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SUS 7400C Economics of Sustainability

Sustainability in the Urban Environment

SUS 7400C Economics of Sustainability

Spring 2018. Subject to refinement/updating.

Instructor: Charles Taylor
Schedule: Tuesday 5:00 p.m. to 7:40 p.m.
Location: NAC 4-209
3 credits 3 hours/week


Charles Taylor


Economics is used to study the incentives and tradeoffs associated with environmental protection. Government's possible and actual role in protecting the environment is explored. Are the goals of economic development and sustainability at odds with one another? This course introduces students to the major theories and applications in environmental economics.


  • Be able to explain the key economic arguments for and against choices of policy instruments
  • Be able to apply quantitative analysis to answer real-world environmental policy questions
  • Be well-versed in the conceptual linkages between the environment, the micro- and macro- economy, and globalization

Course Requirements

Course Policies:

  • You may appeal your grade to a graded component of the course up to one week after it has been returned to you. You must submit, in writing, a detailed explanation why you should have been awarded credit for your answers, along with your original work. The Instructor reserves the right to review the entire graded component and the outcome of your appeal could be either no change, grade increase, or grade decrease.
  • In general, no make-up exams will be held and no extensions will be provided. If you have religious observances during the scheduled grading events of this course, please let the Instructor know during the first week of class. In case of a medical or personal emergency you are asked to alert the Instructor as soon as conveniently possible and provide proof. Exceptions are provided on a case-by-case basis.

In-Class Assignments and Participation:

  • Regular attendance is essential and expected. Since we meet weekly, missing one session would be equivalent to missing several lectures' worth of content. You have one unexcused absence for the course; each subsequent absence will affect your participation grade.
  • During each class, you will be asked to participate in in-class assignments, discussions, debates, and other activities.

Group Project Presentation and Paper: We will be discussing a variety of environmental problems. You are to use economic tools we learn in this course to analyze an environmental policy issue; groups will be formed or assigned based on mutual interest. Your work will culminate in the Group Presentation and the Group Paper. In the final paper, you will refine your work based on comments received from the Group Presentation. This hopefully will help you think about your Capstone Project.

Required Reading

There is no required course textbook.

Suggested Readings

R. Preston McAfee, Introduction to Economic Analysis, 2006 (available online)
Openstax, Principles of Economics, Rice University, 2017 (available online)
Robert N. Stavins, Ed., Economics of the Environment, 6th. ed., WW Norton, 2012.
David A. Anderson, Environmental Economics and Natural Resource Management, 4th ed., Routledge, 2013.
Richard Heinberg and Daniel Lerch (eds.), The Post Carbon Reader, Watershed, 2010.
Herman E. Daly, Ecological Economics and Sustainable Development, Edward Elgar, 2007.
Geoffrey Heal, Endangered Economies, Columbia University Press, 2016.
Jeffrey Sachs, Age of Sustainable Development, Columbia University Press, 2015.


You will be evaluated based on the following course components. No extra credit will be provided.

10% - In-Class Assignments and Participation
20% - Group Project Presentation
20% - Group Project Paper
20% - Exam I, covering material up to and including March 6's lecture
30% - Exam II, cumulative

Course Outline

Important Dates:

Group Project Idea Note Tuesday, March 6, 2018
Exam I Tuesday, March 13, 2018
Exam II Tuesday, May 22, 2018
Group Presentation Tuesday, May 8 and May 15, 2018
Group Project Paper due Friday, May 25, 2018

Tentative Schedule (subject to change)

1/30 - Introductions

  • Course overview

  • Introduction to Sustainable Development

For next class:
McAfee Ch 1, 2
Stavins Ch 1, 28
Daly, Economics in a Full World, 2005 (article)

2/6 – Microeconomic Basics - I

  •  What is Microeconomics

  •  Supply and Demand

  •  Markets and Competitive Equilibrium

For next class:
Principles of Economics, Openstax, Ch 6, 7, 8
McAfee Ch 5.1

2/13 – Microeconomic Basics - II

  • Elasticity
  • Consumer Theory

2/20 – Holiday

For next class:
McAfee Ch 6.1, 6.2, 6.3, 6.4
Heal Ch 1-2

2/27 – Market Failures

  • Producer Theory
  • Market Interventions
  • Externalities and Public Goods
  • Property Rights and Coase Theorem

For next class:
Stavins Ch 6, 16-18

3/6 – Environmental policy instruments

  • Concept of abatement
  • Command and Control, Taxes, and Market Permits
  • Case Study: SO2 Markets

3/13 – EXAM I

For next class:
Stavins Ch 24-27
Heal Ch 3-5
Anderson Ch 5

3/20 – Climate Change

  • Climate Change Science Background
  • Social Cost of Carbon, Discounting
  • Game Theory and Climate Change

For next class:
Harari, Sapiens, Ch 4-5
Sachs Ch 3, 11
Stavins Ch 4-5, 31

3/27 – Paths to the future

  • Humans, historically
  • Development and the Environmental Kuznets Curve
  • Future: Green and Competitive?
  • Urban Economics and Urbanization

3/30 – Group Project Outline Due


For next class:
Vitousek et al, Human Domination of Earth's Ecosystems, 1997
Steffen et al, Planetary Boundaries, 2007
Sachs Ch 6

4/10 – Planetary Boundaries

For next class:
Heal Ch 6-9
Stavins Ch 7-9
Sachs Ch 13

4/17 – Ecosystem services and natural capital

  • Major successes and major challenges
  • Professor case study

For next class:

4/24 – Agricultural Development and Food Security

  • Novel applications of remote sensing

For next class:
Hardin, Tragedy of the Commons (article)
Stavins Ch 3, 30

5/1 – Other Topics

  • Tragedy of the commons - Fisheries and international agreements
  • Behavioral Economics
  • Jumping to conclusions on climate

o Desertification debate
o Ruined Landscape Theory

5/8 and 5/15 – Group Presentations and Discussion

5/22 EXAM II