALLOWED
What is environmental economics, Lectures (2 hours)
resource
Economics
and
Ecological economics,
Why
study
environmental
economics.
OF TEACHING
MATERIALS
Chalkboard, LCD
projector,

A look at Environment and
economy interactions
2
Welfare

Economics and
the

Environment
Concepts of Efficiency and Lectures (2 hours)
Optimality.
Conditions
necessary
for
resources to be allocated
efficiently
Chalkboard, LCD
projector,
Computers
&
software
3
Welfare

Economics and
the

Environment
continued...
Welfare economics as the basis Lectures (2 hours)
for valuation
Consumer and producer surplus
as measures of welfare change
Chalkboard, LCD
projector,
Computers
&
software
4
Welfare

Economics and
the

Environment
continued...
Equivalent
variation
Equivalent
surplus
and
compensating Lectures (2 hours)
and
compensating
Chalkboard, LCD
projector,
Computers
&
software
Tutorial
on Producer /Consumer Tutorial (3 hours)
surplus, compensating and equivalent
variation
5
Property rights 
and resources
allocation

Definitions of Property, rights and Lectures (2hours)
Property rights
Conditions for efficient structure
of property rights
Tutorial on resource allocation


6
7
Chalkboard, LCD
projector,
Computers
&
software
Tutorial (3 hours)
Lectures (2hours
Property regimes
Property rights and the Coase
theorem
Tutorial (3 hours)
Tutorial on property rights
Externalities
 Definition of externalities, Positive Lectures (2 hours)
and
Market
and negative externalities.
Failures
 Types of externalities
Chalkboard, LCD
projector,
Computers
&
software


8
Economics
Pollution
Causes of market failure
Consequencesunregulated
externalities have in a market
economy.
Tutorial (3 hour)
Tutorials on Externalities
of
Lectures (2 hours)
 Definition of pollution,
 pollution as an externality,
 Pollution regulation
Chalkboard, LCD
projector,
Tutorial on the quantitative
examples of economic analysis of Tutorial (3 hour)
alternative ways of controlling
pollution
9
10
11
12
Valuing
the  Valuation and welfare economics, Lectures (2hours)
Environment
 Importance of valuing the
environment.
Valuing
the  The fundamentals of valuation: Lectures (2 hours)
Environment
preference, willingness to pay.
continued...
 The notion of Total Economic
Value.
Tutorial on Stated and revealed Tutorial (3 hours)
preference methods
Valuing
the  Techniques for finding money Lectures (2 hours)
Environment
values – revealed and stated
continued....
preference methods and their
limitations.
 Missing markets and market
creation
Tutorial on techniques of valuing the Tutorial (3 hrs)
environment
Cost
-benefit Emphasis is on appraisal conducted
analysis and the from a social and economic rather Lectures (2 hours)
environment
than financial perspective.
 Valuation of costs and benefits.
 Use of cost benefit analysis to
consider projects which damage,
or are intended to protect, the
natural environment are dealt
with.
Practical on cost benefit analysis
techniques
13
Economics
Natural
resources
Practical (3 hours)
Computer practical
of  Definition of renewable resources.
Lectures (2 hours)
 Use of Renewable resources (
forests, fish stocks etc) and Non
renewable resources (oil , minerals)
Chalkboard, LCD
projector,
Chalkboard, LCD
projector,
Chalkboard, LCD
projector,
Computers
software
and
Chalkboard, LCD
projector,
Computers
software
&
Chalkboard, LCD
projector,
14
Economics of  Concepts of maximum sustainable Lectures (2 hours)
Natural
yield
resources
 Optimal rate of harvest
continued....
 Open access solutions
 Open access and Resource
extinction
Computer Practical on renewable Computer
(3hours)
resource extraction
15
Economics of 
sustainability



Chalkboard
practical Computers
Calculators
Definition and meaning of Lectures 2 hours
sustainability,
Concepts of sustainability
The conditions for sustainability:
Types of capital.
Weak and strong sustainability
Chalkboard
Tutorial
on
Measuring
sustainability.
Models
for
Tutorial (3 hours)
Sustainable development
9. SUMMARY OF TIME NEEDED
Lectures
Tutorials
Practicals
10. COURSE ASSESSMENT:
Continuous assessment
(Quizzes):
Mid-semester test
Continuous assessment
(Practicals):
University Examination:
Computers
30 hrs
24 hrs
06 hrs
There will be 2 Quizzes arising from tutorials and assignments
during week 5, 10 and 15 of the semester
Students will do 1 test in the middle of the semester
Students will write 2 computer based practical reports
10%
Final examination during week 16-17 of the semester
60%
20%
10%
&