Date	Topic	Readings	Assignments	Optional extra resources
	*Note: If you prefer PDF over PPTX files you can convert for free without an account here. Slides are not finalized until the start of each lecture--please check back for final versions.	*Note: To access certain readings you will need to be either (1) on the campus network or (2) using the library VPN Client with your UCD LoginID.
1/9	1. Introduction and welcome. What is this course? What is environmental policy? The place of economics in policy? Slides Video - Lecture 1 (38 minutes)	Keohane & Olmstead (K&O): Chapter 1 Don Fullerton and Robert Stavins, 'How Economists See the Environment,' Nature, 395:6 701 (1998). 1. What are Fullerton and Stavins' four myths about how economists view the environment? 2. What is meant by the 'efficiency' of competitive markets? 3. What is an 'externality'? 4. What does it mean for a `market (to) fail'? (What is market failure?)
1/10	Discussion/lab	Classroom experiment: "Supply and Demand" 'Supply and demand' (Experiment 1) in Theodore C. Bergstrom and John H. Miller, Experiments with Economic Principles: Microeconomics, 2nd edition, Irwin McGraw-Hill, 2000. * Read pages 3-6 [the first three pages of the PDF] before lab. * Skim the rest of the chapter, reading in depth as needed to fully understand and complete the problem set questions (that will come soon). PARTICIPATION CREDIT Submit on Canvas by the posted deadline answers to "Lab 1 - Warm up exercises". (Notes: (1) these questions come from page 6 of the lab reading; (2) we will discuss the questions in lab as well, so record/keep your answers with you.) Attend your lab section and participate. It is critical that you be on time to your section (to receive participation credit) since we are running a computer-based in class experiment that requires the number of participants to be fixed in the program at the beginning of class.
1/11	2. Economic Efficiency and Environmental Protection Slides Video - Lecture - Part 1 (24 min) Video - Lecture - Part 2 (40 min)	K&O: Chapter 2 Short animation demonstrating how marginal benefits increment to total benefits (will discuss in class).	Problem Set #1 assigned (due in 8 days)	Video explanations from MRUniversity: The Demand Curve The Supply Curve
1/16	3. Rationality and the Efficiency of Markets Slides Video - Lecture 3 - Part 1 (45 min) Video - Lecture 3 - Part 2 (17 min)	K&O: Chapter 4 Bazerman, M. H. (2021). Judgment and decision making. In R. Biswas-Diener & E. Diener (Eds), Noba textbook series: Psychology. Champaign, IL: DEF publishers. Retrieved from http://noba.to/9xjyvc3a. 1. Behavioral economics stresses three main types of bounds on human behavior (as outlined by Herbert Simon and later Richard Thaler) that represent departures from the standard economic assumption of rational choice. Describe each of these three bounds. 2. If behavior is not rational does that mean it is necessarily unpredictable? 3. What implications do the biases in judgment here have for public policy makers (i.e., “decision architects”)?		HIGHLY RECOMMENDED: Video explanations from MRUniversity: The Equilibrium Price
1/17	Discussion/lab	Lab topics: (A) Market models; (B) Bazerman (2021). PARTICIPATION CREDIT: Be prepared to discuss the Bazerman (2021) article above. You will discuss the article in small groups of 3 people. At the end of discussion, each member will be asked to self-assess how prepared they were to discuss the ideas of the paper. Group members should hold others accountable for their self-assessment. Self-assessment ranking (1-5): 5: I read the whole paper carefully, I have a copy in front of me that I marked up with my notes, I have an initial idea of how to respond to the two questions posed under the reading when assigned, and I contributed actively and informatively to my group's discussion. (This might have included asking specific, informed questions about things I don't fully understand in the paper.) 4: I read the paper and have a copy in front of me, I contributed actively to my group's discussion 3: I scanned the paper and have the basic idea, I contributed a modest amount to my group's discussion. 2: I have the paper but haven't read it deeply. I contributed a small amount to my group's discussion. [**Or: I wasn't prepared at all but picked it up quickly and discussed critically once in discussion.] 1: I'm here! What more do you want from me?
1/18	4. Market Failure, Externalities and Public Goods Slides Video - Lecture 4 - Part 1 (35 min)	K&O: Chapter 5 Ostrom, E. (2009). A General Framework for Analyzing Sustainability of Socio-Ecological Systems. Science 325: 419-422. (1) What characteristics of resource systems are predictive of collapse? (2) What is the core argument of Hardin (1968) as summarized by Ostrom and what summary of research findings does she use to (at least partially) refute it?		Conservation Strategy Fund (CSF) video on Private vs. Public Goods.
1/23	4. Market Failures in the Environmental Realm, cont'd Video - Lecture 4 - Part 2 (29 min) Video - Lecture 4 - Part 3 (20 min) 4.5. Regression analysis - slides (quantitative tool module)	Boardman, Anthony E., David H. Greenberg, Aidan R. Vining, and David L. Weimer. 2018. Cost benefit analysis. Cambridge University Press, Cambridge, UK. We'll read just "APPENDIX 4A Introduction to Multiple Regression Analysis", pp. 102-103 1. What is linear regression? 2. How do we interpret the value of the estimated coefficients, like β₁? What does this value mean? 3. What is the prediction error, or residual? 4. What's the difference between y_i and ŷ_i?		BrainCraft/PBS video on The Prisoner's Dilemna MRU video introduction: Interpreting the Regression Line
1/24	Discussion/lab	1. Discussion of problem set #1; 2. Excel tutorial: PARTICIPATION CREDIT: before 7:45am on lab day, download and then open this Excel file and: Glance at the “Excel tutorial” tab. Read the 2-sentence Overview (top left) and familiarize yourself with the short data table at right. Read the “Read me” tab and absorb two brief important resources: Read the 2-page regression overview from Boardman et al. (2018)--also linked in the lecture just above—to solidify regression concepts. Watch the first 2 minutes of the YouTube regression tutorial—also linked here—to get a sense of how to run a regression in Excel. Complete the very easy and quick "Lab 3 - Warm up question" (on our Assignments page).
1/25	The Benefits and Costs of Environmental Protection (BCA): 5. Theoretical foundations, steps and discounting Slides Video - Lecture 5 - Part 1 (23 min)	K&O: Chp 3. (Especially later sections on benefit-cost analysis. We'll return to earlier parts of the chapter on measuring costs and benefits later.) Review K&O Chapter 2, pp. 31-34 (Discounting and Present Value) Must read/digest before class: Discounting handout US Environmental Protection Agency (EPA) (2010). Guidelines for Preparing Economic Analysis, Chapter 6: Discounting Future Benefits and Costs, EPA 240-R-10-001. --> Read only through section 6.2.2.1, also skip sections 6.1.2--6.1.4. 1. Explain in plain English in one sentence what is meant by the net present value (NPV) of a projected stream of benefits and costs. 2. What are some rationales for discounting?	Problem Set #2 assigned (due in 8 days)	This series of videos on Cost-Benefit Analysis from CSF is a great introduction to the topic. We won't cover all of these concepts but the series is definitely worth a view. See in particular the three videos on Discounting, Time Horizons and Net Present Value.
1/30	The Benefits and Costs of Environmental Protection: 5. Overview and introduction to discounting, cont'd Video - Lecture 5 - Part 2 - discounting (38 min) Video - Lecture 5 - Part 3 - discounting mechanics (16 min) {Here's the whiteboard that goes along with the video--you can comment on any component, e.g. to ask a question, using the comment tool.} Video - Lecture 5 - Part 4 - expected value (25 min)	K&O: Chapter 3		HIGHLY RECOMMENDED: Video explanations from Kahn Academy: Computing Expected Value
1/31	Discussion/lab	There are no additional materials to digest before this week's lab meeting. Once you have arrived to lab and before lab begins please: (1) Find a partner that you will work with on today’s Excel exercise. If you are inexperienced with Excel and/or regression, try to pair with someone who has more experience. (2) Download and open this quantitative exercise in Excel to one or both of your computers: QE1 - Dryville - Estimating demand & benefits for a public good.xlsx { updated 2/1/24 -- fixed incorrect "Tip" for Part 10 } (3) In the Excel ribbon for the “Data” menu, verify that you see the “Data Analysis” in the “Analyze” sub-menu. (4) Once lab has started and you have paired up with a partner for this Excel exercise, share your group/pair names here. ***If bringing your own laptop (which is fine) make sure before class that in Excel the "Solver" add-in program is loaded and available (see the Data menu ribbon, "Analyze" sub-menu). If you need help with this step see the "Read me" tab of the Excel file provided above (or just Google how to load this add-in program).
2/1	5. Overview and introduction to discounting, cont'd	K&O: Chapter 3
2/6	BCA: Measuring Benefits, Part I Slides Video - Lecture 6 - Environmental Valuation (54 min)	K&O: Chapter 3		CSF video on Classes of Value CSF video on Travel Cost Method of valuation
2/7	Discussion/lab	Discussion of problem set #2 Excel-based lab exercise, QE1 - Dryville, cont'd
2/8	BCA: Measuring Benefits, Part II Slides Video - Lecture 6 - Environmental Valuation - Part 2 (54 min)	K&O: Chapter 3
2/13	BCA: Measuring Benefits, Part II, cont'd
2/14	Discussion/lab	Review for midterm
2/15	Midterm	Bring: pencil and black or blue pen Not allowed, nor needed: calculator, scantron To give us space to spread out we will split between two rooms by last name--> A - La: Wellman 202 Le-Z: Our regular lecture room.
2/20	BCA: 7. Measuring Costs and Distributional Impacts Slides Video - Lecture 7 - Measuring Costs and Distributional Impacts (39 min) ################### Policy for market failure: 8. Policy for market failure: The goal and the means Slides Video - Lecture 8 - 8. Policy for market failure: The goal and the means (45 min)	K&O: Chapter 3 O'Donnell, Noreen. 'Environmentalists Dispute Republican Claims Over 'Job-Killing' Regulations'. NBC News (February 1, 2017). 1. How are opponents of environmental regulations characterizing their costs? 2. How do proponents of regulations counter this argument (referencing data from U.S. Bureau of Labor Statistics & the U.S. Office of Management and Budget)? ############################ K&O: Chapter 8 Costello, C., L.R. Gerber and S. Gaines. 2012. A market approach to saving the whales. Nature 481, 139-140. 1. What are the essential components of a "whale-conservation market" (in a couple sentences)? I.e. what would the authority do under this setup to implement the policy? 2. Do Costello and co-authors anticipate that "fervent anti-whalers" will agree or disagree with their approach to curbing whaling? Why/why not? How do Costello and co-authors respond to this anticipated fervent anti-whaler argument?
2/21	Discussion/lab	(A) Review questions from the midterm (B) Costello et al. (2012) PARTICIPATION CREDIT: Be prepared to discuss the Costello et al. (2012) article above. You will discuss the article in small groups of 3 people. At the end of discussion, each member will be asked to self-assess how prepared they were to discuss the ideas of the paper. Group members should hold others accountable for their self-assessment. Self-assessment ranking (1-5): 5: I read the whole paper carefully, I have a copy in front of me that I marked up with my notes, I have an initial idea of how to respond to the two questions posed under the reading when assigned, and I contributed actively and informatively to my group's discussion. (This might have included asking specific, informed questions about things I don't fully understand in the paper.) 4: I read the paper and have a copy in front of me, I contributed actively to my group's discussion 3: I scanned the paper and have the basic idea, I contributed a modest amount to my group's discussion. 2: I have the paper but haven't read it deeply. I contributed a small amount to my group's discussion. [**Or: I wasn't prepared at all but picked it up quickly and discussed critically once in discussion.] 1: I'm here! What more do you want from me?
2/22	9. Prescriptive policy--Command and control Slides Video- Lecture 9 - Prescriptive policy--Command and control (33 min)	K&O: Chapter 9, Chapter 10 There will be no live lecture lecture this day. Instead: 1. There will be optional in-person consultation time with Shujuan in our regular computer lab (TLC 2212) to complete the Dryville QE (due 2/23 by midnight). 2. The required 33 minute video Lecture 9 (linked to the left) is assigned.	Problem Set #3 assigned (due in 8 days)
2/27	10. Market based instruments--Price instruments Slides Video (42 min)	K&O: Chapter 9, Chapter 10 This four minute radio story is provided here in mp3 format for listening. Bonus: It features UC Davis ARE Professor Aaron Smith. NPR (2022) "How dairy farmers are cashing in on California's push for cleaner fuel." National Public Radio, Morning Edition, Feb. 10. 1. How is it that California's initiative to issue "pollution-reduction credits to the dairy based on how much methane it captures" might not accomplish its goal but instead provide "incentives to generate more pollution"?
2/28	Discussion/lab:	Classroom experiment: Congestion, Externalities and Congestion Pricing FOR PARTICIPATION CREDIT: attend and participate. NOTE: It is critical that you be on time to this section (to receive participation credit) since we are running a computer-based in class experiment that requires the number of participants to be fixed in the program at the beginning of class.
2/29	11. Market based instruments--Cap and trade Slides Video - Market based instruments--Cap and trade (35 min)		Problem Set #4 assigned on Friday, due in 7 days.	How to Save a Planet (2020). Cold Hard Cash for Your Greenhouse Gas. Gimlet Media (podcast), Oct. 22. (Ties into the slide on key attributes for carbon offset effectiveness.)
3/5	12. Biodiversity conservation and markets Slides Video (28 min)	Reynolds, M.D., Sullivan, B.L., Hallstein, E., Matsumoto, S., Kelling, S., Merrifield, M., Fink, D., Johnston, A., Hochachka, W.M., Bruns, N.E., Reiter, M.E., Veloz, S., Hickey, C., Elliott, N., Martin, L., Fitzpatrick, J.W., Spraycar, P., Golet, G.H., McColl, C., Low C., and Morrison, S.A. 2017. Dynamic conservation for migratory species. Science Advances, 3(8), p.e1700707. Focus on pages 1-4. 1. In seeking to conserve migratory waterbirds and shorebirds (W&S), what habitat gap were the authors trying to fill? Answer this generally (language not specific to the application) and then specifically for the application (the species and habitat involved here). 2. To implement programs for conserving migratory species (like W&S) what three main challenges do the authors highlight? 3. What main action by rice farmers do the authors highlight as having the potential to help address habitat needs for migrating W&S? 4. What is a reverse auction, how was it used here and what are the claimed advantages? 5. What does “habitat value” consist of as modeled here? 6. What criteria or algorithm did TNC select which bids to accept? Do we know ahead of time whether this will indeed be cost effective (this isn’t in the reading—it’s a critical thinking question)? 7. What observed outcomes did the authors use to evaluate the effectiveness of the program in the sense of W&S responses? What did they find?
3/6	Discussion/lab: Excel-based Quantitative Exercise Payments for ecosystem services - Habitat for migrating birds *Based on the Reynolds et al (2017) reading above	PARTICIPATION CREDIT: before 7:45am on lab day, download and then open this Excel file and: Read the “Read me” tab--make sure you're familiar with the "Concepts required". On the "Exercises" tab: Read Part 1, which starts "1. Your job is...", and Familiarize yourself with "Table 1. Data"--make sure you understand what the variables mean and what each row represents. Complete the very easy and quick "Lab 9 - Warm up question" (on our Assignments page). ----------------------------------------------------- ***If bringing your own laptop to lab (which is fine) make sure before class that in Excel the "Solver" add-in program is loaded and available (see the Data menu ribbon, "Analyze" sub-menu). If you need help with this step see the "Read me" tab of the Excel file provided above (or just Google how to load this add-in program). ----------------------------------------------------- Once you have arrived to lab and before lab begins please: (1) [Optional!] Find a partner that you will work with on today’s Excel exercise. (2) Download and open the Excel file linked above to one or both of your computers. (3) In the Excel ribbon for the “Data” menu, verify that you see the “Solver” in the “Analyze” sub-menu.
3/7	12. Biodiversity conservation and markets, cont'd (During this lecture there will be a short in-class exercise on ivory markets that will involve some participation grade extra credit.)
3/12	13. Decentralized policies, part I: Passive Policies Slides Video (30 min) 14. Decentralized policies, part II: Liability Laws Slides Video (24 min)
3/13	Discussion/lab	Discussion of problem set #3 & 4
3/14	15. Wrap up and synthesis			Handout: Synthesis of models for ESP 162 -- schematic showing connections between models and ideas from the course.
	Final	Bring: pencil and black or blue pen Not allowed, nor needed: calculator, scantron To give us space to spread out we will split between two rooms by last name--> A - M: Our regular lecture room N-Z: TLC 2218.
	Not covered this year:
	Current environmental policy events: EPA's new sulfur rule ppt pdf	US Environmental Protection Agency (2014). Control of Air Pollution from Motor Vehicles: Tier 3 Motor Vehicle Emission and Fuel Standards Final Rule: Regulatory Impact Analysis. EPA-420-R-14-005. * Just skim executive summary, pp. 1-11.
		Averill, Marylin. 2003. 'Arsenic in Drinking Water.' Kennedy School of Government Case Program, case reference no. 1680.0, ed. Jose A. Gomez-Ibanez. To obtain the PDF you will need to purchase on-line (for around $4) at: https://case.hks.harvard.edu/arsenic-in-drinking-water/ --> Click on "Add to cart" and then "Proceed to checkout". 1. Explain how arsenic typically ends up in drinking water. Why do we care about trying to control arsenic levels in drinking water (be specific)? 2. Cost-benefit analysis almost always requires making simplifying assumptions about the situation of study. The EPA's analysis of arsenic standards is no exception. Name at least two assumptions that were made. [HINTS: think about (1) parameter choices like discounting or the valuation of morbidity/mortality; (2) comprehensiveness of costs or benefits considered; (3) modeling of relationships between conditions (e.g. arsenic level) and outcomes.] 3. What was the EPA's objective? What metric were they considering when evaluating whether a policy was preferred. HINT: look in the last paragraph on page 8. If you're really motivated you'll figure out what's meant by ''satisfy(ing) the statutory requirements of section 1412(b(6) of SDWA' (Averill 2003, 8).
		This four minute radio story is provided here in mp3 format for listening: NPR (2011) "How To Put A Value On Oil Damaged Life In The Gulf." National Public Radio, Morning Edition, Nov. 11. (1) Explain the distinction this NPR story draws between the approach used to characterize damages from the Exxon Valdez spill and the BP/Deepwater Horizon spill. (2) Why is there an official effort underway to assess damages from the BP spill--what will the numbers be used for?
		Conniff, Richard (2014). Useless Creatures. New York Times, September 13. (1) What is Conniff's point when he says sardonically that 'The new revised version of Genesis now says, 'God made the wild animals according to their kinds, and he said, 'Let them be fungible.' " '? (2) When Conniff argues that "Wildlife is and should be useless" does he appear to be talking about the "total economic value" as we defined in class? Use value (direct or indirect)? Non-use value? Perrings, C., S. Baumgartner, W.A. Brock, K. Chopra, M. Conte, et al. 2009. The economics of biodiversity and ecosystem services. Chapter 17 in Biodiversity, Ecosystem Functioning, and Human Wellbeing: An Ecological and Economic Perspective, Oxford University Press, pp. 230-247. Focus on 230-242, and ignore sections 17.3 (1) Explain how biodiversity conservation meets the two criteria of a (pure) public good. What are the implications for whether we might expect this good to be over- or under-supplied by a free market? (2) What two examples are discussed for utilizing markets to incentive biodiversity conservation and how do they work (generate appropriate incentives)? What concerns of equity arise with respect to local communities? (3) We've discussed subsidies and cap and trade in class. What are these two instruments called and how do they work in a biodiversity context?