1. Welcome to ESM 204: The Economics of Environmental Management Purpose: to help you solve environmental problems; i.e., to help you solve generic group projects. Our goal is to help you see the economic dimensions of environmental problems and use that information to generate solutions.

2. Staff Prof. Christopher Costello: 4410 Bren Hall, 893-5802, costello@bren Office Hours: T 9:00-10:30; or by appt. 5 th year at Bren School, Environmental Economics, Modeling, Uncertainty and Learning. Ms. Sarani Saha, TA: 3526 Bren Hall, ssaha@bren Office Hours: Thursday 2-4, Friday 2-4 PhD student in Bren, focusing on env. econ. Plan to attend office hours! We want to get to know you!

3. Course Vitals Prerequisites: Calculus & ESM 251 or Econ 100AB 20 lectures, Tuesday & Thursday, 10:30-11:45 am 1 discussion section per week, run by Sarani We WILL NOT have section this first week. You should be familiar with Excel Solver You are expected to attend all lectures and 1 discussion per week. Workload: Above average. Expect 8-10 hours per week outside of class, on average.

4. Grading Homework Assignments.. 40% 5-6 “mini-group-projects”: may work with a partner, submit 1 copy with both names Pay attention to due dates – late assignments not graded. May not use the same partner twice. Work should be your own! Class/section participation.. 10% Midterm..20% Take-home exam distributed Feb 10, due Feb 15 Final Exam..30% (2 parts) Part 1: Take-home (distributed 3/10, due 3/15)….. 15% Part 2: In-class (March 15, 8-11 a.m.)….. 15% Cheating/plagiarism will not be tolerated.

5. Readings & Preparation Most readings available on the course web. Many only available from bren.ucsb.edu domain. No required text Several books will be used frequently Recommended only, though you may wish to buy Library has books on reserve Hartwick and Olewiler: The Economics of Natural Resource Use, 2 nd Edition (Addison-Wesley, 1998) Boardman et al: Cost-Benefit Analysis, 2 nd Ed (Prentice-Hall, 2001) Kolstad: Environmental Economics (Oxford, 2000) Lower level book: Goodstein

6. Preparation Please come to class prepared. Read the assignments listed for the day on the webpage. I will call on you in class. Please help make this an interactive experience. Questions??

7. Course Approach Hands-on, open discussion throughout Lectures designed to help solve a generic group project. Lecture Style Begin with brief overview from last class + questions. Motivate new material. I will always motivate material with a hypothetical project If I can’t think of a good use for the material in a real-world, group-project-like setting, you should not bother learning it. Cover new material, ask about readings

8. What will we cover? Course broken into 4 sections: 1. Project Evaluation: Evaluating public environmental projects and regulations (5) 2. Measuring benefits and costs (3) 3. Environmental Regulation (7) 4. Managing renewable and non-renewable resources (5)

9. Section 1: Evaluating Projects and Regulations 1.Cost effectiveness vs. cost/benefit, public goods, externalities 2.Applications: cost-effectiveness, cost- benefit, multi-objective methods 3.Efficiency & surplus; doing benefit-cost analysis; equity vs. efficiency 4.Inflation & discounting 5.Risk & uncertainty

10. Section 2: Measuring benefits and costs 1.Costs of regulation and the “benefits transfer” approach; travel cost 2.Revealed preference approaches 3.Stated preference approaches; constructed markets; experiments.

11. Section 3: Environmental Regulation 1.Regulatory options and efficiency. 2.Innovative approaches to regulation 3.Incidence of environmental regulations. 4.Spatial and temporal dimensions of environmental regulations. 5.Monitoring and enforcement. 6.Regulatory experience in developed vs. developing countries. 7.Macroeconomic issues: green accounting.

12. Section 4: Managing renewable & non-renewable resources 1.Rent, water, and common property. 2.Fishery economics. 3.Managing the fishery. 4.Forest economics & management. 5.Non-renewable resources and energy.