Course Name: Natural Resource and Environmental Economics
Course Code: Econ- 2091
COURSE DESCRIPTION
The Course requires students’ background knowledge of introductory economics, and more of
microeconomics. The theoretical foundations try to elaborate how environment affects (and is
affected by) human activities. The subject is concerned on the relationship between
environment and economic activities; the issue and role of property rights; optimal and
sustainable utilization of depletable (non-renewable) and renewable resources; optimal
pollution control; environmental policy instruments; environmental valuation and analysis; and
international environmental issues. Since every rational individual and the society as a whole is
concerned on the balance between human activities and preservation of safe environment for
the existing and future generations, the basic question is how to use resources and the
environment in an optimal and sustainable manner. The Course aims at enabling the students
to understand such circumstances and be aware of the effects of economic activities on the
environment in policy making processes.
COURSE OBJECTIVES
The broad objective of this Course is to introduce students to natural resource and
environmental economics. At the end of the Course students are expected to know the
following main elements: the subject matter of resource and environmental economics, market
failure and the environment, natural resource economics, the links between development and
environment, environmental policy instruments to control pollution, environmental valuation
techniques and international environmental issues.
More specifically, students will be able to:
Understand the general relationships between human activities and the environment
Describe the role of property rights in resource use and allocation decisions
Identify resource categories and their optimal and sustainable use
Know optimal pollution control decisions and policy instruments
Identify the different environmental valuation techniques
Apply environmental valuation methods on the socioeconomic activities that will have an
influence on the environment (and resources)
Make rational decisions in utilization of environmental resources and as such, they could
take their part in the activities of solving environmental problems
Course Contents
Course contents References
Chapter One: Introduction
1.1 Introduction to the subject matter Perman et al. (chapter 1)
1.2 Interlinkage between the environment and Tietenberg and Lewis
3hours the economy (chapter 1)
1.3 The two views for the prospects in the
environment
Unit Two: Some issues on the environment and development
2.1 The environment and emerging
development issues Perman et al. (chapter 2)
9hours 2.2 Population growth and the environment
2.3 Economic growth and the environment
2.4 Sustainability and economic policies
Unit Three: Efficiency, property rights, market failure and the environment
3.1. Efficiency, discounting & intergenerational Tietenberg and Lewis
equity (chapter 2)
3.2. Property rights Perman et al. (chapter 5)
9 hours 3.3. Externalities
3.4. Public goods
3.5. Common property resources
3.6. Correcting market failure
Unit Four: Natural resources
4.1 Classification of natural resources Tietenberg and Lewis
4.2 Non renewable resources (chapters 5-12)
4.2-1 Theory of optimal depletion Perman et al. (chapters 14,
4.2-2 Energy resources 15, 17, 18)
4.2-3 Minerals
4.3 Renewable resources
9 hours
4.3-1 Biological dimension of fisheries
4.3-2 Theory of optimal use of fisheries
4.3-3 Forest resources: Economic value of
forest resources; biological dimension of
forestry, and economic dimension of forest
resources
Unit Five: Economics of pollution control and environmental policy
5.1 Pollutant taxonomy Tietenberg and Lewis
5.2 Efficient allocation of pollution (chapter 14)
5.3 Environmental policy instruments Perman et al. (chapter 7)
5.3-1 Command and control (emission
standards)
6 hours
5.3-2 Emission charges
5.3-3 Transferable emission permits
5.3-4 Liability rules
5.3-5 Other instruments: voluntary
agreements, information disclosure
Unit Six: Valuation and cost-benefit analysis of environmental resources
6.1 Valuation of the environment Perman et al. (chapters 11
6.1-1 Welfare foundations and 12)
6 hours 6.1-2 Dimensions of value Tietenberg and Lewis
6.1-3 Valuation methods (chapters 3 and 4)
6.2 Environmental analysis
Chapter Seven: International environmental issues
6 hours 7.1. International environmental externalities Perman et al. (chapter 10);
and public goods and Tietenberg and Lewis
implications/solutions (chapter 16)
7.2. International agreements
7.3. Economics of climate change
7.4 International trade and the environment
**NB: This course needs practical observation in a field so that the theoretical concepts are
verified through practical observation. The load for the course is indicated in the load
distribution of the course.
Course Policy
Duplication of assignments is strictly forbidden; it entails serious penalty.
Assignments are required to be submitted before or on the deadline.
All cheating cases will be reported to the department for appropriate decision.
Students should switch off their cell phones while they are in class and must keep their cell
phones switched off during all kinds of exam sessions.
Missing a quiz without convincing evidences will earn the students a grade of zero marks in
that specific quiz
Since field trips attached to the course are few in number, all students should attend the
field trips.
Course Delivery Methods
The delivery method shall be student-centered. Students are highly expected to participate in
class works at the middle and end of each session and in group discussions inside and outside
of the class. Specifically the course will be delivered through the following methods:
Lecture Method
In-class problem solving
Group Work
Assignment
Assessment Methods
Student evaluation in this Courseconsist both formative and summative assessments including
quizzes, test and final exam. Marks will be allocated according to the following grading
schedule.
Assessment method Weight
Assignment (Indiv/group) 20%
Quizzes/Tests(Max of 10 % each) 30%
Final Exam 50 %
Total 100%
REFERENCES:
Perman, R., Y. Ma, J. McGilvray and M. Common, 2003. Natural Resource and Environmental
Economics, Third Edition, Pearson Education Limited, London.
Tietenberg T. and L. Lewis, 2015. Environmental and natural resource economics, 10 th edition,
Pearson Education Limited, Boston.
