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EEP 101/ ECON 125
Economics of Resources andthe Environment
Professor David Zilberman
Department of Agricultural and
Resource Economics
University of California, Berkeley
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Lecture 1: Introduction
• The Instructors• GSIs
• Sections
• Readings (Online Texts)
• Grading
• Course Outline
• What You Will Study, Hopefully
•
Special Issues• Details available on the syllabus and online
on the class website: (https://bspace.berkeley.edu)
http://are.berkeley.edu/courses/EEP101/spring06/http://are.berkeley.edu/courses/EEP101/spring06/
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The Instructors
• David Zilberman
• Office Location: 337 Giannini Hall
• Office Hours: Thursdays, 2:30-3:30 pm
• Website: professorzilberman.com
• Email: [email protected]
mailto:[email protected]:[email protected]
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GSI’s
• Geoffrey Barrows
• [email protected]
•
Lilia Chaidez• [email protected]
• Abu Nayeem
•
[email protected]
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The Professor
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Background of Zilber
• Originally from Israel (you can tell by his
Zilbonic accent).
• Works on water in California (got a Drippey
Award, the Oscar of Plumbing (come see thewax trophy in
his office).
• Expert on biotechnology, environmental
services, and pesticides (always attracted totoxic materials and
never shies from
controversy).
• Basketball fanatic (has season tickets to
Warriors games).
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Sections
• Section 1: Monday 9-10am, 2066 VLSB (Lilia)
• Section 2: Monday 8-9am, 2032 VLSB (Lilia)
• Section 3: Wednesday 9-10am, 2062 VLSB (Geoff)
• Section 4: Wednesday 3-4pm, 2038 VLSB (Geoff)
• Section 5: Friday 1-2pm, 2066 VLSB (Abu)
• Section 6: Friday 3-4pm, 2030 VLSB (Abu)
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Readings (Online Texts)
• There is no required textbook. The detailed coursenotes will
be on https://bspace.berkeley.edu.
•
For supplementary readings, we recommend thetextbooks listed on
the syllabus.
• Lecture summaries will also be available at
https://bspace.berkeley.edu.
• The detailed notes and lecture summaries will bemodified to
reflect the revised content of the class.
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Grading
• Grading
• 30% midterm, 50% final, and 20% homework.
• Students may opt to submit a paper. In thiscase grading is 66%
classwork (the above)and 34% for the paper.*
• * Possible topics for the optional paper, inaddition to sample
papers, can be found onbspace after the midterm.
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Optional paper
• The optional paper should be 10-15
pages long.
•
Should address environmental issues,providing an economic
perspective.
• The format should follow a policy
memo.
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Course Outline
• The syllabus includes a class outlinerevealing the materials
to be covered in eachoutline.
• The first five lectures are as follows:• Lecture 1:
Introduction (Today!)
• Lecture 2: When Is a Market Socially Optimal?
• Lectures 3: Welfare Economics
• Lecture 4: Negative Externalities
• Lecture 5: Externality Policies
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What You Will Study, Hopefully
• Theory of externalities• How to use carrots & sticks to
reduce pollution
• The political economy of pollution control
•
Public goods• The economics of parks and environmental
amenities
• Collective actions for a greener world
•
Evaluation of nonmarket benefits• Resource management over
time
• Conservation policies
• Sustainability
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Special Issues
• Water
• Climate Change
•
Pesticides• Biotechnology
• Environmental Services
• Biofuel
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Examples of topics•
The impacts of overpopulation• The economics of the Clean Water
Act
• Energy in China
• Pesticide contamination in groundwater• The economics of oil
prices
• Animal waste: How much is too much?
• The Kyoto Protocol
• The decline of the fish population
• The three Gorges Dam Projects: Benefit for
the future of uncalculated risk?
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List of Course Resources
•Course readings
•Exam materials
•Lecture presentations
•Optional paper
•Problem sets
•Related readings
•Section notes
•
Syllabus
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Some Overview Material
• Interdisciplinary and multidisciplinary research
• Evolution of disciplines
• Economics• Public policy research
• Choices of policy intervention
• Examples
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Interdisciplinary vs.
Multidisciplinary
• Interdisciplinary: Integrated approach. Biological
and physical concepts are introduced to risk-analysis
frameworks.
• Multidisciplinary: Work in parallel. Several
disciplines analyze a problem with some
interaction, e.g., National Research Council or U.N.
task force.
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Interdisciplinarity Is Relative
• Interdisciplinary research varies.
Includes:
- Collaboration between a soil physicist and soil
chemist working on soil performance.- Integration of economics,
physics, and biology
applied to climate change.
•
It is useful to distinguish between interdiscipli-nary research
within a major branch of science
and between branches of science.
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Evolution of Disciplines
• Major problems or discoveries (DNA) begot
disciplines.• Computer science and chemical engineering
are new disciplines, and astrology is a dead
one.
• Disciplines are born, merge, and die.
Conflict withina discipline
Integration of
methods
New complex
problems
A discipline is born
Lack of
excitement
A discipline dies
P l M E b d I t di i li
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People May Embody Interdisciplinary
Approaches
• Reality does not know disciplinary borders.
• New solutions may integrate disciplinary approaches.
• Pest control theory merges economics with biology
•
Management, law, and policy integrate decision theory
scienceswith natural sciences.
• Geography is interdisciplinary in nature.
• Science grows when methods are imported between
disciplines.• Social sciences and biology are revitalized by
mathematics.
• Interdisciplinarity leads to new disciplines.
f
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Multidisciplinary Education form
Interdisciplinary People• Exposure to several disciplines leads
to flexible
creative thinking and expands opportunities.
• Almost all scientists need math and computer skills.
• A scientist needs exposure to decision theory.• May become a
manager
• Is challenged to make socially meaningful discoveries
• Social criticism needs a sound science base.
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Economics
• Studies resource allocation
• Has several approaches:
•
Behavioral• Institutional
• Positive theory
• Normative theory
• Econometric
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Micro vs. Macro• Micro-behavior of consumers and firms and the
resulting
market outcomes. Issues:• Prices and quantities of goods
• Consumer and producer welfare
• Impact of market regulations
• Monopolies and imperfect competition
• Macro-aggregate behavior of the overall economy:
• Unemployment and inflation
• Money and interest rates
• Investments and savings
• International trade:
• Tariffs and barriers to trade
• International agreements
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Interdisciplinary Elements in Economics
(Every Discipline Has Some Interdisciplinary ) •
Analyzes resource allocation.• Emphasizes:
• Explaining reality and suggesting policies.
• Markets, money, and new institutions
• Rationality is an important assumption now beingchallenged by
developments in field of psychology
• Borrows heavily from math and statistics.
• Has strong applied subfields.
• Can be used an an integrating discipline
in policymaking.
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What Is Public Policy Research?
•Analysis of government activities in various areas
—
pragmatic, applied, interdisciplinary.
• Borrows much from public economics
•Market failure
— issues of environment cannot be solved
by the market; intervention is needed.
• Even when markets’ income distribution may be
undesirable.
• Needs to design interventions to clean the
environment and improve income distribution at low
cost — that is the policy challenge.
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Economic Applications to
Agriculture• Analysis of behavior and outcomes
• Crop choice
• Adoption of new technologies
• Agricultural prices
• Consumer attitude and demand
• Policy impact assessment
• Impacts of agricultural and environmental policies
• Impacts of new technologies
• Policy design
• Incentive to conserve
• More efficient innovation strategies
P li R h I
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Policy Research Is
Interdisciplinary
• Policy research combines real-world problems with
methodologies from economics, math, etc.
• Policy design requires understanding people and
politics.
• Needs to know technical options; then consider
solutions.
• Can lead to interaction with policymakers.
• Economics is frequently “the integrating
discipline.”
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Risk Assessment and Policy (Pesticides) • Risk to health
from chemicals is the outcome of
•
Application• Transfer
• Exposure
• Vulnerability
•
Research to design policy involves• Agronomy
• Hydrology
• Epidemiology/toxicology
•
Economics• Policy interventions include
• Control of application (standards or incentives)
• Protective clothing
• Medical arrangement
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P li A l t C id
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Policy Analysts Consider
the Nasty Details• Do not only study policy design, but also
implementation
• Monitoring
• Enforcement
• Case studies-key approach
• Analyzes why policies succeed and fail.
• Examines what was ignored in policy making — isit
bad science or bad design?
• Reality is their lab; they change agenda as
problemschange.
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A good policy is key for economic and
environmental well-being.
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Economic welfare and environmental sustainability
cannot be attained without interdisciplinary
knowledge to undertake policy action
