EES 255: NATURAL RESOURCE AND ENVIRONMENTAL ECONOMICS

Professor James Sweeney
Spring Quarter, 1995/1996

Reading List

The primary book is Handbook of Natural Resource and Energy Economics, Vol. III, Allen V. Kneese & James L. Sweeney (eds.), Elsevier Science Publishers, Amsterdam, 1993. Additional books you might find helpful include: Managing Planet Earth: Readings from Scientific American, 1990, W.H. Freeman and Company, New York John Hartwick and Nancy Olewiler, The Economics of Natural Resource Use, Harper & Row, Publishers, 1986; P. S. Dasgupta and G. M. Heal, Economic Theory and Exhaustible Resources, Cambridge University Press, 1979; Handbook of Natural Resource and Energy Economics, Vols. I and II.

Readings indicated as "Required Reading" must be read by all students. Those indicated as "Recommended Reading" provide useful further background and analysis but are not a required part of the course. Within a category articles are generally in the order in which they should be read; however, sequencing for the most part is not crucial.

Since the Handbook of Natural Resource and Energy Economics is expensive, the EES Department has purchased sufficient copies for the class at a 50% discount from the $110 price. These will be made available at our cost: $55 plus shipping. Copies can be purchased from Maggie Barstow-Taylor in the EES/OR office for a price, including sales tax of $65. Please bring a check made out to Stanford University when you buy the book from Maggie.

Students are expected to be familiar with basic microeconomic analysis from other courses, at least at the level of EES 212a, and preferably at the EES 212b level. The material will not be covered in lectures. The following areas of thought are particularly important:

• Competitive markets
• Profit maximizing concepts
• Competitive equilibrium price formation
• Economic efficiency concepts
• Efficiency of competitive markets
• Market failure
• Private vs social costs
• Externalities
• Time Value of Money: Interest rates and discounting

BACKGROUND

Required Reading

Allen Kneese and James Sweeney, "Preface to the Handbook", in Handbook of Natural Resource and Energy Economics, Vol. III. (HB)

ECONOMIC THEORY OF DEPLETABLE RESOURCES

Required Reading

• Partha Dasgupta, "Natural Resources in an Age of Substitutability", HB ch. 23.
• James Sweeney, "Economic Theory of Depletable Resources: An Introduction", HB ch. 17
• Geoffrey Heal, "The Optimal Use of Exhaustible Resources", HB ch. 18

Recommended Reading

• Larry Karp and David Newbery, "Intertemporal Consistency Issues in Depletable Resources", HB ch. 19.
• Hotelling, H., "The Economics of Exhaustible Resources," Journal of Political Economy, April 1931, 39, pp. 137-175.

DEPLETABLE RESOURCE MARKET MODELING AND POLICY ANALYSIS

Required Reading

• Margaret Slade, Charles Kolstad, and Robert Weiner. "Buying Energy and Nonfuel Minerals: Final, Derived, and Speculative Demand" HB ch 20.
• Michael Toman, "The Economics of Energy Security: Theory, Evidence, Policy" HB ch 25 Charles Kolstad and Jeffrey Krautkraemer, "Natural Resource Use and the Environment", HB ch 26.
• Dale Jorgenson and Peter Wilcoxen, "Energy, the Environment, and Economic Growth", HB ch 27.

Recommended Reading

• DeVerle Harris, "Mineral Resource Stocks and Information", HB ch. 21
• Dennis Epple and John Londregan, "Strategies for Modeling Exhaustible Resource Supply" HB ch 22.
• Nordhaus, W. D., "The Allocation of Energy Resources," Brookings Papers on Activity, 1973, 3, pp. 527-570.
• John Gibbons, Peter Blair, and Holly Gwin, "Strategies for Energy Use", in Managing Planet Earth: Readings from Scientific American, (MPE), ch. 8.
• Robert Frosh and Nicholas Gallopoulos, "Strategies for Manufacturing", MPE ch 9.
• Garg, P. C. and J. L. Sweeney, "Optimal Growth with Depletable Resources," Resources and Energy, Volume 1, 1978.
• Stiglitz, J. E., "Monopoly and the Rate of Extraction of Exhaustible Resources," American Economic Review, September 1976, 66, pp. 655-661.
• David Teece, David Sunding and Elaine Mosakowski, "Natural Resource Cartels", HB ch. 24.
• Arrow, K. J. and A. C. Fisher, "Environmental Preservation, Uncertainty and Irreversability," Quarterly Journal of Economics, Vol. LXXXVIII; May 1974, No. 2, pp. 312-319.

ECONOMIC ISSUES FOR RENEWABLE RESOURCES

Required Reading

• Gordon Munro and Anthony Scott, "The Economics of Fisheries Management", in HB, Vol. II, Ch 14.
• Thomas Graedel and Paul Crutzen, "The Changing Atmosphere", MPE ch 2.
• Stephen Schneider, "The Changing Climate", MPE ch 3.
• Edward Wilson, "Threats to Biodiversity", MPE ch 5.
• William Ruckelshaus, "Toward a Sustainable World", MPE ch 11.

Recommended Reading

• Young, Robert A. and Robert H. Haveman "Economics of Water Resources: A Survey" in HB, Vol. II.
• A. Michael Spence, A. M., "Blue Whales and Applied Control Theory," Systems Approaches and Environmental Problems, H. W. Gottinger, (ed.) Vandenhoeck and Ruprecht (Gottingen).
• Ruff, L. E., "The Economic Common Sense of Pollution, " in Dorfman and Dorfman. Dales, T. H., Pollution, Property and Prices, University of Toronto Press, 1968.
• Cropper, M. L. and W.E. Oates, "Environmental Economics: A Survey", Journal of Economic Literature, Vol. XXX, June 1992, pp. 675-740.
• Fisher, A. C. and F. M. Peterson, "The Environment in Economics: a Survey," Journal of Economic Literature, March 1976, pp. 1-33.