EC3384: Resource and Energy Economics I
AY2013/2014, Semester 2, Lecturer: Joost Buurman
Course Coverage:
1. Resource Classification
2. Property Rights
3. Static & Dynamic Efficiency
4. Energy
5. Recyclable Resources
6. Water
7. Land
8. Food Security
9. Forests
10. Fisheries
11. Energy Modeling
12. Oil & Gas
13. Energy & Consumer Behaviour
There are two parts to this module, resources and energy, which are different yet intertwined in such ways that make them inseparable. Resource refers to the natural endowment of the Earth, which can be converted into materials or energy for human use and then be recycled or becomes part of nature in a different form. The first lecture will link physics, environment and economics to demonstrate the life cycle of resources. They are also classified into categories according to depletable resources, renewable flow resources and renewable but exhaustible stock resources.
Next, property rights are introduced. Well-established property rights have three prominent features: exclusivity, transferability and enforceability. The presence of these three properties ensure that market equilibrium can be achieved easily once the property right is allocated in accordance to Coase Theorem. However, most of the resources on Earth do not have efficient property rights, leading to over or underextraction of resources. Mathematical tools are also introduced to analyze the static and dynamic equilibrium of the resource market. Two important criteria in resource economics are efficiency criteria, which ensures that extraction or harvesting of the resource maximizes the utility of society; and the sustainability criterion, which ensures that the next generation will not be left worse off than the current generation.
Energy market focus on the extraction of different resources for electron and mobility diet. Energy poverty and various energy sources will also be discuss. Depletable fuels include coal, oil, natural gas and nuclear power whereas renewable fuels include hydropower, solar energy, wind turbines and tidal-powered generators. Costs and benefits of each of these resources will be covered. However, reading the textbook will help because it actually provides a lot more case studies and content then what the lecturer can cover, hence it is very beneficial to your understanding of each and every one of the resources. Recyclable resources is a relatively smaller topic, but could be tested for midterm test because there's not much content on the whole by mid-semester.
Water is a renewable but exhaustible physical stock resource, because water that are fit for human consumption are actually very limited in certain areas due to geographical reasons. Thus, there are a lot to be discussed or water pricing, and whether it is necessary that water supply is nationalize by governments to ensure basic survival needs. There are also some issues worth debating, for example whether nationalization or targeted water subsidies is a better policy for the economy etc. Land is also a very interesting topic covering allocation and development distribution of land, as well as the effectiveness of zoning system in land allocation or whether planned allocation of land may lead to sever distortion of market forces etc. Food security is a topic that combines knowledge from energy, water and land because all are necessary in food production. Then there is the global scarcity hypothesis, with a strong version that argues for inadequate food production and a weak version that argues that distribution is the main problem behind food scarcity. Supply shocks and commodity futures are also interesting subtopics that were discussed.
The last two resource topics are on renewable but exhaustible biological resources: forests and fisheries. These two topics are more mathematical then the previous topics, with bioeconomic model based on growth models of these resources. Trees generally takes years to age, and planting cycles are often modeled to maximized harvesting and sustainability, and fishes faced overfishing as a result of open-access resource pool, especially in capture fisheries. Qualitatively, there is extensive discussion on government policies and the enforcability of such policies, as well as long term solution that are essential in preserving forests and fish species that are intrinsically valuable.
Energy modeling returns us to the topics in energy market, with guest lectures on modeling energy costs using life cycle analysis to value the environment impacts. Oil and gas market were also discussed more extensively, such as the supply-side and demand-side factors on persisting high fossil fuel prices. The last chapter on consumer behaviour examined the psychological factors for behavioural bias and rebound effect, which summarizes to why humans to behave rationally.
Overall, this is a very content heavy module, and has the least mathematics among all the economics modules I have taken thus far. Only about 30% of the module deals with mathematics, which examines growth models of biological resources. The rest are qualitative discussion on socio-economic issues behind economic policies on conservation and extraction of resources. Reading is important, at least read the textbook, because each of the resources have very unique properties and hence there is no one-size-fit-all equations, models or studying methods.
Workload: Heavy
Difficulty: Moderate
Grade: A-
Course Coverage:
1. Resource Classification
2. Property Rights
3. Static & Dynamic Efficiency
4. Energy
5. Recyclable Resources
6. Water
7. Land
8. Food Security
9. Forests
10. Fisheries
11. Energy Modeling
12. Oil & Gas
13. Energy & Consumer Behaviour
There are two parts to this module, resources and energy, which are different yet intertwined in such ways that make them inseparable. Resource refers to the natural endowment of the Earth, which can be converted into materials or energy for human use and then be recycled or becomes part of nature in a different form. The first lecture will link physics, environment and economics to demonstrate the life cycle of resources. They are also classified into categories according to depletable resources, renewable flow resources and renewable but exhaustible stock resources.
Next, property rights are introduced. Well-established property rights have three prominent features: exclusivity, transferability and enforceability. The presence of these three properties ensure that market equilibrium can be achieved easily once the property right is allocated in accordance to Coase Theorem. However, most of the resources on Earth do not have efficient property rights, leading to over or underextraction of resources. Mathematical tools are also introduced to analyze the static and dynamic equilibrium of the resource market. Two important criteria in resource economics are efficiency criteria, which ensures that extraction or harvesting of the resource maximizes the utility of society; and the sustainability criterion, which ensures that the next generation will not be left worse off than the current generation.
Energy market focus on the extraction of different resources for electron and mobility diet. Energy poverty and various energy sources will also be discuss. Depletable fuels include coal, oil, natural gas and nuclear power whereas renewable fuels include hydropower, solar energy, wind turbines and tidal-powered generators. Costs and benefits of each of these resources will be covered. However, reading the textbook will help because it actually provides a lot more case studies and content then what the lecturer can cover, hence it is very beneficial to your understanding of each and every one of the resources. Recyclable resources is a relatively smaller topic, but could be tested for midterm test because there's not much content on the whole by mid-semester.
Water is a renewable but exhaustible physical stock resource, because water that are fit for human consumption are actually very limited in certain areas due to geographical reasons. Thus, there are a lot to be discussed or water pricing, and whether it is necessary that water supply is nationalize by governments to ensure basic survival needs. There are also some issues worth debating, for example whether nationalization or targeted water subsidies is a better policy for the economy etc. Land is also a very interesting topic covering allocation and development distribution of land, as well as the effectiveness of zoning system in land allocation or whether planned allocation of land may lead to sever distortion of market forces etc. Food security is a topic that combines knowledge from energy, water and land because all are necessary in food production. Then there is the global scarcity hypothesis, with a strong version that argues for inadequate food production and a weak version that argues that distribution is the main problem behind food scarcity. Supply shocks and commodity futures are also interesting subtopics that were discussed.
The last two resource topics are on renewable but exhaustible biological resources: forests and fisheries. These two topics are more mathematical then the previous topics, with bioeconomic model based on growth models of these resources. Trees generally takes years to age, and planting cycles are often modeled to maximized harvesting and sustainability, and fishes faced overfishing as a result of open-access resource pool, especially in capture fisheries. Qualitatively, there is extensive discussion on government policies and the enforcability of such policies, as well as long term solution that are essential in preserving forests and fish species that are intrinsically valuable.
Energy modeling returns us to the topics in energy market, with guest lectures on modeling energy costs using life cycle analysis to value the environment impacts. Oil and gas market were also discussed more extensively, such as the supply-side and demand-side factors on persisting high fossil fuel prices. The last chapter on consumer behaviour examined the psychological factors for behavioural bias and rebound effect, which summarizes to why humans to behave rationally.
Overall, this is a very content heavy module, and has the least mathematics among all the economics modules I have taken thus far. Only about 30% of the module deals with mathematics, which examines growth models of biological resources. The rest are qualitative discussion on socio-economic issues behind economic policies on conservation and extraction of resources. Reading is important, at least read the textbook, because each of the resources have very unique properties and hence there is no one-size-fit-all equations, models or studying methods.
Workload: Heavy
Difficulty: Moderate
Grade: A-