Department of Economics
Randall Bluffstone, Professor and Chair
Environmental and Resource Economics (EC 430/530)
Winter 2011
T, Th 4:40 – 6:30
Cramer Hall 283
Professor Randy Bluffstone
Office: Cramer Hall Room 241-H
Telephone Number: 503-725-3938
E-mail address: bluffsto@pdx.edu
Office Hours: Tuesday, Thursday 1:30 – 3:00 pm and by appointment
Students are actively encouraged to use office hours and make appointments to meet. You should not worry
about intruding. Come in!
Affirmative Action
Portland State University supports equal opportunity for all, regardless of age, color, disability, marital status,
national origin, race, religion or creed, sex or gender, sexual or gender identity, sexual orientation, veteran
status, or any other basis in law.
Disability Resources at PSU
Students with accommodations approved through the Disability Resource Center are responsible for contacting
the faculty member prior to or during the first week of the term to discuss accommodations. Students who
believe they are eligible for accommodations but who have not yet obtained approval should contact the DRC
immediately.
Academic Honesty
Academic honesty is expected and required of students enrolled in this course. Suspected academic dishonesty
in this course will be handled according to the procedures set out in the Student Code of Conduct.
Introduction to the Course
Welcome to environmental and resource economics! This course deals with the interactions between nature and
humans through their economic activities. On an almost daily basis we impact nature in our roles as
entrepreneurs, laborers, land owners and consumers, but is there an inevitable tradeoff between economic
activity and environmental quality? For that matter, why does environmental degradation occur at all as a result
of economic activities? How do we know when our collective impacts are “too much?” Is there anything we
can do about those impacts without saving the world at the expense of the inhabitants? What instruments are
available for improving the environment and how do they work? These are the types of questions we will
address in the course.
The goal of the course is to give students a rigorous introduction to the economics of environmental protection.
Environmental and resource economics are big topics! The course will therefore not be comprehensive and
several issues will be given short-shift or completely omitted.
In terms of method, the focus will be on developing in-depth understanding and facility rather than model
building. As in all economics courses, models will be very important, but formal models will not be the basis of
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the course in the same way they might be in microeconomics or trade courses. In this regard, mathematics may
play less of a role than it does in other courses.
Prerequisite
Principles of Microeconomics (Ec 201)
Text and Other Materials
 The textbook for the course is Environmental and Natural Resources (7th Ed.) by Tom Tietenberg. The 8th
edition may also be used and comparable chapters will be announced in class. Pre-7th editions may be used
at the student’s risk. Professor Tietenberg is emeritus professor of economics at Colby College and one of
the leading environmental economists. This text is available for purchase in the bookstore. Two copies are
on two-hour reserve in the library.
 Outside readings are also used in the course. These are available on Blackboard as are assignments, shorter
readings and handouts.
Assignments – All assignments submitted should be typed.
 Readings - There will be readings to support all aspects of the in-class work. Students are asked to
complete readings before the class in which they will be discussed.

Nine outside readings will supplement the text. It is very important that students read and come prepared to
discuss these readings. To create incentives to complete the outside readings that will be the basis of
discussions, students are asked to write minimum two-page summaries of each reading to be submitted in
paper form on the days they are discussed. These summaries should be double-spaced with margins one
inch all around. Grading of these summaries will be on an ordinal 1, 2, 3 basis. Emailed submissions are
not acceptable. There is no need to summarize readings from the Tietenberg book.

Home Assignments - There will be three home assignments during the course. Expected dates for
distributing these assignments are given on the course outline. These assignments will be discussed and
then graded on an ordinal (i.e. 1, 2, 3, 4, 5) scale based on effort, completeness, accuracy and methodology
chosen. These assignments will offer students the opportunity to work through some of the concepts
presented in the readings and discussed in class. They should be done and submitted individually, but
limited discussion and consultation are acceptable.

Examinations – There will be midterm and final examinations. Both exams are comprehensive in the sense
that they could include material from the beginning of the course up to the date of the test, though the final
exam will focus on post-midterm topics. Dates for these exams are given below.
Midterm Examination: Tuesday February 8, 2011 in class
Final Examination: Tuesday March 15, 2011 17:30 – 19:20 CH 283 (normal classroom)
Additional requirements for students enrolled in Econ 530:
 Though most exam questions will be common to Econ 430 and Econ 530, some more advanced questions
may be substituted on the examinations of students enrolled in Econ 530.
 Instead of summarizing the readings discussed in class, students enrolled in Econ 530 will be required to
provide three-page analyses and critiques. These should be double-spaced with margins one inch all
around and will be graded ordinally (1, 2, 3, 4, 5) based on the level of effort put forth and the degree of
insight shown. These analyses should briefly summarize readings, to the extent possible evaluate the
methodologies used and provide critiques. Students might try to address the following questions: Would the
analytical methodology or logic be considered standard and at a high level given the other literature with
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which students are familiar? Are there any innovations used that seem particularly interesting? Are results
convincing, but not overstated? Could more have been done with the method and data?
Makeup Exams and Late Submissions of Work
The midterm and final exams are to be taken on the dates indicated unless there is a serious illness involved.
No makeup exams will be given. PLEASE PLAN ACCORDINGLY.
Assignments are to be turned in at or before the deadline. In fairness to students who submit their work on
time, for each day an assignment is turned in late a grade penalty of 25% will be assessed. Work that is
submitted after class (e.g. even ½ hour), but not a full day, will also be penalized 25%. Work that is 1½ days
late is penalized 50%.
Attendance and Class Participation
Class attendance is mandatory, and class participation is included in the grading structure of the course. I
recognize that you may occasionally have to miss a class meeting, but it is also important to recognize
responsibilities to your colleagues. PLEASE COME TO CLASS AND COME PREPARED! Repeated
absences or attendance without having prepared will result in minimum loss of most or all of the class
participation points.
Grading Structure - Total of 1000 Points
 Midterm examination:
 Final examination
 Assignments:
 Class participation and attendance:
 Outside Reading summaries:
250 points
300 points
150 points
100 points
200 points
Criteria for Grading Exam Questions and Assignments
Percentage of
Criteria
Points Received
100%
Complete correct answer, nothing missed; demonstrates in-depth,
full understanding of the subject matter.
90 - 99%
Virtually complete, correct answer; something small missed;
perhaps a calculation error; answer suggests less than complete
understanding of the topic.
80 - 89%
Mostly complete and correct answer; significant, but still
incomplete understanding of the subject addressed by the
question.
70 - 79%
Partially correct, incomplete answer; Evidence of partial
understanding of the topic.
After the midterm examination a grading scale will be provided so you know how you are doing as the course
progresses. The following grading scale is the strictest that will be used for determining final grades. This
means that if you earn an amount of points within a given category, you will at least receive that grade. Often,
but not always, fewer points are required.
Number of Points Received (out of 1000 possible)
960
920
880
840
Minimum Grade
A
AB+
B
3
800
760
720
680
640
620
600
BC+
C
CD+
D
D-
Course Outline
 Topics covered are listed in order by day, but the timing of readings covered should be considered
approximate. All assignments will be announced in class.
 Readings and home assignments are listed directly across from the class meeting dates and topics with
which they are associated. “Tietenberg” refers to the 7th edition text. 8th edition alternative will be
announced in class.
Class
Meetings
Week #1
1/4
1/6
Topics Covered
Outside Readings and Home
Assignments (assigned in
class)
I. Introductory Concepts and Analytical Methods


Week #2
1/11
1/13
Week #3
1/18
1/20
Week #4
1/25
1/27
Week #5
2/1
2/3
Week #6
2/8
2/10
Week #7
2/15
2/17
Text Assignments
(confirmed in class)
Review of syllabus and key
environmental challenges
Read on own – RB 
interviewing new professors


Analytical methods
Cost-benefit analysis and the
environment

Thurs: Tietenberg
Ch. 1, 2

Tues: Tietenberg
Ch. 3
Market and policy failures

Tues: Tietenberg
Ch .4

Sustainability

Thurs: Tietenberg
Ch.5

Economics of pollution
control

Tues: Tietenberg Thursday
Reading #4: Levinson (2010)
Ch.15
Thurs:
Exam
Review



Thursday
Reading #1: Robinson (2007)
Assignment #1 Distributed
Thursday
Thursday
Reading #2: Carson (2010)
Assignment #1 Due Thursday
II. Topics in Environmental and Resource Economics

Midterm Examination Tuesday

Instruments for controlling
stationary source pollution
Pollution trading
Thursday
Reading #3: Solow (1993)
Thurs: Tietenberg Thursday
Reading #5: Heal (2009)
Ch 16
Assignment #2 Distributed
Thursday
Thursday
Reading #6:
http://www.epa.gov/airmarkt/
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with main focus on Acid
Rain Program at
http://www.epa.gov/airmarkt/p
rogsregs/arp/index.html
Assignment #2 Due Thursday
Week #8
2/22
2/24

Global air pollutants

Tues: Tietenberg Thursday
Reading #7 Keohane (2009)
Ch. 17
Assignment #3 Distributed
Thursday
Week #9
3/1
3/3

Economics of forests

Tues: Tietenberg Thursday
Reading #8 Dietz and Stern
Ch. 12
(2008)
Assignment #3 Due Thursday
Week #10
3/8
3/10

Environment and economic
development

Tues: Tietenberg Thursday
Reading #9: Blackman (2010)
Ch. 22
Final Examination: Tuesday March 15, 2011 17:30 – 19:20 CH 283 (normal classroom)
Bibliography
Reading
1
Author
Lisa Robinson
2
Richard
Carson
3
Robert Solow
4
Arik Levinson
5
Geoffrey Heal
6
U.S.E.P.A.
7
Nathanial
Keohane
8
Simon Dietz
and Nicholas
Stern
Allen
Blackman
9
Bibliographic Reference
“How US government Agencies Value Mortality Risk Reductions,” Review of
Environmental Economics and Policy, Oxford University Press, Summer 2007
“The Environmental Kuznets Curve: Seeking Empirical Regularity and Theoretical
Structure? Review of Environmental Economics and Policy, Oxford University
Press, Winter 2010
“An Almost Practical Step Toward Sustainability, Resources Policy, September
1993.
“Offshoring Pollution: Is the United States Increasingly Importing Polluting
Goods?” Review of Environmental Economics and Policy, Oxford University
Press, Winter 2010
“Climate Economics: A Meta-Review and Some Suggestions for Future
Research,” Review of Environmental Economics and Policy, Oxford University
Press, Winter 2009
http://www.epa.gov/airmarkt/ and especially
http://www.epa.gov/airmarkt/progsregs/arp/index.html
“Cap and Trade, Rehabilitated: Using Tradable Permits to Control US Greenhouse
Gases,” Review of Environmental Economics and Policy, Oxford University
Press, Winter 2009
“Why Economic Analysis Supports Strong Action on Climate Change: A
Response to the Stern Review’s Critics,” Review of Environmental Economics
and Policy, Oxford University Press, Winter 2008
“Alternative Pollution Control Policies in Developing Countries,” Review of
Environmental Economics and Policy, Oxford University Press, Summer 2010
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