Overview

Environmental and Resource Economic Policy Seminar

The energy environment and resource field covers the economics of pollution, renewable and exhaustible resources with a focus on energy. The field covers both theory and empirics, with an emphasis on well identified studies of regulatory cost or benefit.

The first two courses in the field include the fundamentals of resource economics including the classic Hotelling problem, both theory and empirical; optimal control and dynamic programming in a resource context; Pigouvian prices, double dividends, and the Coase theorem; pollution control and enforcement; measuring the value of clean air and clean water; and measuring the costs of clean air and water; electricity supply and demand,the economics of energy and fuel efficiency, decision making under uncertainty and with anticipated learning; climate change policy; hyperbolic discounting; disentangling risk aversion and intertemporal substitutability. and a collection of topics in environmental policy design and implementation (with an emphasis on market-based emissions regulation). The field also includes a third course that presents a much more detailed view of the dynamic issues in resource economics including stock pollutants and climate change.

Student Career Paths

Reflecting the policy importance of the subject, the faculty is dedicated not only to academic pursuits, but also to policy and to governmental and non-governmental organizations. Similarly, some students prepare to pursue academic careers, while others prefer to work closer to policy makers and projects managers, finding employment in the private and non-profit sectors.

Courses

In the second year, students decide on a major field of study, taking at least two courses in the field and preparing for the field exam at the conclusion of the second year. The following are the graduate course offerings in the Energy, Environmental, and Resource Economics Field for the 2004-2005 academic year.

ARE 261: Environmental and Resource Economics

Theory of renewable and nonrenewable natural resource use, with applications to forests, fisheries, energy and climate change. Resources, growth and sustainability. Economic theory of environmental policy. Externality; the Coasian critique; tax incidence and anomalies; indirect taxes; the double dividend; environmental standards; environmental regulation; impact of uncertainty on taxes and standards; mechanism design; monitoring, penalties, and regulatory strategy; emissions markets.

ARE 262: Non-Market Valuation

The economic concept of value; historical evolution of market and non-market valuation; revealed preference methods; single site demand, multi-site demand, corner solution models, and valuation of quality changes; averting behavior; the hedonic method; contingent valuation; other stated preference methods: ranking, choice, conjoint analysis; the value of life and safety; sampling and questionnaire design for valuation surveys.

ARE 263: Dynamic Methods in Environmental and Resource Economics

This course prepares students to conduct research using dynamic analysis and optimization. It emphasizes methods, illustrating these using applications in environmental and resource economics. We introduce dynamic programming and the Euler equation, showing how to conduct comparative statics of a steady state. We discuss the use of dynamic modeling in the climate policy problem. We consider specific functional forms, for which closed form solutions are available, and emphasize numerical methods for problems that do not admit closed form solutions. We develop the dynamic analog of familiar static problems (e.g. “taxes versus quantities”). We discuss the role of risk and anticipated learning in dynamic models. Methods of phase portrait analysis are used to analyze two-dimensional differential systems. We study the necessary conditions for optimality in both deterministic and stochastic continuous time models. Decision making under the threat of catastrophic events (e.g. abrupt climate change) illustrates these methods. We show how non-convexities, such as those arising in the “shallow lake”, change the optimization problem. We consider dynamic games, e.g. where two or more agents harvest a stock, and the related problem arising under non-exponential discounting. We show how the disentanglement of risk aversion, intertemporal substitutability, and ambiguity aversion requires richer models.

ARE 264

This course is designed to help prepare graduate students to conduct empirical research in energy and environmental economics. This course has two broad objectives. The first is to develop an in depth understanding of specific empirical methods and research designs that are commonly used in the field of energy and environmental economics. The second is to familiarize students with the empirical literature that uses these methods to address important energy and environmental economics questions. Methods include experimental research designs, semi-parametric and parametric estimation of treatment effects, instrumental variables, discrete choice methods, and more structural estimation approaches. Applications include electricity supply/demand, the economics of energy efficiency, environmental policy design and implementation (with an emphasis on market¿based emissions regulation).

ARE 269: Seminar in Natural Resource and Environmental Economics.

Weekly presentations by students, faculty, and outside speakers on current research in the areas of environmental and natural resource economics.

Faculty

	Max Auffhammer Fields: Climate Change, Forecasting, Air Pollution and Development, Spatial Analysis.
	Peter Berck Fields: The economy-wide costs and employment effects of natural resource policy and environmental regulation; forest and fishery economics and policy.
	Anthony Fisher Fields: Environmental decisionmaking under uncertainty, optimal timing of climate change policy, potential impacts of global warming on agriculture and other sectors of the economy.
	Meredith Fowlie Fields: Energy, environmental regulation.
	J. Keith Gilless Fields: Economics of forestry, especially forest management planning, wildland fire protection, international trade in forest products, and regional economics.
	Michael Hanemann Fields: non-market valuation, discrete choice modelling, water demand and pricing, water utility economics, uncertainty and irreversibility in environmental management, environmental policy, climate change.
	Larry Karp Fields: Trade in carbon permits, trade liberalization and environment, nonrenewable resources models, taxes vs. quotas in global warming, agriculture and environment in China, fisheries, learning in pollution regulation.
	Jeffrey T. LaFrance Fields: Property rights and public land management; land degradation; sustainable agriculture and natural resource use; dynamic games in natural resources.
	Gordon C. Rausser Fields: Environmental regulations, air quality, water quality, quantification of environmental externalities, biodiversity, stigmatized property values, collective decision-making and multilateral bargaining in water resource systems.
	David Roland-Holst Fields: Development; Energy; Environment and climate change; Trade; Food and Agricultural Policy.
	Jeff Romm Fields: Distribution, growth, and resource sustainability; watershed and basin policy; race and resources.
	Wolfram Schlenker Fields: Environmental and Resource Economics, Applied Econometrics.
	Leo K. Simon Fields: Multilateral negotiations over common property resource allocation, esp. water allocation; mechanism design and environmental regulation; comparing agri-environmental policy processes in the U.S. and Europe.
	David L. Sunding Fields: Water resources, pesticides, wetlands, pollution monitoring, nonuniform regulation.
	Christian Traeger Fields: Environmental Economics, Decision Theory, Intertemporal Welfare Analysis, climate change
	Catherine Wolfram Fields: Energy economics, environmental regulation in the energy sector.
	David Zilberman Fields: Environmental policy, water, pest control, climate change, environmental risks and technologies.

Past Student Placements

2012	Sarah Dobson	Assistant Professor	Department of Economics	University of Alberta
2012	Leslie Martin	Assistant Professor	Department of Economics	University of Melbourne
2012	Charles Seguin	Assistant Professor	Department of Economics	L'Université du Québec à Montréal
2012	Steven Sexton	Assistant Professor	Department of Agricultural Economics	NC State
2011	Damian Bickett	Assistant Professor		Williamette University
2011	Howard Chong	Assistant Professor	School of Hotel Admin	Cornell University
2011	Alan Fuchs	Research Economist	Human Development Report Office	UNDP
2011	Brian Gross	Assistant Professor		Humboldt State University
2011	Santiago Guerrero	Researcher	Central Bank of Mexico
2011	Koichiro Ito	Assistant Professor	School of Business	Boston University
2011	Biswo Poudel	Visiting Scholar	Agriculture and Resource Economics	UC Berkeley
2010	Jenny Liu	Assistant Professor	Department of Economics	Portland State University
2009	Zhen Lei	Assistant Professor	Department of Energy and Mineral Engineering	Pennsylvania State University
2009	Jesse Tack	Assistant Professor	Department of Agricultural Economics	Mississippi State University
2008	Ryan Kellogg	Assistant Professor	Department of Economics	University of Michigan
2008	James Manley	Assistant Professor	Department of Economics	Towson University
2008	Hugo Salgado	Assistant Professor	Economics Department	Universidad de Concepcion, Chile
2008	Susan Stratton	Assistant Professor	Department of Economics	Smith College
2007	Ralf Steinhauser	Research Fellow	Economics Program	Australian National University
2007	Hendrik Wolff	Assistant Professor	Department of Economics	University of Washington
2006	Meredith Fowlie	Assistant Professor	Ford School of Public Policy/Economics	University of Michigan
2006	James Hilger	Economist	Bureau of Economics/Consumer Protection Division	Federal Trade Commission
2005	Karina Schoengold	Assistant Professor	School of Natural Resources/Agricultural Economics	University of Nebraska, Lincoln
2005	Jason Scorse	Assistant Professor	International Policy Studies	Monterey Institute of International Studies
2004	Yanhong Jin	Assistant Professor	Agricultural Economics	Texas A&M University
2003	Nick Brozovic	Assistant Professor	Agricultural & Consumer Economics	University of Illinois, Urbana Champaign
2003	Wolfram Schlenker	Assistant Professor	School of International & Public Affairs	Columbia University