Department of Economics & International Development, Unit Catalogue 2007/08 |
EC30028 Natural resource and energy economics |
| Credits: 6 |
| Level: Honours |
| Semester: 1 |
| Assessment: EX 100% |
| Requisites: |
| Before taking this unit you must take EC20010 and take EC20011 |
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Aims: The objective of this unit is to provide an overview of the modern theory of natural resource use, with reference to empirical evidence and with applications to contemporary issues in natural resource management. The theory of resource use is based on principles of dynamic optimisation and an introduction to the appropriate techniques is provided; however, emphasis is placed on the economic interpretation of the results rather than on formal proofs. The unit can be taken in conjunction with EC30029 Environmental Economics in Semester 2 to form a stream in environmental and natural resource economics, but the units can also be taken independently of each other.
Learning Outcomes: By the end of this unit, students should be able to: * provide an account of the principles of efficient natural resource use over time; * explain why observed patterns of natural resource use are often inefficient; * examine some key current problems in natural resource use and management, including biodiversity and fossil fuel depletion; * show the relationship of natural resource depletion to sustainable development, including discussion of the role of technical innovation. Skills: * Ability to enter into a critical debate on topics covered in the unit. The following are facilitated and assessed: abstract reasoning; information synthesis; diagrammatic skills; writing skills; numeracy skills. Content: The topics covered are: * the classification of natural resources and basic empirical estimates of resource stocks; * a primer on techniques of dynamic optimisation, illustrated with the Hotelling model of optimal resource depletion; * extending the Hotelling model: the efficient use of biological resources, illustrated with fisheries and forests; * management issues for biological resources: using game theory to understand property rights regimes and the 'tragedy of the commons'; * extinction and biodiversity; * the basic Hotelling model revisited and elaborated: the efficient depletion of extractive resources, illustrated with fossil fuels and other minerals; * futures and contingencies in extractive resource markets; * the functioning of markets for extractive resources: monopolistic and oligopolistic resource industry models; speculation in extractive resource markets; * innovation and backstop technologies, with particular reference to the evolution of energy resources and markets: 'clean' fossil fuel technologies and 'renewable' energy sources; * natural resources and sustainable development: the Hartwick model; natural resources and the theory of economic growth; estimating the 'natural resource drag' on economic growth. Texts: J Hartwick and N Olewiler The Economics of Natural Resource Use (recommended key text) P Neher Natural Resource Economics: Conservation and Exploitation C Clark and J Conrad Natural Resource Economics: Notes and Problems P Dasgupta and G Heal Economic Theory and Exhaustible Resources P Dasgupta The Control of Resources G Cornelis and G Van Kooten The Economics of Nature: Managing Biological Assets. |