Course Introduction

This course is concerned with the relationship between economic activity and the natural environment. We begin with the question of whether or not an unregulated economy will tend to produce more pollution than is consistent with economic efficiency. Various policies used to improve on the unregulated outcome, such as standards, taxes, subsidies and tradeable permits are examined. The specific problems that arise when dealing with hazardous waste are considered, and the existing distribution of hazardous pollutants across different subgroups of the US population is discussed from the perspective of environmental justice. The issue of valuing non-market benefits of pollution abatement, which is a necessary step in determining the appropriate level of pollution, is addressed. The relationship between poverty, population growth, economic development, and the environment is examined. The optimal rate at which renewable and non-renewable natural resources should be extracted, and whether or not commonly owned natural resources are indeed extracted at an optimal rate is investigated. The course concludes with a discussion of global environmental issues: ozone depletion, global warming, and the preservation of biodiversity.