Welcome to APEC 3611w: Environmental and Natural Resource Economics!
Location: Ruttan Hall B25 (preferred) or online via Zoom (contact me to get link)
Timing: Monday/Wednesday/Friday, 10:40 to 11:30 am CT, from January 21, 2026 to May 4, 2026.
Syllabus: syllabus.html
Textbook: Markets and the Environment
Google drive (email me if you need access).
Video playlist for all lectures: https://www.youtube.com/playlist?list=PLir2vw2cQ_NuDtFiwNyQiU_WX_lTWYpUH
Part 01. Global Context
Chapter 01. Introduction
Environmental and Natural Resource Economics in a Global Framing
Lecture Page: Introduction
Readings: None
Chapter 02. The Doughnut
Macroeconomic Boundaries and a conceptual framework that combines environmental and economic indicators
Lecture Page: The Doughnut
Readings: Doughnut Economics (Optional) Chapter 1 in Doughnut Economics
Part 02. Micro Foundations
Chapter 03. The Microfilling
Microeconomic Decision-making
Lecture Page: The Microfilling
Readings: None, but optional Chapter 1 in textbook (Microeconomics and the Environment).
Chapter 04. Supply, Demand and Equilibrium
The power of equilibrium and Micro-Macro Synthesis
Lecture Page: Supply, Demand and Equilibrium
Readings: Chapter 4 in textbook (optional)
Chapter 05. Surplus and Welfare in Equilibrium
Why Economists think they are Good
Lecture Page: Surplus and Welfare in Equilibrium
Readings: None.
Chapter 06. Optimal Pollution
A contradiction?
Lecture Page: Optimal Pollution
Readings: Chapter 2 in textbook.
Video 06, Slides 06a, Slides 06b
Part 03. Market Failure
Chapter 07. Market Failures and Public Goods
Why we can’t have nice things
Lecture Page: Market Failures and Public Goods
Readings: Chapter 5, Intro and Public Goods sections
Chapter 08. Externalities
Spillovers and how to manage them
Lecture Page: Externalities
Readings: Chapter 5, Externalities section
Chapter 09. Commons
Always a Tragedy?
Lecture Page: Commons
Readings: Chapter 5, Commons section
Part 04. Macro Goals
Chapter 10. The Whole Economy
Readings: None
Growth and Limits to Growth
Lecture Page: The Whole Economy
Readings: None
Chapter 11. Sustainable Development
The Sustainability Paradox and Kuznets Curve
Lecture Page: Sustainable Development
Readings: None.
Chapter 12. GDP and Discounting
Does development improve the environment?
Lecture Page: GDP and Discounting
Readings: None
Chapter 13. Inclusive Wealth
A better metric?
Lecture Page: Inclusive Wealth
Readings: None
Chapter 14. Renewable Resources: Fish
Renewable resources and the tragedy of the commons
Lecture Page: Renewable Resources: Fish
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Part 05. Climate Change
Chapter 15. Climate Change
The ultimate externality
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Chapter 17. Climate IAMs
DICE and Climate Skepticism
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Chapter 18. Air Pollution
Spillovers in the air
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Chapter 19. Water Pollution
Spillovers on the ground
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Exams
Midterm Exam
3/6/2026
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Part 06. Natural Resources
Chapter 20. Non-renewables
Will we run out?
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Chapter 21. Will we run out?
How much should we extract?
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Chapter 22. Fisheries
Renewable resources 1
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Chapter 23. Forestry
Renewable resources 2
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Chapter 24. Land as a resource
The forgotten input
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Chapter 25. Land-use change
Tools to predict where nature is at risk
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Part 07. Natural Capital
Chapter 26. Ecosystem Services
Return to the Micro-Macro relationship
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Chapter 27. Valuing Nature
Bottom-up methods for putting a monetary value on nature
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Chapter 28. Biodiversity
Species protection and the fundamental source of value
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Chapter 29. GIS and Carbon
Introduction and context
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Chapter 30. Sediment Retention
Methods and specific services
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Chapter 31. Ecosystem Tradeoffs
More services and policy directions
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Part 08. Future Scenarios
Chapter 32. Uncertainty
Risk, Uncertainty and Tipping Points
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Chapter 33. Possible Futures
Shared socio-economic pathways
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Chapter 34. Positive Visions
Nature Futures Framework
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Part 09. Policy Options
Chapter 35. Policy Analysis
Designing policies for earth-economy systems
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Market-based Policies
Micro-level optimization
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Chapter 37. Real World Policies
Quotas, Trading and Taxes
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Part 10. Earth Economy Modeling
Chapter 38. Earth Economy Models
A video game for sustainability?
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Chapter 39. Gridded Models
Millions of markets
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Chapter 40. EE in Practice
GTAP-InVEST
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Conclusion
Where to go from here?
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Exams
Final Exam
8:00-10:00 AM
5/12/2026
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Planning for next year (revised schedule)
- Introduction and big picture
- Current situtation and the need for a broader view of environmental economics
- The planetary doughnut: A conceptual framework that combines environmental and economic indicators
- Human decision-making at the micro scale
- Utility, philosophy and rationality: the micfrofilling
- Supply and demand: the power of equilibrium
- Surplus and welfare: why economists think they are good
- NOTE: I included a lot on the welfare theorems, but i’m not sure i would keep them.
- Optimal pollution: A contradition? Or cost-benefit analysis
- NOTE: More emphasis on firm-differentiated pollution example. Also this felt out of order. Consider putting it betweenb 3.3 and 3.4.
- Market Failures and Solutions
- Externalities
- NOTE: The flow was bad here. in 2026, I used Market-Failures directly into Public Goods, but I think it would be better to do externalities first and then public goods as a special case of externalities.
- Public Goods
- Commons Dilemmas
- Market-based policies: emissions trading versus tax policy
- NOTE: I had almost no content here, but Jay did. Include more next year.
- Externalities
- Markets at the macroeconomic scale
- Limits to growth and controversy
- NOTE: This got disorganized because guest presentations. Reconsider the whole flow. Maybe Limits to Growth, how economies grow, and then GDP as a flawed metric (BUT EXCLUDE DISCOUNT RATE)
- Circular flow and how economies grow
- GDP as a flawed metric
- Sustainable Development
- Kuznet’s Curve
- Limits to growth and controversy
- Sustainability over time
- Discounting: Equity and decision-making over time
- Inclusive Wealth: A better metric
- Non-renewable resources: Will we run out? How much should we use.
- NOTE: Excluded this for 2026. Reconsider.
- Renewable resources: Fisheries and Forestry
- NOTE: Just did Fisheries, with second lecture focusing on Open-Access elements.
- Land as the ultimate resource
- Predicting land-use change
- Climate change
- The ultimate exxternality
- Climate integrated assessment models
- The social cost of carbon
- Natural capital
- Ecosystem services and spatial anlaysis
- Biodiversity: The cause of and solution to all of environment’s problems
- Valuing nature: bottom-up methods to put a price on the environment
- Carbon storage and spatial decisions
- Sediment retention and spatial adjacency
- Ecosystem tradeoffs: efficiency frontiers and optimal landscapes
- Future scenarios
- Uncertainty, tipping points and regime change
- Possible futures: shared socio-economic pathways
- Positive visions: we can do better.
- Earth-Economy Modelings
- What is Earth-Economy modeling?
- Gridded economic analsysis and cross-scale modeling
- Earth-Economy modeling in practice
- Conclusion: What next?