ENVR 530 Course Outline

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Course Outline

Course Title

Faculty:

Faculty of Social and Applied Sciences

School:

School of Environment and Sustainability

Program:

Master of Arts/Master of Science in Environment and Management

Course Title:

Economics for Decision Making

Course Number:

ENVR 530

Credits:

3 credits: Each course credit represents about 33 hours of effort by a student.

Calendar Description

Introduces theories, concepts and facts about competing economic paradigms, and develops skills needed to integrate economic and environmental decisions. Examines selected economic instruments from member countries of the Organization for Economic Cooperation and Development (OECD), and reviews leading practices in the application of these instruments, considering their effectiveness, efficiency, and public acceptability.

Course Information

Instructors

Dr. Charles Krusekopf [email protected] (250) 391-2600 ext 4421

Course Administrative Contacts

Dr. Chris Ling, MEM Program Head [email protected] (250) 391.2600 ext 4171

Chelsea Smith MEM Program Associate [email protected] 250.391.2600 ext 4785

Start and End Dates:

1 / 10 09/02/2013 to 12/13/2013

Duration:

15 weeks

Delivery Method:

Blended

Standard Course Hours:

33 hours per credit

Credits:

Co-Requisites:

ENVR 505 and ENVR 506

Course Overview

This course introduces the field of Environmental Economics and the role of economics in environmental decision-making and planning. You will examine: concepts of wealth, value and decision-making from an economic perspective; the concept of environmental goods and services (EGS); methods used to place economic values on environmental resources; benefit-cost analysis as a framework to support decision-making; and, the pros and cons of various policy options for controlling environmental pollution. You will consider the roles of markets, and situations in which markets may fail to operate in socially efficient manners, such as when externalities affect operations or when transaction costs are high. In the course, we will discuss the economic theory underlying important topics, and will apply the theory to “real life” situations.

The course is designed to give you an understanding of “the economic way of thinking” and how that thinking might be applied to topics such as environmental goods and services, behaviour, and the development of effective policies to protect the environment. It is intended to give you the confidence and ability to explain to others why considering the environment in decision making is not just scientifically or morally important, but also economically important for individuals, corporations or governments. The course does not require you to have a deep background in economics as it will introduce basic economic concepts, while focusing the application of economic concepts on environmental issues.

The course will cover:

Wealth, and how individuals and society attempt to maximize wealth through economic actions. Economic concepts as they relate to the environment, including the “efficient” level of pollution and situations of market failure. Valuation techniques for ecosystem goods and services and the inherent limitations and flaws associated with the measurement of both market and non-market values. The pros and cons of the major policy options for controlling environmental pollution, including centralized approaches such as pollution and technology standards; market-oriented approaches such as emissions taxes and tradable emissions permits; and decentralized approaches, such as moral suasion, property rights, collective action, and liability laws.

2 / 10 Readings and Resources

Required Textbooks and Readings:

Field, B. & Olewiler, N. (2011) Environmental Economics: Third Edition. McGraw Hill/Ryerson Publishers.

Chen, W., Jim, C. (2008). Assessment and Valuation of the Ecosystem Services Provided by Urban Forests. In Carreiro, M.M., Song, Y.C. & Wu, J. (Eds.). Ecology, planning and management of urban forests: International perspectives, (p. 53-83). Springerlink.

Brown, G. & Mooney, P. (2013). Bringing ecosystem services into environmental management, especially at the landscape scale. A paper submitted to the 2013 conference of the International Association for Impact Assessment, Calgary, Alberta, May 2013.

Ecosystem Valuation.

Ecosystem Marketplace

Readings and Resources Units 1 & 2

Field, B. & Olewiler, N. (2011) Environmental economics: Third Edition. McGraw Hill/Ryerson Publishers. Preface, Chapter 1, Chapter 2, Chapter 3, Chapter 4 and Chapter 5

Unit I and II Notes: available on the course website

Unit I and II Voice-Over Power Point Slide Presentations: available on the course website

Unit 1 - Background Reading

Doom or Boom: Contrasting Views on the State of the World

Wikipedia, despite some issues, has an extensive, useful discussion on the Simon-Ehrlich Bet, and bios of both Simon and Ehrlich that discuss their view, work and the bet: http://en.wikipedia.org/wiki/Ehrlich-Simon_bet

Here is a list of some additional links:

Websites that Explain The Bet:

Ehrlich’s Explanation and his Second Bet challenge http://www.stanford.edu/group/CCB/Pubs/Ecofablesdocs/thebet.htm

Julian Simon’s Losing Bet on the Price of Timber https://fp.auburn.edu/sfws/sfnmc/web/bet.html

Websites that promote Julian Simon and others with similar views such as Bjorn Lomborg:

Hooray for Julian Simon: http://www.cato.org/pubs/policy_report/cpr-20n2-1.html

The Doomslayer Article from Wired Magazine http://www.wired.com/wired/archive/5.02/ffsimon_pr.html

3 / 10 The Skeptical Environmentalist, Bjorn Lomborg http://www.lomborg.com/

Websites that promote Paul Ehrlich and others with similar views, such as Lester Brown and the World Watch Institute:

Paul Ehrlich's homepage at Stanford: http://www.stanford.edu/group/CCB/Staff/Ehrlich.html

Lester Brown and the Earth Policy Institute http://www.earth-policy.org/about_epi/C32

Worldwatch Institute http://www.worldwatch.org/

Readings and Resources Unit 3

Field, B. & Olewiler, N. (2011) Environmental economics: Third edition. McGraw Hill/Ryerson Publishers. Chapter 6, Chapter 7 and Chapter 8

Unit III Notes: available on the course website

Unit III Voice Over Power Point Slide Presentations: available on the course website

Ecosystem Valuation.

Ecosystem Marketplace

Readings and Resources Unit 4

Field, B. & Olewiler, N. (2011) Environmental Economics: Third Edition. McGraw Hill/Ryerson Publishers. Chapter 9, Chapter 10, Chapter 11, Chapter 12, Chapter 13.

Unit IV Notes: available on the course website

Unit IV Voice-Over Power Point Slide Presentations: available on the course website

Ecosystem Marketplace

Learning Outcomes

Learning Outcome Criteria 1. Communication

4 / 10 Learning Outcome Criteria 1.1 Produced effective written material. Material is organized coherently, concisely and completely. Text is legible, accurate (spelling is correct) and conforms to the style and grammatical conventions that match the purpose of the writing. A structure is used that makes it easy for the reading audience to identify main points and to follow the sequence of ideas. Documents are proof-read and re-drafted to ensure accuracy. Where material is copied from published and unpublished sources, this is noted and attribution provided, including copyright approval where appropriate. 1.2 Makes effective presentations and communicates Contributions are clear and relevant. using appropriate media and techniques. The expected style, language and form of communication is suitable for the context. Images are used appropriately. Response to communication from others is appropriate and creates opportunities for others to contribute. 2. Knowledge 2.2 Interprets and applies key concepts in economics and Discusses the application of free market, environment that influence sustainable development. economic growth, and private property rights principles (as they apply to classical, neoclassical and ecological economics theories) to current thinking on ecological sustainability. Discusses and critiques the economics of environmental issues (e.g., the role of markets, economic growth, investment, trade, property rights, scientific uncertainty, technology, employment, competitiveness, government fiscal and monetary policies, and their ecological effects). Proposes macro- and micro-economic strategies for ecologically sustainable economic development (e.g., new measures of economic performance/progress, ecological tax reform, and ecological-economic design). Identifies and discusses the shortcomings of conventional economic indicators such as the Gross Domestic Product (GDP) or the Gross National Product (GNP) in relation to other approaches such as the Genuine Progress Index, and the Global Reporting Index (GRI). 2.3 Interprets and applies key economic instruments and Applies and evaluates selected economic and techniques for pollution prevention and sustainable financial management instruments (e.g., carbon resource use. taxes, total cost assessment, and transportation cost analysis). Proposes solutions to environmental and business problems involving economic techniques in decision making. Identifies costs (internal or external; fixed or variable; market or non-market)

5 / 10 Learning Outcome Criteria Analyzes and reports on environmental performance indicators and corporate environmental performance. Applies and explains economic principles such as scarcity, preferences, efficiency, marginal analysis, opportunity costs and prices, prices and values, discounting, micro- and macro-economics in specific cases.

Assessment Matrix

Note: Students must pass Learning Outcome 2.2 and 2.3 in order to pass this course. Students are required to pass all other Learning Outcomes over the course of the program in order to qualify for graduation. Failing any Learning Outcome will require a meeting with the Chair.

Type Date Due Learning Outcomes Total weightings (%) 1.1 1.2 2.2 2.3 Assignment 1: Friday 5% - 25% - 30% Review September 20, Questions on 2013 Units 1, 2, and 3 (Individual) Assignment 2: Friday Oct. 11, 5% - - 10% 15% Case-study 2013 assignment on EGS and decision-making (Team) Assignment 3: Presentations - 10% - 10% 20% Presentation Thursday Oct. and Paper on 17, Paper due an Oct 21, 2013 Environmental Mgmt Plan (Team) – economic analysis (integrated assignment with ENVR 505) Assignment 4: Sunday Dec. 5% - 15% 15% 35% Post-Residency 15, 2013 Assignment on Environmental Policy (Individual) Totals 15% 10% 40% 35% 100%

Assignment and Evaluation Descriptions

Assignments are due in the appropriate drop box by midnight on the date specified, unless otherwise noted.

Assignment 1 (Individual): Unit 1, 2 and 3 Review Questions - 30% (Effective Writing 5%,

6 / 10 Content 25%)

Assignment 1 includes a series of short essay questions of up to 250 words each that cover key points and topics from Units 1, 2 and 3 in the course outline (Unit Notes 1, 2 and 3, Textbook Chapters 1-7). Each question requires that you read the relevant textbook chapter and Unit Notes and then demonstrate your understanding and your ability to apply the concept to a relevant contemporary situation. (eg. Explain a term or concept, and provide an example from your personal experience that highlights the concept.) You will also be asked to analyze scenarios using economic theories and concepts.

You must complete this assignment during the pre-residency period to insure that you have a sufficient background understanding of key concepts and terminology before you engage in on-campus activities such as case studies. (Additional practice questions are available in the Unit Notes and in the textbook discussion questions. Answers to these are provided in the textbook Instructor’s Manual.)

Assignment 2 (Team): Case Study assignment on EGS and decision-making - 15% (Effective Writing 5%, Content 10%)

With your team, you will review a case study that highlights different development proposals for a property and how those proposals will impact the ecology, the economy and society. As a team, prepare a 2500-word briefing paper in which you identify significant Ecological Goods and Services (EGS) associated with the property, discuss how EGS might be incorporated into decision-making around the development proposals, and offer a critique of the proposal based on environmental, social and economic factors.

Assignment 3 (Team): Presentation and Paper on an Environmental Management Plan – 20% (Effective Presentation 10%, Paper Content 10%)

For this joint assignment with ENVR 505, your team will prepare a 2500-word paper and make a presentation to the class in which you critique a chosen environmental management plan. For this course, your paper and presentation will focus on an economic analysis of the EGS and how these are or might be incorporated into the management plan and related policies and actions.

Assignment 4 (Individual): Post-Residency Assignment on Environmental Policy - 35% (Effective Writing 5%, Content 30%)

Prepare a 2500-word policy proposal to address a significant environmental issue such as global warming. Critique the application of different environmental policy types (such as decentralized approaches, standards, environmental taxes and transferrable discharge permits) that might be used to address the environmental issue, and develop a recommendation for a preferred policy approach.

Unit Descriptions

Please click on the specific Units for information

Unit Descriptions Units 1 and 2

Introduction and Economic Way of Thinking (Pre-Residency)

This portion of the course will introduce the basic concepts and terms through readings, discussions and exercises using the online Moodle course platform. Activities in these Pre-Residency units include:

7 / 10 Read textbook chapters 1-5 and the Unit Notes for Units 1 and 2 (available on the course website) Complete Assignment 1. Watch/listen to the lecture presentations available on the course website for explanations and examples of key terms and concepts. Engage in online discussions, through both the class-discussion forum and live discussions and interactions with the instructor and other class members via online sessions (These will provide an overview of the course and answer many questions about the material and assignment 1).

This introduction will prepare you to actively discuss and apply the key concepts during the residency and post-residency portions of the class.

The following concepts will be introduced in the pre-residency Units:

The history of economics and the field of environmental economics Economics, values and wealth Scarcity, wealth maximization and opportunity cost Gross domestic product, the standard of living and gross national happiness Why some people/countries are poor and others are rich Economic and environmental sustainability Review of economic terms and concepts (demand and willingness to pay, supply and marginal cost, market equilibrium, consumer and producer surplus, marginal analysis, the equimarginal principle, efficiency) Market operation and market failure Market equilibrium Positive and negative externalities Open access resources Public goods Marginal Abatement Costs (MAC) Marginal Damages (MD) The Efficient Level of Pollution The Equimarginal Principle (cost minimization) in pollution reduction

Unit 1 and 2 Readings & Resources

Unit Descriptions Unit 3

Environmental Analysis - Benefit-Cost Analysis and Valuation of Ecosystem Goods and Services (EGS) (Residency)

For this unit you will utilize the economic concepts introduced in Units 1 and 2 and apply them to decision making through applications such as benefit-cost analysis. This Unit will be covered in the pre-residency and residency portions of the course. During the residency you will experience a mix of class lectures and discussions, in-class exercises and scenarios, and you will participate in a field trip and complete two team assignments. Course sessions will focus on defining and valuing Ecosystem Goods and Services (EGS) and understanding how EGS might be incorporated into decision making. You will work individually and in teams to define, identify and incorporate EGS into applied decision making.

The material covered in this course complements the discussion of EGS delivered in ENVR 505, Ecosystem Science and Management. (This course will focus on the valuation and social aspects of EGS, while ENVR 505 will focus on the environmental measures and impacts of EGS.)You will complete Assignments 2 and 3, which integrate both ecological and economic aspects of EGS (although the focus of the assignments for this course will be on economic valuation and decision making).

Topics Covered:

8 / 10 Economic Valuation Concepts and Approaches for EGS Overview of Benefit-Cost Analysis

Unit 3 Readings and Resources

Unit Descriptions Unit 4

Environmental Policy Process, Tools and Analysis (Post-Residency)

In this unit you will apply your knowledge of economic concepts to the development of better environmental policy approaches. You will read several textbook chapters and the Unit 4 Notes, and will explore web resources that highlight the function of environmental markets including markets for water, carbon and biodiversity. Lecture presentations in class and posted online offer explanations and examples of a framework for environmental policy analysis and apply that framework to several policy approaches. Textbook readings detail the framework for analyzing policies and closely examine several approaches to environmental policy including centralized and decentralized approaches, and economic approaches such as environmental taxes and markets.

You will interact with the instructor and fellow students through an online class-discussion forum and through live discussions and interactions via online sessions. The online sessions offer opportunities to ask questions and review your understanding of policy approaches, and to ask questions related to Assignment 4 (in which you will apply environmental policies to a significant environmental issue such as global warming).

Topics Covered:

Criteria for environmental policies Decentralized policies - liability laws, property rights, moral suasion, the Coase theorem, collective action, information disclosure, corporate social responsibility and other voluntary measures Regulatory approaches – technology standards, pollution standards Market-based instruments and fiscal mechanisms - incentive-based strategies – pollution taxes, green taxes and the double-dividend hypothesis, transferable discharge permits, emission trading programs An overview of existing and proposed carbon regulation and voluntary and compliance carbon markets, including an examination of carbon offsets, provincial, regional, national and international carbon markets and how carbon policies are likely to impact businesses and consumers.

Unit 4 Readings and Resources

Policies and Guidelines

You are responsible for knowing university and program policies and guidelines that govern your work in this course:

RRU Academic Regulations including course withdrawals, academic probation, and formal grade appeals RRU Grading Policy RRU Student Rights & Responsibilities RRU Copyright Guidelines

Please note: Course discussions can be viewed by your cohort classmates, instructors and teaching assistants, RRU program administrative staff, management, librarians and IT staff. RRU staff have signed confidentiality agreements before being allowed access to your discussions. In accordance with BC privacy legislation,you will be notified if anyone else is requesting permission to view your discussions .

Please note: If your course uses applications outside the Royal Roads University online course platform (e.g.,

9 / 10 wikis, blogs,etc), please be aware that data from these applications may be stored on a computer server based in the United States and therefore may be subject by law enforcement officials under the U.S. Patriot Act.

Current Royal Roads University academic regulations will be applied as they exist at the start of this course.

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