Economics and the Environment

Lewis and Clark University
Portland, Oregon

Instructor: Goodstein, Eban
Subject area: Economics
Department: Economics
Course number: 260
Year taught: 1997
Level: Undergraduate

Instructor email:
Please note that the copyright for this syllabus is retained by the instructor.

Course Materials

(G) Goodstein, Eban. Economics and the Environment. (Prentice Hall: 1995)
(H) Hawken, Paul. The Ecology of Commerce. (Harper Collins: 1993)
(R) Reserve readings. Supplemental readings will all be in a notebook outside the economics department office, called EC260 Readings. I STRONGLY recommend that you make a personal copy of the material in this reader


Class Participation/Homework--15%
Final Exam--20%
Research Paper--30%


The course is organized around the four questions in my book:


There will be two types of reading for the class: lecture material and background material. You are responsible for all of the assigned reading material; homework problems in the book and that I provide will help you focus. There will be three midterms and one exam. These will focus primarily on the lecture material. The best way to study for these will be to keep up with the homework assignments, and then review them. If you do not do the homework, you will do poorly in the class. Answers to the homework problems will be on reserve in the library, in the Instructor's Manual for Economics and the Environment.

In addition, we will have occasional quizzes or homework problems that will evaluate your familiarity with the background reading assignments. I will grade these on a scale of 0-4; your class participation grade will be based in part on these assignments. Finally, at the beginning of each class I welcome questions about the background reading, or any issues relating to environmental or natural resource economics happening outside the classroom.


Check your e-mail on a regular basis. I may post assignments or class changes, and students will be posting class summaries and questions to our class list. Each student should sign-up for one day as note-taker. Their job before the next class will be to post a one or two paragraph summary of the day's class, describing what they viewed as the main point. This would also be a good time to post a question relating either to the course material, homework, or course organization, or to environmental economics as it applies to some current issue. I will try and answer the questions, either in class or on e-mail; others are welcome to respond as well.

You may also want to log on to a discussion group focusing on environmental economic issues. (This might be a good way to develop a paper topic, and to gather information for your paper-- below is a query that came across while I was writing this syllabus!).

Date: Tue, 09 Jan 1996 10:59:30 +1200
Subject: The Political Economy of Environmental Groups

I am an undergraduate doing a directed study on the political economy of environmental groups. By this I mean the changes that environmental groups see and believe need to occur in both the political and economic spheres internationally to achieve sustainable development globally.

I would appreciate any assistance subscribers to Ecological Economics could provide by supplying, either references to books or internet addresses that contain information related to this subject.

Attendance: Each student is allowed two absences over the course of the term. Absences above this number will reduce your class participation grade.

Evening Classes: Once during the term we will have class at 7:30 in the evening. On 4/16 we will participate with Professor John Wish's class in an exercise on promoting sustainable development in Ecuador. Mark the April date!

Academic Honesty

I encourage you to study together, discuss the material, prepare for examinations together, and proofread each other's papers. It is important, however, that you know where to draw the line between beneficial collaboration and plagiarism, cheating and other forms of academic dishonesty. I take this issue very seriously; in recent years, several students have earned failing grades in my class following a cheating or plagiarism episode. If you have any questions about where this line is I encourage you to come and talk to me about it. Also make sure that you have read and that you understand the statement in the booklet you have received entitled Academic Integrity Policy and Procedures.

Week 1

I. INTRODUCTION: Global Warming

Lecture:(G) 1.
(R) "Record Average Heat..." SF Examiner, 1/4/96.
(R) "Scientists Say Earth's Warming..." NYT, 9/18/95.

Background: Film, on library reserve: "After the Warming"


Lecture: (G) 2. Ethics and Economics

Background: (R) "Sustainable Development, Science and Religion"

Week 2

Lecture: (G) 3. Pollution As An Externality

Background: (H) Preface and CHS. 1-4.

Week 3

Lecture: (G) 4. The Efficiency Standard
(R ) "Two Nobelists: A Coase for Rejoicing", WSJ, 10/17/91.

Background: (G) pp. 189-213; 227-230
(R ) "Chain Saw Surgery..." Washington Post, 1/15/95.
(R ) "House Votes Major Changes...", NYT, 5/17/95.

Week 4

Lecture: (G) 5. The Safety Standard

Background: (G) pp. 215-227; 230-234.
(R) "Indian Tribes Contend With Some of Worst of America's Pollution", WSJ, 11/29/90


Week 5

Lecture: (R) Goodstein, Second Edition "Neoclassical Sustainability"

Lecture: (R) Goodstein, Second Edition "Ecological Sustainability"

Week 6

Lecture: (G) 6. Measuring the Benefits of Environmental Protection

Background: (R ) "How Two Industries Created a Fresh Spin...", WSJ, 8/8/91.

Week 7

Lecture: (G) 7. Measuring the Costs of Environmental Protection

Lecture: (G) 8. Benefit-Cost in Practice

Week 8

Lecture: (G) Is More Really Better? Social Consumption and Economic Growth

Background: (H) Ch. 8
(R) Chapters 1 & 6 in Schor, Juliet, The Overworked American, (Basic Books: 1991)


Week 9


Lecture: (G) 11.The Political Economy Of Environmental Regulation
(G) pp. 230-238.

Background: (G) 13. Monitoring and Enforcement
(H) CH. 7
(R) "What Really Pollutes? Study of a Refinery Proves an Eye-Opener", WSJ, 3/29/93.
(R) "The River that Runs Through Boise Runs Clear Once Again", WSJ, 4/22/94.
(R) "Right to Know: A U.S. Report Spurs Community Action By Revealing Polluters", WSJ, 1/2/91.
(R) "The Push to Expand Property Rights..." WSJ, 4/4/95.


Lecture: (G) 14. Incentive-Based Regulation: Theory

Background: (H) CH. 5.

Week 10

Lecture: (G) 16. Incentive-Based Regulation: Practice

Background: (R )"Trading Emissions to Clean the Air: Exchanges Few..." Resources, #122
(R ) "Utilities Overcomply with Clean Air Act..." WSJ, 11/15/95.
(H) CH. 11

Lecture: (G) 16. Promoting Clean Technology: Theory

Week 11

Lecture:(G) 17. Promoting Clean Technology: Practice Salmon Safe?

Background: (R) "Green Product Sales Seem to be Wilting", WSJ, 5/18/92.
(R) "How Japan Became So Energy Efficient: It Leaned on Industry", WSJ, 9/10/90.
(R) "Portland, Ore. Shows Nation's Planners How to Guide Growth", WSJ, 12/26/95.


Week 12


Lecture: (G) 18. Energy Policy and the Environment

Background:(R ) "Solar Power for Earthly Prices", NYT, 11/15/94.

Lecture:(G) 19. The Environment, Development and Poverty

Background:(R) "Shell's Nigerian Fields Produce Few Benefits..." WSJ, 5/6/94.
(R ) "Fates of Alaska Tribes May ride on Impact...", WSJ, 11/2/95.
(R) "Best Things in Life Aren't Always Free in Mexico City", WSJ, 5/8/91.
(H) CH. 6
(G) 21. Environmental Policy in Poor Countries

Week 13

Lecture: (G) 20. Population Pressure and Consumption Growth

Lecture: (G) 21. Global Agreements

Week 14

Lecture: (H) CH. 12


You have a choice of major writing assignments. You can either write a research paper, or work in a group on a clean technology project.

I. Research Paper

The paper should be between 15 and 20 pages in length, double-spaced. There are four deadlines associated with the paper:

1. Question. A specific question, or hypothesis, which your paper will answer must be developed by February 14. Your hypothesis must be a an actual question (ending with a question mark!) that is one sentence in length. Examples: Should the Portland metro area loosen it's zoning boundaries to accommodate growth? Are landless peasants or commercial loggers contributing more to Amazonian deforestation? Which would be a better approach to dealing with medical waste: recycling or incineration? Given the uncertainty associated with global warming, should we take aggressive control measures now or wait for better information? Is retiring dams an economically feasible way to promote salmon recovery?

To develop a topic, you should read 3-4 newspaper or magazine articles in an area you find interesting. Among other places, look at Environment magazine, The Economist, The EPA Journal , Sierra, Garbage, Audobon or E-Magazine. Also, look in the index to your textbook, and read all the references to your problem that are listed there. Then you'll be prepared for any possible question I could ask!

Beginning on February 14, I will schedule a time with each student in which they will make a five minute presentation on their topic, and what they hope to discover over the course of the semester. I will grade your oral presentations based both on content, and delivery. This means you should practice at least twice before making your presentation. Feel free to use overheads, diagrams, etc.. The same day as your presentation, you should hand in a one page paper (maximum) which states your hypothesis and summarizes the basic points made in your oral presentation.

2. Sources. A list of at least 15 sources (books, articles, etc..) should be turned in on February 28 .

3. Short Draft. You should develop a 4-5-page version (5 -page maximum) of your paper, to be brought to class on March 28th. Somewhere in the first paragraph should be your one-sentence question; the last paragraph should consist of a tentative answer to that question, supported by the argument you have developed in your paper.

Bring three copies of your paper, one for me, and two to give to your classmates. ALSO BRING A BLANK CASSETTE TAPE WITH YOUR NAME ON IT. Over the weekend, we will all comment on the paper, returning our comments to you on March 31. Keep all the comments, including those on tape; you must turn them in along with your final draft.

4. Final Paper. The finished version of the paper should be turned in April 23 at 5pm. The paper should begin with a 1 paragraph abstract, stating the question the paper addresses, and your conclusion. As with the short paper, somewhere in the first paragraph should be your one-sentence question; the last paragraph should consist of an answer to that question, supported by the argument you have developed in your paper. If this sounds like a boring way to write, don't worry about that: worry about being clear!

In addition to meeting deadlines, your grade will be determined by (1) the quality of the five-page draft, and (2) the quality of the final paper. Both the outline and the paper should be proofread carefully for spelling, organization, and grammatical errors. The paper is a major part of your grade. Take it seriously! If you need help at any stage come talk to me, or you can consult the tutors at the Writing Center. Late papers will be downgraded one letter grade for every late day.

II. Clean Technology Project

One of the themes of this course is that achieving a sustainable future will require rapid development of clean technologies. These technologies will be needed over the medium term to accommodate the impact of both rapidly rising population and consumption per person. Clean technologies have two key features: they are environmentally superior to existing technologies, and they cost no more than existing technologies. The second feature is required to get people to adopt the technologies widely, so they can have a positive impact on environmental quality.

This project asks you first to identify a clean technology which might be adopted by some or all members of the college community. Second, you must develop and implement a marketing plan for that technology.

For this project, you can work in groups of two or three. Note that there are four deadlines associated with this project: the first one appears in only 4 weeks! So you'll need to get an early start. In the beginning, I expect that each group will want to meet with me at least once a week; I can help you with initial ideas, and suggestions on finding further information.

A. Identify your Clean Technology:

5 page draft: due 4 weeks into term.
10 page report: due 7 weeks into term.

In the initial phase of the project, you must first identify a clean technology. Some examples from past classes have been: energy efficient overhead light bulbs, elevator motors, and exit sign lighting, water saving faucet heads, motion detectors in classrooms for turning off lights, increased use of recycled paper by campus departments, composting by food services, reduced use of pesticides by buildings and grounds, improvements in dorm heating efficiency, improvements in bus service leading to a reduction in car trips, and a video return service to cut back on car trips.

To prove that your idea is in fact a clean technology, you must calculate both the environmental benefits and the cost savings to the purchaser of the technology.

B. Develop and Implement a Marketing Plan

5 page draft marketing plan: due 11th week
10 page final marketing plan: due finals week.

Once you have identified your clean technology, you need to develop a strategy for convincing consumers to adopt your technology. If you are making a recommendation to the college, you will be expected to make a presentation to the relevant college committee. What kind of time tables, and specific actions do you recommend? Why? If you are trying to convince students, faculty or staff to buy your technology, than you can actually launch a green business, or at least lay the foundation for doing so. For example, the students who proposed a video drop estimated the demand for the service via a survey, determined their profit-maximizing price, and designed a drop-off box and payment scheme.

All reports should be proofread for spelling, organization, and grammatical errors. All reports must be accompanied by a blank cassette tape with your group name on it. The reports are a major part of your grade, and will be graded based on: precision, thoroughness, clarity of the references, creativity and initiative. Take them seriously, and have fun! If you need help at any stage come talk to me.