Course Outline 2013/2014. Economics and Management of Natural Resources

Transcription

1 Course Outline 2013/2014 Environmental Economics and Natural Resources Group Hollandseweg 1 Leeuwenborch Wageningen Economics and Management of Natural Resources Course code: ENR%31306 Credits: 6 Contact person Lecturers/ Examiners: Hans%Peter Weikard Andries Richter, room 1115 Hans%Peter Weikard, room 1118 Secretariat: Period: 4 Gré Schurink%Heitkönig Room 1117, Tel Time(Place): First lecture: Contents: Mon (C79) Tue (C3030) (C3034) Wed (C79) Thu 10.30%12.15 (C3030) Fri 13.30%15.15 (C75) 17 February, 2014 at (C79) 1 Introduction 2 Prerequisites 3 Learning Outcomes and Exam 4 Activities 5 Literature 6 Schedule

2 1. Introduction The course deals with the theory of natural resource economics and its applications. It is developed for students from different MSc programmes like Environmental Sciences (MES), Climate Studies (MCL), Marine and Coastal Resource Management (MAF, D), Management, Economics and Consumer Studies (MME) and International Development Studies (MID). It is also suitable for students of Forest and Nature Conservation (MFN) and related subjects. After completing Economics and Management of Natural Resources students can write a thesis on environmental and resource economics. 2. Prerequisites Completion of one of the courses Environmental Economics for Environmental Sciences or Environmental Economics and Policy or Microeconomics or a similar course at another university are required. Good knowledge of calculus is also required (You will need to be able to differentiate using product rule and chain rule and to solve simple integrals). 3. Learning outcomes and examination After successful completion of this course students are expected to be able to Apply dynamic optimization techniques to management of non% renewable resources (such as fossil fuels and phosphate) and renewable resources (such as forestry, fisheries, and ecosystems) Analyse economic problems of natural resource use, taking into account dynamics and sustainability Evaluate economic problems of natural resource use, taking into account concerns of intergenerational equity, sustainability, and discounting Understand how institutional dynamics and resource dynamics mutually influence each other in a social%ecological system Translate real%world problems into mathematical models Examination There will be two graded assignments (excercises). The written exam will be an open book exam. You can use your book and lecture notes. To complete the course a pass (5.5) on the exam is required. The assignments count for 1/3 and the exam counts for 2/3 of the final grade. 4. Activities The course consists of lectures and tutorials in each week. To deepen the understanding of theory and to foster the ability to solve problems there are two assignments with review questions and exercises. The assignments are group work, which means problems are solved jointly. (But do not distribute tasks!) Participants are required to read relevant textbook chapters and handouts. 2

3 5. Literature Perman, R. et al. (2011): Natural Resource and Environmental Economics, 4 th edition, Pearson Education, Harlow, chapters 223, 11 and In addition, we will discuss selected scientific articles, as given below. All articles will be made available on the course page. The articles that are indicated in black are mandatory reading for the exam. Articles in blue are recommended reading, but not strictly compulsory. Sustainability Heal, Geoffrey / Zhu, Xueqin (2005) Discounting and environmental quality: When should dual rates be used? Economic Modelling 22, Chichilnisky, Graciela (1996) An Axiomatic Approach to Sustainable Development. Social Choice and Welfare 13, 231%257. Discounting: Weikard, Hans2Peter / Zhu, Xueqin (2005) Discounting and environmental quality: When should dual rates be used? Economic Modelling 22, Optimal Control: Dorfman, Robert (1969) An Economic Interpretation of Optimal Control Theory. The American Economic Review 59(5), 817%831 Forest: Samuelson, Paul A. (1976) Economics of Forestry in an Evolving Society. Economic Inquiry 14, 466% 492. Fisheries: Smith, M. D The New Fisheries Economics: Incentives Across Many Margins. Annual Review of Resource Economics 4: (About rent dissipation in fisheries) Eikeset, A. M., Richter, A. P., Diekert, F. K., Dankel, D. J. and Stenseth, N. C. (2011), 'Unintended consequences sneak in the back door: making wise use of regulations in fisheries management', in Belgrano, A. and Fowler, C. W., eds., Ecosystem Based Management for Marine Fisheries: An Evolving Perspective, Cambridge: Cambridge University Press, 183%217 (About the difficulties of implementing fisheries management) Institutions and Natural Resource use: Brander, J. A. and Taylor, M. S. (1997), 'International Trade and Open%Access Renewable Resources: The Small Open Economy Case', The Canadian Journal of Economics / Revue canadienne d'economique 30(3): 526%552. (About how trade affects resource conservation and welfare under open access) Bulte, E. H. and van Kooten, G. C. (1996), 'A note on ivory trade and elephant conservation', Environment and Development Economics 1(04): (About how trade affects resource conservation decisions under optimal management) Copeland, B. R. and Taylor, M. S. (2009), 'Trade, Tragedy, and the Commons', American Economic Review 99(3): (About why some countries are able to manage their resources sustainably, while others are trapped in a state of overexploitation) Janssen, M. A., Holahan, R., Lee, A. and Ostrom, E. (2010), 'Lab Experiments for the Study of Social%Ecological Systems', Science 328(5978): 613%617. (An overview on how lab experiments have sharpened our understanding of social%ecological systems) 3

4 Ostrom, E. (2008), 'Institutions and the Environment', Economic Affairs 28(3): (About the importance of institutions in resource management) Ostrom, E. (2009), 'A General Framework for Analyzing Sustainability of Social% Ecological Systems', Science 325(5939): 419%422. (About how users can agree on sustainable management through informal arrangements). The complexity of social2ecological systems: Levin, S., T. Xepapadeas, A.2S. Crépin, J. Norberg, A. de Zeeuw, C. Folke, T. Hughes, K. Arrow, S. Barrett, G. Daily, P. Ehrlich, N. Kautsky, K.2G. Mäler, S. Polasky, M. Troell, J. R. Vincent, and B. Walker Social2ecological systems as complex adaptive systems: modeling and policy implications. Environment and Development Economics 18: (An overview on complexity in social2ecological systems) Scheffer, M., W. Brock, and F. Westley Socioeconomic Mechanisms Preventing Optimum Use of Ecosystem Services: An Interdisciplinary Theoretical Analysis. Ecosystems 3: (About the difficulties of managing complex systems) Sethi, R. and Somanathan, E. (1996), 'The Evolution of Social Norms in Common Property Resource Use', American Economic Review 86(4): (About the dynamics of community norms that facilitate sustainable harvesting) Richter, A., van Soest, D. and Grasman, J. (2013), 'Contagious cooperation, temptation, and ecosystem collapse', Journal of Environmental Economics and Management 66(1): 141%158. (About the sudden collapse of sustainable harvesting norms in a community) 4

5 Schedule Time Theme Lecturer Literature Week 24 Monday Introduction: Normative foundations of resource use and sustainability Weikard P.* chapters 2%3, 11 Heal (1998) Discounting Weikard P. chapters 3, 11 Weikard & Zhu (2005) Tutorial: Discounting Optimal Control Theory Weikard Dorfman (1969) Wednesday Optimal resource extraction (1): Introduction Weikard P. chapter 14 Thursday Optimal resource extraction (2): the role of the discount rate, extraction costs and market forms Weikard P. chapters 14 %15 Stock Pollution Problems Weikard P. chapter 16 Friday 13:30%15:15 Week 24 Monday Forest economics (1) Weikard P. chapter 18 Samuelson (1976) Forest Economics (2) Weikard P. chapter 18 Tutorial: Resource extraction problems Weikard ** Wednesday Fisheries (1) Optimal Management Richter P. chapter 17 Thursday Fisheries (2) Open access and rent Richter P. Chapter 17 dissipation Friday 13:30%15:15 Fisheries (3) Different ways to implement Richter Smith (2012) Fisheries Management Week 25 Monday Institutions and Natural Resource use: Trade Richter Bulte (1995) and renewable resources Brander and Taylor Institutions and Natural Resource use: Instutional dynamics and property rights Tutorial: Institutions Empirical evidence and economic experiments Wednesday The complexity of social%ecological systems: Institutional dynamics the community level Thursday The complexity of social%ecological systems: Tipping points and resilience Friday Tutorial: Fisheries, Institutions, and Social% **13:30%15:15 Ecological Systems *P= Perman, R. et al. (2003): Natural Resource and Environmental Economics ** Assignments due Exam: Friday 14 March 2014, in C75. (1997) Richter Ostrom (2008) Copeland & Taylor (2009) Richter Ostrom (2009) Janssen et al. (2010) Richter Sethi and Somanathan (1996) Richter et al. (2013) Richter Levin et al. (2013) Scheffer at al. (2000) Richter 5