Environmental Policy and Economics

Readings

• [Kolstad] = Kolstad, Charles. Environmental Economics . 2nd ed. Oxford University Press, 2010. ISBN: 9780199732647.
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• [EESR] = Stavins, Rober, ed. Economics of the Environment: Selected Readings . 4th ed. W. W. Norton Co., 2000. ISBN: 9780393975239.
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• [RFF] = Oates, Wallace, ed. The RFF Reader in Environmental and Resource Management . Resources for the Future, 1999. ISBN: 9780915707966.
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• Kolstad, chapters 1, 2, and 3.
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• Oates, Wallace E. “Introduction: An Economic Perspective on Environmental and Resource Management.” In RFF .
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• Cropper, Maureen L., and Wallace E. Oates. “Environmental Economics: A Survey.” Journal of Economic Literature 30 (1992): 675-740.
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• Portney, Paul R., and Robert N. Stavins, eds. “Introduction.” Chapter 1 in Public Policies for Environmental Protection . 2nd ed. Resources for the Future, 2000. ISBN: 9781891853036.
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• Portney, Paul R. “EPA and the Evolution of Federal Regulation.” Chapter 2 in Public Policies for Environmental Protection . Edited by Paul Portney and Robert Stavins. 2nd ed. Resources for the Future, 2000. ISBN: 9781891853036.
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• Kolstad, chapters 4 and 6.
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• Benefit cost analysis
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• Arrow, Kenneth, et al. “Is there a Role for Benefit-Cost Analysis in Environmental Health, and Safety Regulation?” Science 272 (1996): 221-222.
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• Farrow, Scott, and Michael Toman. “Using Benefit-Cost Analysis to Improve Environmental Regulation.” Environment 2, no. 41 (1999): 12-15, and 33-37.
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• Greenstone, Michael. “Effective Regulation through Credible Cost-Benefit Analysis.” Mimeograph, MIT, 2008.
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• Kelman, Steven. “Cost-Benefit Analysis: An Ethical Critique.” Chapter 15 in EESR .
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• Revesz, Richard, and Michael Livermore. Retaking Rationality: How Cost Benefit Analysis Can Better Protect the Environment and Our Health . Oxford University Press, 2008. ISBN: 9780195368574.
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• Viscusi, W. Kip. “Regulating the Regulators.” University of Chicago Law Review 63 (1996): 1423-1461.
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• Ackerman, Frank, and Lisa Heinzerling. Priceless: On Knowing the Price of Everything and the Value of Nothing . The New Press, 2005. (Read chapters 1, 2, and 9) ISBN: 9781565849815.
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• Sunstein, Cass. “Your Money or Your Life.” The New Republic 230, no. 9 (2004): 27-30. (Review of Ackerman and Heinzerling’s Priceless: On Knowing the Price of Everything and the Value of Nothing .)
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• “What Price Posterity.” Economist , March 23, 1991, p. 73, 1002 words.
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• “Creating Incentives.” Economist , May 29, 1993, p. 13, 1414 words.
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• Brennan, Timothy. “Discounting the Future: Economics and Ethics.” In RFF .
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• Sustainability
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• Arrow, Kenneth, Partha Dasgupta, et al. “Are We Consuming Too Much?” Journal of Economic Perspectives 118, no. 3 (2004): 147-172.
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• Solow, Robert M. “Sustainability: An Economist’s Perspective.” Chapter 5 in EESR .
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• Kolstad, chapter 5.
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• Coase, Ronald H. “The Problem of Social Cost.” The Journal of Law and Economics 3 (1960): 1-44.
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• Kolstad, chapters 11, 12, 13, 14, and 15.
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• Choice of policy instruments
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• Barthold, Thomas A. “Issues in the Design of Environmental Excise Taxes.” Journal of Economic Perspectives 8, no. 1 (1994): 133-51.
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• Cohen, Mark A. “Monitoring and Enforcement of Environmental Policy.” Mimeograph, Vanderbilt University, 1998.
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• Fullerton, Don, and Thomas C. Kinnaman. “Household Response to Pricing Garbage by the Bag.” American Economic Review 86, no. 4 (1996): 971-84.
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• Fullerton, Don, and Sarah West. “ Tax and Subsidy Combinations for the Control of Car Pollution .” NBER Working Paper No. 7774, July 2000. ↗
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• Sandel, Michael J. “It’s Immoral to Buy the Right to Pollute.” Chapter 19 in EESR .
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• Tietenberg, Thomas H. “Economic Instruments for Environmental Regulation.” Chapter 16 in EESR .
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• Wiener, Jonathan. “Global Trade in Greenhouse Gas Control: Market Merits and Critics’ Concerns.” Resources 129 (1997): 13-16.
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• “Clean and Green, or Lean and Mean?” The Economist , December 12, 1992, p. 73.
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• “Taxes for a Greener Environment.” The Economist , June 28, 1997, p. 84.
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• The double dividend hypothesis
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• Goulder, Lawrence H. “Environmental Policy Making in a Second-Best Setting.” Journal of Applied Economics 1, no. 2 (1998): 279-328.
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• Morgenstern, Richard D. “Environmental Taxes: Is There a Double Dividend?” Environment 38, no. 3 (1996): 16-20, and 32-34.
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• Passell, Peter. “When the Benefits are Mostly Modest, What Price Clean Air?” New York Times , April 3, 1997, pp. D2.
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• The SO 2 experiments
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• Schmalensee, et al. “An Interim Evaluation of Sulfur Dioxide Emissions Trading.” Journal of Economic Perspectives 12, no. 3 (1998): 53-68.
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• Stavins, Robert N. “What Can We Learn from the Grand Policy Experiment? Lessons from SO 2 Allowance Trading.” Journal of Economic Perspectives 12, no. 3 (1998): 69-88.
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• Kolstad, chapter 18.
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• Freeman, A. Myrick, and Paul R. Portney. “Economics Clarifies Choices about Managing Risk.” In RFF .
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• Kolstad, chapter 19.
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• Oates, Wallace E., and Robert M. Schwab. “Economic Competition Among Jurisdictions: Efficiency Enhancing or Distortion Inducing?” Journal of Public Economics 35, no. 3 (1998): 333-354.
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• Do environmental regulations slow local economic activity?
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• Greenstone, Michael. “The Impacts of Environmental Regulations on Industrial Activity: Evidence from the 1970 and 1977 Clean Air Act Amendments and the Census of Manufactures.” Journal of Political Economy 110 (2002): 1175-1219.
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• Henderson, J. Vernon. “Effects of Air Quality Regulation.” American Economic Review 86 (1996): 789-813.
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• Does trade harm the environment?
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• Bhagwati, Jagdish, and Herman Daly. “Debate: Does Free Trade Harm the Environment?” Scientific American 269, no. 5 (1993): 41-57.
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• Sanger, David E. “Trade Group Orders U.S. to Alter Law for First Time.” New York Times , January 18, 1996, pp. D1.
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• Copeland, Brian, and M. Scott Taylor. “Trade, Growth, and the Environment.” Journal of Economic Literature 42, no. 1 (2004): 7-71.
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• Antweiler, Werner, Brian Copeland, and Scott Taylor. “Is Free Trade Good for the Environment?” American Economic Review 91, no. 4 (2001): 877-908.
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• Kolstad, chapter 20.
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• Income effects and environmental Kuznets curves
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• Grossman, Gene, and Alan Krueger. “Economic Growth and the Environment.” Quarterly Journal of Economics 110, no. 2 (1995): 353-377.
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• Levinson, Arik. “The Ups and Downs of the Environmental Kuznets Curve.” Mimeograph, Georgetown University, 2000.
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• “Dirt Poor.” Economist , March 21, 1998, pp. S3S5.
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• Productivity growth/Porter hypothesis
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• Jorgenson, Dale W., and Peter J. Wilcoxen. “Environmental Regulation and U.S. Economic Growth.” Rand Journal of Economics 21 (1990): 314-40.
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• Gardiner, David, and Paul R. Portney. “Does Environmental Policy Conflict with Economic Growth.” In RFF .
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• Stavins, Robert, Judson Jaffe, and Todd Schatzki. “ Too Good to be True? An Examination of Three Economic Assessments of California Climate Change Policy .” NBER Working Paper No. 13587, November 2007. ↗
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• Buy at MIT Press Jaffe, Adam B., Richard G. Newell, and Robert N. Stavins. “Technology Policy for Energy and the Environment.” In Innovation Policy and the Economy. Vol. 4. Edited by Adam B. Jaffe, Josh Lerner, and Scott Stern. MIT Press, 2004. ISBN: 9780262600606. ↗
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• Porter, Michael E., and Class Van der Linde. “Toward a New Conception of the Environment-Competitiveness Relationship.” Journal of Economic Perspectives 9, no. 4 (Fall 1995): 97-118.
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• Palmer, Karen, Wallace E. Oates, and Paul R. Portney. “Tightening Environmental Standards: The Benefit-Cost or the No-Cost Paradigm?” Journal of Economic Perspectives 9, no. 4 (1995): 119-32.
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• Green national accounting
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• “An Invaluable Environment.” Economist , April 18, 1998, pp. 75.
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• Hecht, Joy. “Environmental Accounting: Where We Are Now, Where We Are Heading.” Resources 135 (1999): 14-17.
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• Corruption, monitoring, and enforcement
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• Kolstad, chapter 16.
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• Oliva, Paulina. Environmental Regulations and Corruption: Automobile Emissions in Mexico City. Working Paper. University of California Santa Barbara, 2010.
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• Olken, Ben. “Monitoring Corruption: Evidence from a Field Experiment in Indonesia.” Journal of Political Economy 115, no. 2 (2007): 200-249.
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• Air and water pollution in developing countries
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• Ahuja, Amrita, Michael Kremer, and Alix Peterson Zwane. “Providing Safe Water: Evidence from Randomized Evaluations.” Working Paper. Harvard University, April 2010.
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• Kremer, Michael, Jessica Leino, Edward Miguel, and Alix Peterson Zwane. “Spring Cleaning: Rural Water Impacts, Valuation, and Property Rights Institutions.” Working Paper. Harvard University, 2010.
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• Davis, Lucas. “The Effects of Driving Restrictions on Air Quality in Mexico City.” Journal of Political Economy 116, no. 1 (2008): 38-81.
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• Kolstad, chapter 7.
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• Braden, John B., Charles D. Kolstad, and David Miltz. 1998. “Introduction.” Chapter 1 in Measuring the Demand for Environmental Quality . Edited by John B. Braden and Charles D. Kolstad. Emerald Group Publishing Limited, 1998. ISBN: 9780444888778.
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• Smith, V. Kerry. “Nonmarket Valuation of Environmental Resources: An Interpretive Appraisal.” Land Economics 69, no. 1 (1993): 1-26.
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• “Are You Being Served?” Economist , April 23, 2005, p. 76.
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• “Treasuring the Environment.” Economist , March 3, 1990, p. 71.
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• “A Price on the Priceless?” Economist , August 17, 1991, p. 61.
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• Hedonic price indices
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• Kolstad, chapter 8.
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• Ashenfelter, Orley, and Michael Greenstone. “ Using Mandated Speed Limits to Measure the Value of a Statistical Life: Evidence from the Introduction of the 65-mph Speed Limit on Rural Interstates .” NBER Working Paper No. 9094, August 2002. ↗
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• Chay, Kenneth, and Michael Greenstone. “Does Air Quality Matter? Evidence from the Housing Market.” Mimeograph, University of Chicago, 2004.
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• Freeman III., A Myrick. “Property Value Models.” Chapter 11 in The Measurement of Environmental and Resource Values . RFF Press, 1993. ISBN: 9780915707690.
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• Greenstone, Michael, and Justin Gallagher. “Does Hazardous Waste Matter? Evidence from the Housing Market and the Superfund Program.” Quarterly Journal of Economics 123, no. 3 (2008): 951-1003.
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• van Houtven, George L., and Maureen Cropper. “When is a Life Too Costly to Save? The Evidence from Environmental Regulations.” In RFF .
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• Viscusi, W. Kip. “The Value of Risks to Life and Health.” Journal of Economic Literature 31 (1993): 1912-1946.
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• Household production
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• Kolstad, chapter 9.
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• Dickie, Mark, and Shelby Gerking. “Willingness to Pay for Ozone Control: Inferences from the Demand for Medical Care.” Journal of Environmental Economics and Management 21, no. 1 (1991): 1-16.
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• Johanneson, Magnus, Per-Olov Johansson, Bengt Kristom, and Tore Soderqvist. “Valuing Changes in Health: Theoretical and Empirical Issues.” In Current Issues in Environmental Economics . Edited by Per-Olov Johansson, Bengt Kristom, and Karl-Goran Maler. Manchester University Press, 1995. ISBN: 9780719038457.
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• Smith, V. Kerry. “Household Production Functions and Environmental Benefit Estimation.” Chapter 3 in Measuring the Demand for Environmental Quality . Edited by John B. Braden and Charles D. Kolstad. Emerald Group Publishing Limited, 1998. ISBN: 9780444888778.
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• Contingent valuation
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• Kolstad, chapter 10.
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• Portney, Paul R. “The Contingent Valuation Debate: Why Economists Should Care.” Journal of Economic Perspectives 8, no. 4 (1994): 3-17.
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• Hanemann, Michael W. “Valuing the Environment Through Contingent Valuation.” Journal of Economic Perspectives 8, no. 4 (1994): 19-43.
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• Diamond, Peter A., and Jerry A. Hausman. “Contingent Valuation: Is Some Number Better than No Number?” Journal of Economic Perspectives 8, no. 4 (1994): 45-64.
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• “The Price of Imagining Arden.” Economist , December 3, 1994, p. 80.
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• Sweeney, James. “Economic Theory of Depletable Resources: An Introduction.” Chapter 17 in Handbook of Natural Resource and Energy Economics. Vol. III. Edited by Allen V. Kneese and James L. Sweeney. Elsevier Science Publishers, 1993. ISBN: 9780444878007.
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• Heal, Geoffrey. “The Optimal Use of Exhaustible Resources.” Chapter 18 in Handbook of Natural Resource and Energy Economics. Vol. III. Edited by Allen V. Kneese and James L. Sweeney. Elsevier Science Publishers, 1993. ISBN: 9780444878007.
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• Munro, Gordon, and Anthony Scott. “The Economics of Fisheries Management.” Chapter 14 in Handbook of Natural Resource and Energy Economics. Vol. III. Edited by Allen V. Kneese and James L. Sweeney. Elsevier Science Publishers, 1993. ISBN: 9780444878007.
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• Slade, Margaret E., and Henry Thille. “Whither Hotelling: Tests of the Theory of Exhaustible Resources.” Working Paper. University of British Columbia, 2009.
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• Arrow, Kenneth, et al. “Brief Amici Curiae” to the U.S. Supreme Court. AEI-Brookings Joint Center for Regulatory Studies, Washington DC, July 2000.
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• Chay, Kenneth, Carlos Dobkin, and Michael Greenstone. “The Clean Air Act of 1970 and Adult Mortality.” Journal of Risk and Uncertainty 27, no. 3 (2003): 279-300.
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• Chay, Kenneth, and Michael Greenstone. “The Impact of Air Pollution on Infant Mortality: Evidence from Geographic Variation in Pollution Shocks Induced by a Recession.” Quarterly Journal of Economics 118, no. 3 (2003): 1121-1167.
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• ———. “ Air Quality, Infant Mortality, and the Clean Air Act of 1970 .” NBER Working Paper No. 10053, October 2003. ↗
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• Dockery, Douglas W., et al. “An Association Between Air Pollution and Mortality in Six U.S. Cities.” The New England Journal of Medicine 329, no. 24 (1993): 1753-1759.
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• Lippmann, Morton, Kazuhiko Ito, Arthur Nádas, and Richard T Burnett. “Association of Particulate Matter Components with Daily Mortality and Morbidity in Urban Populations.” Health Effects Institute, Report No. 95, 2000. (Read pp. 1-38 only.)
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• Reinhardt, Forest, Gunnar Trumbull, Mikell Hyman, Patia McGrath, and Nazli Zeynep Uludere. “The Political Economy of Carbon Trading.” Harvard Business School Case. Harvard Business School Publishing. Case: 9-710056, April 27, 2011.
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• Costs of global warming
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• Mendelsohn, Robert, William D. Nordhaus, and Daigee Shaw. “The Impact of Global Warming on Agriculture: A Ricardian Approach.” American Economic Review 84 (1994): 753-771.
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• Deschenes, Olivier, and Michael Greenstone. “The Economic Impacts of Climate Change: Evidence from Agricultural Output and Random Fluctuations in Weather.” American Economic Review 97, no. 1 (2007): 354-385.
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• ———. “Climate Change, Mortality, and Adaptation: Evidence from Annual Fluctuations in Weather.” Working Paper. MIT, 2007.
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• Guiteras, Raymond. “The Impact of Climate Change on Indian Agriculture.” Working Paper. University of Maryland, 2009.
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• The Stern Review
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• Stern, Nicholas. “The Economics of Climate Change.” American Economic Review 98, no. 2 (2008): 1-37.
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• Nordhaus, William D. “A Review of the Stern Review on the Economics of Climate Change.” Journal of Economic Literature 45, no. 3 (2007): 686-702.
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• Weitzman, Martin M. “A Review of the Stern Review on the Economics of Climate Change.” Journal of Economic Literature 45, no. 3 (2007): 703-724.
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• Climate change policy
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• Metcalf, Gilbert. “Market-Based Policy Options to Control U.S. Greenhouse Gas Emissions.” Journal of Economic Perspectives 23, no. 2 (2009): 5-27.
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• Tol, Richard S. J. “The Economic Effects of Climate Change.” Journal of Economic Perspectives 23, no. 2 (2009): 29-51.
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• Barrett, Scott. “The Coming Global Climate-Technology-Revolution.” Journal of Economic Perspectives 23, no. 2 (2009): 53-75.
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• Carbon offsets and the clean development mechanism
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• Reinhardt, Forest, Jost Hamschmidt, and Mikell Hyman. “South Pole Carbon Asset Management-Going for Gold?” Harvard Business School Case. Harvard Business School Publishing. Case: 9-709030, March 31, 2009.
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• Cuddy, Amy. “OPOWER: Increasing Energy Efficiency through Normative Influence.” Harvard Business School Case. Harvard Business School Publishing. Case: 9-911016, May 22, 2011.
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• Allcott, Hunt, and Michael Greenstone. “The Economics of the Energy Efficiency Gap.” Working Paper. MIT, 2011.
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• Gillingham, Kenneth, Richard G. Newell, and Karen Palmer. “Energy Efficiency Economics and Policy.” Discussion Paper No. 09-13. Resources for the Future, 2009.
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• Allcott, Hunt, and Nathan Wozny. “Gasoline Prices, Fuel Economy, and the Energy Paradox.” Working Paper. MIT, 2010.
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• Allcott, Hunt. “Social Norms and Energy Conservation.” Working Paper. MIT, 2011.
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• Holdren, John P. “The Energy Innovation Imperative: Addressing Oil Dependence, Climate Change, and Other 21st Century Energy Challenges.” Innovations (2006): 3-23.
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• Wald, Matthew L. “The Carbon Calculus.” The New York Times , November 7, 2007, pp. H1, and H11.
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• The course textbook is:
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• Kolstad, Charles. Environmental Economics . 2nd ed. Oxford University Press, 2010. ISBN: 9780199732647.
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• The chapters from the Kolstad textbook are required. The rest of the syllabus is intended to serve as a guide to the literature and it is not expected that you will read every article. Some articles in particular will be required, and I will let you know about this in advance. Since class participation matters, you may want to read the textbook chapters in advance of class.
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• Tietenberg, Tom. Environmental and Natural Resource Economics . 5th ed. Addison-Wesley, 2000. ISBN: 9780321031280.
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• Chapman, Duane. Environmental Economics: Theory, Application, and Policy . Addison-Wesley, 1999. ISBN: 9780321014351.
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• Portney, Paul, and Robert Stavins. Public Policies for Environmental Protection . 2nd ed. RFF Press, 2000. ISBN: 9781891853036.
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