The Political Economy of Energy From Concept to Realization

ECO 328 Fall 2016. MW 10:20-11:10 Instructor: Dr. Dean Smith Office: 304 FCB, 523-7396 [email protected] Office Hours: MW 8-9, T 9:30-10:30 and by appointment. Three (3) Credit hours.

Thought to start the semester: Climate change is difficult for people to evaluate dispassionately because it entails deep political and industrial implications, and because it arises from the core processes of our civilization’s success. This means that, as we seek to address this problem, winners and losers will be created. The stakes are high, and this has led to a proliferation of misleading stories as special interest groups argue their case. (Flannery, 2005, page 4.)

Course Description: The issues, theory and public policy of energy economics; the cultural, social and ethical issues of energy economics; history of various forms of human energy conversion and the potential future forms of energy conversion. Energy is closely linked to economic prosperity, quality of living, air and environmental quality, human health, and water consumption especially in the arid regions. Because of this deep and intertwined relationship between energy, humans, and the environment, emphasis will focus on prospects for a sustainable energy future in both in urban areas and emerging societies, including indigenous communities.

Course Objectives: 1. Explain the energy issues resulting from human energy conversion. (Global, sustainability and diversity) 2. Explain issues influencing the human experience and to appreciate the normative aspects of the issues relating to energy conversion. 3. Explain a cognizance of the costs and benefits of various types of energy conversion. (Global, sustainability and diversity) 4. Demonstrate an understanding of the economic and social consequences stemming from climate change. (Global, sustainability and diversity) 5. Demonstrate an understanding of the alternative futures of energy markets and policies. (Global, sustainability and diversity) Students expecting definitive solutions to the various energy challenges facing the US and global economies will be sadly disappointed: these solutions are moving targets and require economically creative participants in markets and policy. This course is designed to introduce the students to ways of knowing, doing and organizing aimed at solving these complex social and economic challenges. This course is focused on the economics and policy of energy conversion. This is not a course focused on the chemistry, biology, ecology or any other investigation of topics such as climate change or pollution; rather, the main question concerns the costs and benefits of various forms of energy conversion. Of course, all good economists must be fluent in a reading and understanding of these other disciplines of study.

Course Structure: The successful student is expected to gain a working knowledge of the vocabulary, issues and analytical tools necessary to discuss the impact of economic activity, energy outcomes and influences, and public policy. An understanding of these mechanics is essential to an understanding of the various aspects of energy conversion. The successful student must also show an understanding of the rationales, consequences and points of disagreement over the various policy measures studied. The lecture periods will be used to develop, analyze and openly discuss the theories and policies presented in the assigned readings. The class discussion will clarify and extend the material presented in the readings; as such preparation and attendance are essential. Given the normative nature of the material, it is expected that lively class discussions will take place.

Textbooks and Required Materials:

Energy Reading packet Available in FCB Support Services room 229 Access to the internet is required. ECO 328 Website

Course Content: (to be updated) 1. Social Decisions: Dogs and Thinking Energetically as primary Text a. The basic physics and economics of energy conversion 2. Energy Use and the Consequences Poop as primary text a. The basic chemistry, physics and biology of energy conversion: 3. Energy Systems and Social Evolution Sieferle as primary text 4. The Basic Economics of Energy a. Externalities b. Coase and what he really wrote 5. Renewable Energy, Allen, Atwater and Smith 6. Discovering Life Alternatives: Heroin Anyone? 7. Food and energy: Omnivore’s Dilemma, Arizona Food and Energy Project a. Food and energy presentations 8. Cap and Trade Economics 9. The History of Energy: Europe’s Special Course, World Energy Outlook as primary texts a. Europe as a case study from uncontrolled solar to controlled solar to fossil fuels b. How did we get into this mess: the big OOPS? c. What is the future of fossil fuels? d. Team I 10. The Global Social Costs of Energy: IPCC, Stern, a. Adaptation b. Team II 11. A New Energy Regime: IPCC, Stern, a. Mitigation b. Team III 12. Village Based Production: Energize Baby a. Reinventing the system 13. If Not Now, When? a. Class discussion 14. If Not Us, Who? a. Class discussion

Examinations: There will be one take-home mid-term exam and a take-home final exam. Each exam will be in written format. The questions will include analytical models and policy analysis.

The Energy/Water Nexus

There is a huge connection between our use of water resources and our use of energy resources. We simultaneously use water to produce electricity, natural gas and oil, and use a huge amount of electricity - much produced using natural gas and water - to move water. Of course, this brings up the idea of Zeno's Paradox: we use energy to move water to produce energy to move the water to produce energy to move the water...

Each student will write a short paper concerning explaining the nexus between energy and water. The paper will focus on the nexus in the US.

 How are water resources used to produce "useful" energy resources?  How are energy resources used to produce "useful" water resources?  What amount or percentage of each is used for the other?  Are there alternative strategies to improve the efficiency of resource use?

If any of the above bullets are not included in the paper, the grade will be reduced. All necessary statistics and other references must be documented. A portion of the grade is determined by organization and presentation (grammar and spelling). Any graphs can be hand-drawn. See the Sandia Labs website: http://www.sandia.gov/energy-water/

( Stolen from Jim Loy's Zeno's Paradox page: Little-known story: Achilles didn't win the above race. So, he challenged the tortoise to a pole vault competition, double or nothing. The tortoise's pole bent impressively, before it catapulted him out of Greece, never to be seen again. I made that one up.)

Frick, Frack, Fudge

"Just a decade ago, only the smallest sliver of the U.S. population had even heard of hydraulic fracturing, or fracking. Today, it’s one of the most incendiary environmental topics going. In recent years, wells built for this form of natural gas extraction have spread by the thousands through various parts of the country, an expansion many argue outpaces the science done to understand its potential impacts. Whether fracking can continue spreading without major harm to the environment or public health, and whether it promises to reduce greenhouse gas emissions, are questions researchers are still working to answer." Mark Schrope, Yale University.

Each student will write a short paper addressing the very controversial economics of hydraulic fracturing for natural gas. The so-called benefits, increased production, are fairly straightforward, but the so-called secondary impacts are far less certain.

 Historical natural gas output  Historical natural gas prices (real terms)  Descriptions of the scientific evidence of harm from fracking  Brief descriptions of federal, state and local regulations on fracking (for and against)

If any of the above bullets are not included in the paper, the grade will be reduced. All necessary statistics and other references must be documented. A portion of the grade is determined by organization and presentation (grammar and spelling). Any graphs can be hand-drawn.

Term Paper https://www.ipcc.ch/report/ar5/ Each student will write a 6-10 page report detailing a specific aspect the possible futures as related to energy. The class will self-select into three "teams."

The Intergovernmental Panel on Climate Change (IPCC) periodically completes reports stating the science of climate change without making any recommendations to nations. Working Group II focuses on adaptation and WGIII looks at mitigation since both types of efforts must be made to address the future impacts from and on the environment. Students will self select to work on projects related to WGII or WG III. Details forthcoming.

Team 1: Adaptation: What to do since climate change is happening. “Changing existing policies and practices and adopting new policies and practices in the face of climate change and its associated impacts.” (UNDP unpublished, 2006).

"Climate Change 2014: Impacts, Adaptation, and Vulnerabilityis the second volume of the Fifth Assessment Report (AR5) of the Intergovernmental Panel on Climate Change (IPCC) — Climate Change 2013/2014— and was prepared by its Working Group II. The volume focuses on why climate change matters and is organized into two parts, devoted respectively to human and natural systems and regional aspects, incorporating results from the reports of Working Groups I and III."

Team 2: Mitigation: What to do to stop it

“The ultimate objective of the Convention is the stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. Accordingly, under Article 4.1(b) of the Convention, all Parties are required to undertake efforts to mitigate climate change.” Mitigation will be necessary to reduce the amount of green house gases being added to the cumulative total. This will require the development of new markets and products in addition to policy changes.

Grading System: Exam 1 20% Nexus 20% Fracking 20% Term paper 20% Final Exam 20%

Mechanisms for Feedback: The professor provides written comments and evaluations on all assignments for this course. Students also have the opportunity to interact with the professor during office hours and through the campus e-mail system. Re-tests and Makeup Policy: N/A: take home exams

Expected Schedule of Events The Excel spreadsheet indicates the discussion days for each of the readings.

Attendance: You are expected to attend all classes. You are responsible for all material presented in the classroom and assigned readings. You are also responsible for all schedule changes and other announcements made in class: if an exam date is changed, and you miss the exam, then you cannot use the excuse that the original date was changed! Due to the technical nature of this course, it is highly unlikely that infrequent attendance will result in a passing grade. This is a junior level course and you are expected to treat it as such with a level of academic maturity. It is expected that you will have read the assigned material prior to class. The student is fully responsible for all the material discussed in class and the assigned reading. Only official university approved absences must allow you to miss an exam. Note: simply visiting the health center is not an excuse. You MUST inform me of your expected absence BEFORE you miss an exam. Make up exams may be given after consultation between the student and the instructor. In this class, and every other class, you should expect to spend a minimum of 2 hours outside of class for every class hour. In our case, this means 3 hours of study for every class period. You should visit the LAC if you are having trouble keeping up. The LAC offers a variety of programs on study skills. Feel free to stop by my office at any time if you need help or guidance.

Statement on Cheating: Any student caught cheating on an exam or plagiarizing on an assigned paper will receive a grade of F for the course and will be reported to the appropriate University officials.

Career Exploration Days SHRM will hold its Career Day on Wednesday October 5th. The Business division will hold its Career Day on Friday October 7th. Please encourage your students to register and attend.

References

All papers will include a properly formatted bibliography. Any use of specifically quoted data or specifically quoted language must be cited within the text with parenthetical references such as (Smith, 2010, page 34). In addition to the required readings, you should be using additional materials dependent on your specific topic.

Cline Library has numerous useful websites posted on their Citation & Style Guides page. µ http://library.nau.edu/cf/info/refresources.cfm?subject=Citation%20%26%20Style %20Guides§

Cline Library has numerous useful websites posted on their Writing Resources page. µ http://library.nau.edu/cf/info/refresources.cfm?subject=Writing%20Resources§

Wikipedia is considered a very bad source for material.

Plagiarism: as quoted from University of British Columbia, (2011) "APA Citation Style", µ http://web.ubc.ca/okanagan/library/citations/apa.html§, accessed January, 11,2011. "What kinds of sources do I document?

 direct quotations from a book, article, film, letter, email, lecture, etc.  single words, short phrases, sentences and longer passages quoted from books, articles etc.

 ideas you draw from a source but present entirely in your own words

 paraphrases and summaries of books, journal articles, pamphlets

 single words, short phrases, sentences and longer passages quoted from books or articles used

 statistics"

FCB Business Communication Center

µ http://www.franke.nau.edu/StudentResources/commcenter/§

Get ready to learn some neat stuff.

NAU W.A. Franke College of Business Code of Conduct

Responsibility: I will be on time, prepared, attentive, and professional in my scholastic endeavors. I will take responsibility for my actions and make every effort to learn as much as possible from the educational opportunities presented to me.

Respect: I will meet my commitments to others and treat everyone with respect and civility. I will respect our learning environment and help preserve its physical condition.

Integrity: I will be a reliable and honest contributor to individual and group assignments. I will not seek or help others gain unfair advantage in completing academic requirements. I understand that there are severe consequences for academic dishonesty.

Expectations about Behavior

Responsibility:  Attend all classes and meetings on time  Do not wander in and out of classes  Participate but don’t dominate  Pay attention

Respect:  Turn off cell phones when you are in class  Do not use computers during lectures for non class-related purposes  Make sure language and conversations are appropriate to the classroom setting  Behave in a polite and professional manner

Integrity: Do not engage in any act of academic dishonesty, including but not limited to:  sharing a calculator during a quiz or exam  pre-programming a calculator for use during a quiz or exam unless specifically authorized by the instructor  using notes or books during an exam unless specifically authorized by the instructor  looking at another's exam or allowing another student to look at your exam  exchanging exams, passing notes or text messages  discussing answers during an exam  having another take an exam for you or taking an exam for another  unauthorized possession of or access to examination materials by any means, including electronic transmission, theft, photocopying, electronic or failing to return exams  altering exams or assignments while in student's possession for review in an attempt to obtain a more favorable grade  unauthorized collaboration on assignments  submitting the same paper or substantial portions of a paper for multiple classes  fabrication of information and citations  submitting other's words, ideas, materials or work without properly acknowledging and appropriately referencing them  altering, forging or misusing an academic record  electronic theft of computer programs, data, or text belonging to another

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ACADEMIC INTEGRITY Integrity is expected of every member of the NAU community in all academic undertakings. Integrity entails a firm adherence to a set of values, and the values most essential to an academic community are grounded in honesty with respect to all intellectual efforts of oneself and others. Academic integrity is expected not only in formal coursework situations, but in all University relationships and interactions connected to the educational process, including the use of University resources. An NAU student’s submission of work is an implicit declaration that the work is the student’s own. All outside assistance should be acknowledged, and the student’s academic contribution truthfully reported at all times. In addition, NAU students have a right to expect academic integrity from each of their peers. Individual students and faculty members are responsible for identifying potential violations of the university’s academic integrity policy. Instances of potential violations are adjudicated using the process found in the university Academic Integrity Policy. https://policy.nau.edu/policy/policy.aspx?num=100601

RESEARCH INTEGRITY The Responsible Conduct of Research policy is intended to ensure that NAU personnel including NAU students engaged in research are adequately trained in the basic principles of ethics in research. Additionally, this policy assists NAU in meeting the RCR training and compliance requirements of the National Science Foundation (NSF)-The America COMPETES Act (Creating Opportunities to Meaningfully Promote Excellence in Technology, Education and Science); 42 U.S.C 18620-1, Section 7009, and the National Institutes of Health (NIH) policy on the instruction of the RCR (NOT-OD-10-019; “Update on the Requirement for Instruction in the Responsible Conduct of Research”). For more information on the policy and the training activities required for personnel and students conducting research, at NAU, visit: http://nau.edu/Research/Compliance/Research-Integrity/ SENSITIVE COURSE MATERIALS University education aims to expand student understanding and awareness. Thus, it necessarily involves engagement with a wide range of information, ideas, and creative representations. In the course of college studies, students can expect to encounter—and critically appraise —materials that may differ from and perhaps challenge familiar understandings, ideas, and beliefs. Students are encouraged to discuss these matters with faculty. CLASSROOM DISRUPTION POLICY Membership in the academic community places a special obligation on all participants to preserve an atmosphere conducive to a safe and positive learning environment. Part of that obligation implies the responsibility of each member of the NAU community to maintain an environment in which the behavior of any individual is not disruptive. Instructors have the authority and the responsibility to manage their classes in accordance with University regulations. Instructors have the right and obligation to confront disruptive behavior thereby promoting and enforcing standards of behavior necessary for maintaining an atmosphere conducive to teaching and learning. Instructors are responsible for establishing, communicating, and enforcing reasonable expectations and rules of classroom behavior. These expectations are to be communicated to students in the syllabus and in class discussions and activities at the outset of the course. Each student is responsible for behaving in a manner that supports a positive learning environment and that does not interrupt nor disrupt the delivery of education by instructors or receipt of education by students, within or outside a class. The complete classroom disruption policy is in Appendices of NAU’s Student Handbook. Effective Summer 2014 Approved UCC – 1/28/14 Approved UGC – 2/12/1