RES-ECON 720: Environmental and Resource Economics

Syllabus

Example syllabus only – exact content subject to change. Please see your instructor’s syllabus for the current term for your specific course’s guidelines

David Keiser, 205B Stockbridge Hall, @email

John Stranlund, 222 Stockbridge Hall, @email

Objectives and Requirements

ResEcon 720 is a three-credit graduate course in environmental and natural resource economics. We intend to provide the foundational knowledge for advanced study of this field. All students are expected to have taken graduate courses in microeconomic theory and statistics.

The course is split into two parts. Professor Stranlund will cover dynamic optimization with environmental and natural resource applications and the theory of environmental regulation in the first part. Evaluations in the first part will be based on a series of homework assignments and a midterm exam. Professor Keiser will cover empirical applications in the second part.

Evaluations will be based on weekly written responses to articles, active engagement at all class meetings, and a discussion leadership assignment. At a minimum, we expect each of you to attend every class prepared to discuss the assigned readings.

Texts

There are no required texts for this course, but two that we strongly encourage you to have for your library are:

  • Daniel J. Phaneuf and Till Requate. 2017. A Course in Environmental Economics: Theory, Policy, and Practice. Cambridge University Press.
  • Angrist, Joshua and Jorn-Steffen Pischke. 2009. Mostly Harmless Econometrics. Princeton University Press.

We will refer to these texts in the reading list as Phaneuf and Requate (2017) and Angrist and Pischke (2009), respectively.

In addition, we recommend that you familiarize yourselves with an undergraduate text like Tom Tietenberg's and Lynne Lewis’s Environmental and Natural Resource Economics (12th edition, 2023). This text provides intuitive and graphical expositions of topics that we will explore more rigorously. You may also consider Barry and Martha Field’s Environmental Economics (Evergreen release, 2024)) and Barry Field’s Natural Resource Economics (4th edition, 2023).

These texts are used in our introductory undergraduate classes in this field.

In addition, we recommend that you familiarize yourselves with the top journals in our field, especially the Journal of Environmental Economics and Management (JEEM) and the Journal of the Association of Environmental and Resource Economists (JAERE). You should also familiarize yourself with the Review of Environmental Economics and Policy. This journal publishes accessible reviews of various topics in environmental economics, so it is a good source for gaining a broad understanding of research in this field.

Course Outline and Reading List

(Subject to Change)

The reading list is also meant to serve as a partial bibliography should you wish to delve deeper into a particular topic. If you wish to go even further, please feel free to ask us about additional readings.

 

First Module: Professor Stranlund (Through Tuesday, March 24)

Readings marked with a (*) in the list below will be stressed and should be read prior to class.

Dynamic Optimization

*John Stranlund. “Optimal Control with Natural Resource Applications.”

The Economic Theory of Environmental Regulation

Fundamentals of Designing Environmental Policies

Goulder, Lawrence H., and Ian W.H. Parry. 2008. “Instrument choice in environmental policy.”

Review of Environmental Economics and Policy 2(2), 152-174.

*Muller, Nicholas Z., and Robert Mendelsohn. 2009. “Efficient pollution regulation: getting the prices right.” American Economic Review 99(5), 1714–1739.

*Shapiro, Joseph S., and Reed Walker. 2025. "Is air pollution regulation too lenient? evidence from US offset markets." American Economic Review 115(9), 3058-3080.

Phaneuf and Requate (2017), Chapter 3.

*John Stranlund. “Introduction.”

*John Stranlund. “Fundamentals of Environmental Regulation.”

 

Market Imperfections

Juan Pablo Montero. 2009. “Market power in pollution markets.” The Energy Journal 30, 115- 142.

Phaneuf and Requate (2017), Chapters 6, 8.3 and 8.4.

*Requate, Till. 2007. "Environmental Policy under Imperfect Competition." In The International Yearbook of Environmental and Resource Economics 2006/2007: A Survey of Current Issues. Tom Tietenberg and Henk Folmer (eds.), Edward Elgar Publishing.

[Focus on Sections 1, 2, 4.1 – 4.3, and 9]

*John Stranlund. “Environmental Regulation and Imperfect Competition.”

 

Regulation under Abatement Cost Uncertainty

*M.J. Roberts and M. Spence. 1976. "Effluent Charges and Licenses under Uncertainty,"

Journal of Public Economics 5, 193-208.

Borenstein, Severin, James Bushnell, Frank A. Wolak, and Matthew Zaragoza-Watkins. 2019. "Expecting the unexpected: emissions uncertainty and environmental market

design." American Economic Review, 109(11), 3953-3977.

*Phaneuf and Requate (2017), Chapter 4. (Especially, 4.1 and 4.2)

*John Stranlund. “Taxes vs. Tradable Permits vs. Hybrid Policies.”

 

Regulating non-point source pollution (if we have time)

*Shortle, James and Richard Horan. 2001. The economics of nonpoint pollution control, Journal of Economic Surveys 15(3): 255-289.

*John Stranlund. 2013. Regulating nonpoint source pollution.

 

Enforcing environmental policies: Standards (if we have time)

* Gray, W.B. and Shimshack, J.P., 2011. The effectiveness of environmental monitoring and enforcement: A review of the empirical evidence. Review of Environmental Economics and Policy, 5(1), pp.3-24.

*John Stranlund. 2024. Enforcing environmental policies: Standards.

 

Second Module: Professor Keiser (Thurs., March 26 through Thurs., May 7)

The dates below specify when we will discuss these papers; please read the papers and complete any tasks in advance of the specified date (and bring a copy to class!).

Part 1. Natural Capital Accounting and Environmental Statistics

Required Readings

Optional:

 

Part 2. Water (Quantity)

Required Readings

 

Part 3. Fisheries

Required Readings

Part 4. Mining

Required Readings

 

Part 5. Land

Required Readings

 

Part 6. Select Topics

(what we cover will depend on time. This is a mix of topics on insurance, flooding, conflict and disasters)

Academic Integrity

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Diversity, Equity and Inclusion

The University of Massachusetts-Amherst is committed to fostering inclusive learning environments. I believe that the University is enriched by diversity along a number of dimensions, including race, ethnicity and national origins, gender and gender identity, sexuality, class and religion. Therefore, I view the diversity that students bring to this class as a resource, strength, and benefit. Your suggestions about how I might offer a more inclusive course are encouraged and appreciated.

Accommodation Statement

The University of Massachusetts Amherst is committed to providing an equal educational opportunity for all students. If you have a documented physical, psychological, or learning disability on file with Disability Services (DS), you may be eligible for reasonable academic accommodation to help you succeed in this course. If you have a documented disability that requires an accommodation, please notify me within the first two weeks of the semester so that we may make appropriate arrangements. For further information, please visit Disability Services (https://www.umass.edu/disability/).

Title IX Statement (Non-responsible Employee)

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