COEC 475 The Economics and Policy of the Environment, Energy, and Natural Resources

Description

Economies around the world face increasing challenges managing their environmental problems and are working towards improving their energy systems, managing exhaustible resources responsibly, and sustaining renewable resources. Economic concepts help understand the sources of environmental problems and policy options for finding solutions to these problems.

Canada’s environmental footprint is significantly influenced by the presence of a large natural resources industry (oil, gas, mining), and at the same time Canada’s geographic size gives our country stewardship over vast natural resources (water, forests, land). The linkages between energy systems, natural resource extraction, and environmental outcomes make it useful to explore them in a framework that addresses sustainability challenges comprehensively. This course seeks to provide students with an advanced, yet highly accessible introduction to the various approaches to the relationship between economics and sustainability. It probes key questions that are vital for analyzing the environmental problems of today:

1. What is the effect of economic activities on the environment, across space and/or time?
2. How can businesses and governments choose among different options for products and public projects by using appropriate metrics for sustainability?
3. How can public policies be designed to influence environmental outcomes, incentivize sustainable resource use, or make our energy system more efficient?
4. What are best practices for making our economies more sustainable environmentally?
5. How can policy makers reconcile policy trade-offs between economic efficiency and fairness (distributional outcomes)?
6. How can environmental policies be coordinated effectively across jurisdictional borders?

This course provides an introduction to the economics and policy of the environment, energy, and natural resources that is aimed at students who already have an understanding of microeconomic principles and who are preparing to engage in independent research of their own in the BIE capstone course (ECON494) in the following term. Therefore, this course is augmented with three full-lecture presentations (and discussions) of important research papers in order to showcase ‘best practice’ in research methodology and research communication. Furthermore, group work will allow students to investigate specific economic questions about environmental outcomes, resource management practices, or energy & electricity systems. Teams will present their findings to the class. This teamwork will enable students to link these economic questions to the broader context of public policy, environmental law, and technological innovation.

Learning Objectives

After successfully completing the course, students will be able to:

1. Discuss the environmental and sustainability challenges of our planet.
2. Understand the science, economics, and policy of climate change.
3. Describe the impact of pollution and pollution control.
4. Appreciate how businesses and governments use life-cycle assessment and environmental impact assessment to compare product and project alternatives.
5. Understand the differences between market-based and regulatory environmental policies and gain the ability to select policy instruments effectively.
6. Describe the different effects of environmental taxes, emission permit trading, subsidies, and hybrid policy instruments.
7. Appraise theoretical and empirical economic insights about natural resources extraction.
8. Assess the economic tools to manage renewable resources sustainably, in particular water systems, forests, and fisheries.
9. Understand the market dynamics of fossil fuel industries and energy markets.
10. Identify the challenges and opportunities for renewable energy systems.
11. Appraise the economic issues concerning electricity generation, electricity distribution, and electricity demand management.
12. Engage effectively in rigorous science-grounded discussions about environmental policy.
13. Appreciate the research methodologies and effective communication that are used in research published in major economics journals.
14. Explain, using diagrams and/or algebra, environmental policies and resource management practices.
15. Differentiate between the competing definitions of sustainability.

Prerequisites

Students taking COEC 475 must have completed Intermediate Microeconomics (ECON 315+316), Introduction to Empirical Methods (ECON 327), and Methods of Empirical Research (ECON 328). Because of overlap, students who take COEC 475 must not have taken ECON 371 (Economics of the Environment).