SNR 521: Economics of Sustainable Natural Resource Management (3 credits)
Instructor: Joe Kerkvliet
Timeframe: 14 two-hour classes

Course Goals

• To learn the basic tools of economics used to analyze environmental and sustainability issues from an economic standpoint.
• To apply the basic tools to environmental issues.
• To combine students’ expertise in natural and behavioral sciences with basic economic tools.
• To explore a selection of environmental and sustainability issues using tools developed here and in the other complementary courses.
• To create opportunities to apply market-based solutions to specific problems in natural resource management.

Course Method

We will use readings from textbooks, books, academic journals and the popular press, supplemented with class discussions and group case studies and individual research to explore the means and limits to means of using economic and market based incentives to promote the sustainable use of natural resources. Students will prepare for classroom lectures by extensive reading in economics, environmental economics, and ecological economics. Classroom lectures will be devoted to clarifying and expanding basic concepts and developing applications of basic concepts to real-world issues.

Course Description

This course is built on the premise that problems arising from the unsustainable use of natural resources can be traced, completely or in part, to failures in market mechanisms or institutions. As this is the source of unsustainable use, the correction of market failures can lead, completely or in part, to sustainable natural resource use. The course will focus on the sources of market failure, the means of correcting market failure, and real-world examples of making progress toward sustainable resource use by means of market mechanisms.

Specifically, the focus topics are:

1. Definitions of sustainable natural resource use.
2. The economic value of natural resources—nature’s services.
3. The economic value of natural resources—use and non-use values.
4. Measuring the value of natural resources—direct, indirect, and avoided cost approaches.
5. Efficient natural resource use by means of markets.
6. Market failure and externalities.
7. Tragedy of the Commons.
8. Correcting externalities-the role of government.
9. Correcting externalities-the role of non-governmental organizations.

Required texts

Asfu-Adjaye, J., Environmental Economics for Non-Economists, Singapore: World Scientific, 2000.

Daily, G. and K. Ellison, The New Economy of Nature: The Quest to Make Conservation Profitable, Washington, DC: Island Press, 2002.

Daily, G., ed. Nature’s Services: Societal Dependence on Natural Ecosystems, Washington, DC: Island Press, 1997.

Heal, G., Nature and the market Place: Capturing the Value of Ecosystem Services, Washington, DC: Island Press, 2000.

Myers, N. and J. Kent, Perverse Subsidies: How Tax Dollars Can Undercut the Environment and the Economy, Wasington, DC: Island Press, 2001.