NYU Stern School of Business

Undergraduate College

C30.0225.001: BUSINESS AND THE ENVIRONMENT

Spring 2011

Instructor Details

Radner, Roy

rradner@stern.nyu.edu

212-998-0813

TBA

KMC 8-87


Administrative Assistant:

Shirley Lau (slau@stern.nyu.edu)

 

Course Meetings

TR, 2:00pm to 3:15pm

KMC 3-80


Final Exam:

Schedule exceptions
    Class will not meet on:
    Class will meet on:

 

Course Description and Learning Goals

Environmental problems typically arise from “market failures.” This seminar will examine several environmental issues at the local, national, and international levels, such as smog, acid rain, energy, fishing, and global climate change. Drawing on the theories of externalities, market failure, and mechanism design, we shall explore the causes of these problems, and some of the potential remedies, including government regulation, voluntary associations, treaties, and markets for emissions, as well as potential related business opportunities. Lectures and class discussions of assigned reading will be supplemented with presentations by outside speakers involved in environmentally related business ventures.

 

Course Pre-Requisites

Introductory Microeconomics

 

Course Outline

TENTATIVE, SUBJECT TO CHANGE

Outline and Reading Assignments

1. Introduction

            TT, Ch. 1, 1-14.

            Fullerton, D., and R. Stavins (1998), “How Economists See the Environment,” Nature, 395, 6701 (EE, Ch. 1).

            Hardin, G. (1968), “The Tragedy of the Commons,” Science, 162, 1243-48 (EE,Ch. 2).

 

2.  , Local and Regional

            TT, Ch. 15, 326-349.

            Henderson, J. V. (1996). "Effects of Air Quality Regulation," Amer. Econ. Review,  86 (4), 789-813.

            Schmalensee,  R., et al (1998), “An Interim Evaluation of Sulfur Dioxide Emissions Trading,” J. of Economic Perspectives, 12, 53-68 (EE, Ch. 21).

            Stavins, R. N. (1998), “What Can We Learn from the Grand Policy Experiment? Lessons from S02 Allowance Trading,” J. of Economic Perspectives, 12, 69-88 (EE, Ch. 22).

            Sandler, M. J., “It’s Immoral to Buy the Right to Pollute (with replies),” N.Y. Times, Dec. 15, 1997, p. A29.

            Supplementary:  Joskow, P. L, and R. Schmalensee (1988), “The Political Economy of Market-Based Environmental Policy: The U.S. Acid Rain Program,” J. of Law and Economics, 41, 37-83 (EE, Ch. 28).
 

3. Valuing the Environment

            TT, Chapters 2-3, 15-63.

            Portney, Paul R. (1994), “The Contingent Valuation Debate: Why Economists Should Care,” J. of Economic Perspectives, 8, 3-17.

Supplementary

            Hanemann, W. Michael (1994), Valuing the Environment through Contingent Valuation,” J. of Economic Perspectives, 8, 19-43.           

 

4. Externalities, Market Failure, and Environmental Problems

            TT, Ch. 4-5, 554-89.

 

5. Environmental Economics: An Overview.

            TT, Ch. 14, 301-325.

 

6. Air Pollution, II. Transportation

            TT, Ch.17, 366-392.

            Austin, D., and T. Dinan (2005). "Cleaning the Air: The Costs and Consequences of Higher CAFE Standards and Increased Gasoline Taxes," J. of Environmental     Economics and Management, 50 (3), 562-582.
            Espey, M., and S. Nair (2005). "Automobile Fuel Economy: What Is It Worth?" Contemporary Economic Policy, 23 (3), 1-7.

 

7. Natural Resource Economics: An Overview

            TT, Ch. 7, 128-139.

8. Energy

            TT, Ch. 8, 140-173.

            Vaitheeswaran, V. V., Ch. 7 (pp. 194-219), Power to the People, Farrar, Strauss,and Giroux,  New York, 2003.

 

9. Water

            TT, Ch. 9, 174-201.

10. Fishing.

            TT, Ch. 13, 272-300.

            RFF, pp. 35-41, 61-62,131-135.

White, L. J., "The Fishery as a Watery Commons: Lessons from the Experiences of Other Public Policy Areas for U.S. Fisheries Policy." Stern Econ. Dept., Nov. 2006

 

11. Climate Change

            TT, Ch. 16, 350-365.

            Jacoby, H., et al (1998), “Kyoto’s Unfinished Business,” Foreign Affairs, 77, 54-66 (EE, Ch. 24).

            Nordhaus, W. D. (2007), “A Review of The Stern Review of the Economics of Climate Change, J. of Economic Perspectives, vol. XLV, no. 3, 686-702.

            Weitzman, M. L. (2007). “A Review of The Stern Review of the Economics of Climate Change, J. of Economic Perspectives, vol. XLV, no. 3, 703-24.

            Tol, R. S. J. (2006), “The Stern Review of the Economics of Climate Change,” Economic and Social Research Institute, Hamburg, Oct. 30, 2006 (unpublished).

            Supplementary:

            Nordhaus, W. D. (1993), “Reflections on the Economics of Climate Change,” J. of Economic Perspectives, 7, 11-25 (EE, Ch. 22).

            Schelling, T. C. (1997), “The Cost of Combating Global Warming: Facing the Tradeoffs,” Foreign Affairs, 76, 8-14 (EE, Ch. 23).

            Radner, R. (2001), “Notes on Noncooperative Game Theory,” Econ. Dept., Stern School, NYU (unpublished).

            Dutta, P. K., and R. Radner (2004), “Self-Enforcing Climate-Change Treaties,” Proc.National Academyof Sciences of the U.S., 101, 4746-4751.

 

12. The Population Problem

            TT, Ch. 6, 104-127.

 

13. Sustainable Development

            TT, Ch. 5, 90-103; Ch. 21, 477-508; Ch. 22, 509-518.

 

Supplementary References

            Vaitheeswaran, Vijay V., Power to the People, New York: Farrar;, Strauss, and Giroux, 2003.

            Smil, Vaclav, Energy at the Crossroads, Cambridge, MA: The MIT Press, 2003.

           

The following references contain case studies on environmentally efficient and socially responsible companies that are profiting from their integration of those principles with profitability.

            Heal, Geoffrey M., Corporate Environmentalism: Doing Well by Being Green (August 2007). Available at SSRN: http://ssrn.com/abstract=1009755

Paul Hawken, Amory Lovings, L. Hunter Lovins, Natural Capitalism – Creating the next Industrial Revolution. Back BayBooks, 2000.

William McDonough and Michael Braungart, Cradle to Cradle – Remaking the way we make things.  New York: North Point Press, 2002.

James A. Fava, Cynthia L Figge, Konrad Saur, Steven B. Young, Mapping the Journey – Case studies in strategy and action toward sustainable development. Sheffield: Greenleaf Publishing, 1999.

            Gary Erickson with Lois Lorentzen, Raising the Bar – Integrity and Passion in Life and Business. San Fransisco: Jossey-Bass, 2004.

Yvon Chouinard, Let my people go surfing – the education of a reluctant businessman, New York: Penguin Press, 2005.

 

Required Course Materials

Textbook: Tietenberg, T., and L. Lewis, Environmental Economics and Policy (6th ed.).

            Addison-Wesley, Boston, 2009, (hereafter cited as TT). 

 

Plus various articles, many of which are found in the following two collections:

Stavins, R. N., ed., Economics of the Environment: Selected Readings (4th ed.). W. W.

 Norton, New York, 2000 (hereafter cited as EE).

Oates, W. E., ed., The RFF Reader in Environmental and Resource Policy (2nd ed.).

Resources for the Future, Washington, DC, 2006 (hereafter cited as RFF).

 

Copies of most of these articles can be downloaded from JSTOR. I shall make arrangements to make the others available. Other references will be added during the semester, especially in the area of potential business opportunities.

 

Assessment Components

Course grades will be based on class participation, a mid-term examination, and either a term paper or a final examination.

 

Grading

At NYU Stern we seek to teach challenging courses that allow students to demonstrate their mastery of the subject matter.  In general, students in undergraduate core courses can expect a grading distribution where: 

Note that while the School uses these ranges  as a guide, the actual distribution for this course and your own grade will depend upon how well  you actually perform in this course.

 

Re-Grading

The process of assigning grades is intended to be one of unbiased evaluation. Students are encouraged to respect the integrity and authority of the professor’s grading system and are discouraged from pursuing arbitrary challenges to it.

If you believe an inadvertent error has been made in the grading of an individual assignment or in assessing an overall course grade, a request to have the grade re-evaluated may be submitted. You must submit such requests in writing to me within 7 days of receiving the grade, including a brief written statement of why you believe that an error in grading has been made.

 

Professional Responsibilities For This Course

Attendance

 

Participation

In-class contribution is a significant part of your grade and an important part of our shared learning experience. Your active participation helps me to evaluate your overall performance.
You can excel in this area if you come to class on time and contribute to the course by:

 

Assignments

 

Classroom Norms

 

Stern Policies

General Behavior
The School expects that students will conduct themselves with respect and professionalism toward faculty, students, and others present in class and will follow the rules laid down by the instructor for classroom behavior.  Students who fail to do so may be asked to leave the classroom. 

 

Collaboration on Graded Assignments
Students may not work together on graded assignment unless the instructor gives express permission. 

 

Course Evaluations
Course evaluations are important to us and to students who come after you.  Please complete them thoughtfully.

 

Academic Integrity

Integrity is critical to the learning process and to all that we do here at NYU Stern. As members of our community, all students agree to abide by the NYU Stern Student Code of Conduct, which includes a commitment to:

The entire Stern Student Code of Conduct applies to all students enrolled in Stern courses and can be found here:

Undergraduate College: http://www.stern.nyu.edu/uc/codeofconduct
Graduate Programs: http://w4.stern.nyu.edu/studentactivities/involved.cfm?doc_id=102505

To help ensure the integrity of our learning community, prose assignments you submit to Blackboard will be submitted to Turnitin.  Turnitin will compare your submission to a database of prior submissions to Turnitin, current and archived Web pages, periodicals, journals, and publications.  Additionally, your document will become part of the Turnitin database.

 

Recording of Classes

Your class may be recorded for educational purposes

 

Students with Disabilities

If you have a qualified disability and will require academic accommodation of any kind during this course, you must notify me at the beginning of the course and provide a letter from the Moses Center for Students with Disabilities (CSD, 998-4980, www.nyu.edu/csd) verifying your registration and outlining the accommodations they recommend.  If you will need to take an exam at the CSD, you must submit a completed Exam Accommodations Form to them at least one week prior to the scheduled exam time to be guaranteed accommodation.

 

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