Schedule, Lecture Notes, and Readings
Each section is approximately 1-2 days of class. KO denotes readings from the Keohane and Olmstead book. Any readings without links can be obtained through the Cornell library website. Required readings for students enrolled at the 5000 level are in italics.
Introduction to environmental economics
- Lecture notes
- KO Chapters 1 and 4
- Fullerton, Don, and Robert Stavins. “How economists see the environment.” Nature 395, no. 6701 (1998): 433-434.
- Krutilla, John V. “Conservation reconsidered.” The American Economic Review 57, no. 4 (1967): 777-786.
Market failures: Public goods and externalities
- Lecture notes
- KO Chapter 5
Coase theorem
- Lecture notes
- Coase, Ronald. “The problem of social cost.” The Journal of Law and Economics 3 (1960): 1-44.
In class Coasean bargaining game
Policy: Standards
- Lecture notes
- KO Chapters 8 and 9
Taxes and Subsidies
- Lecture notes
- KO Chapters 8 and 9
Tradable permits
- Lecture notes
- Resources Radio: A Status Report on Global Emissions Trading, with Stephanie La Hoz Theuer
- KO Chapters 8 and 9, 10
- Muller, Nicholas Z., and Robert Mendelsohn. “Efficient pollution regulation: getting the prices right.” American Economic Review 99, no. 5 (2009): 1714-39.
In class emissions trading game
Policy under uncertainty
- Lecture notes
- KO Chapters 8
Distortions and second-best policies
- Lecture notes
- Holland, Stephen P., Jonathan E. Hughes, and Christopher R. Knittel. “Greenhouse gas reductions under low carbon fuel standards?.” American Economic Journal: Economic Policy 1, no. 1 (2009): 106-46.
Climate Policy and Trade: Carbon Tariffs
- Lecture notes
- Brunel, Claire, and Arik Levinson. “Carbon Tariffs 101.” NBER Working Paper No. 33024 (2024).
Econometrics review
Climate risk and financial instruments
- Lecture notes
- Giglio, Stefano, Matteo Maggiori, and Johannes Stroebel. “Very long-run discount rates.” The Quarterly Journal of Economics 130, no. 1 (2015): 1-53.” The Review of Financial Studies 34, no. 8 (2021): 3527-3571.
- Resources Radio: Pricing Climate Risk in the Markets, with Robert Litterman
- Schlenker, Wolfram, and Charles A. Taylor. “Market expectations of a warming climate.” Journal of Financial Economics 142, no. 2 (2021): 627-640.
- Painter, Marcus. “An inconvenient cost: The effects of climate change on municipal bonds.” Journal of Financial Economics 135, no. 2 (2020): 468-482.
In class hedonics game
The environment and real estate markets
- Lecture notes
- Greenstone, Michael, and Justin Gallagher. “Does hazardous waste matter? Evidence from the housing market and the superfund program.” The Quarterly Journal of Economics 123, no. 3 (2008): 951-1003.
- Bernstein, Asaf, Matthew T. Gustafson, and Ryan Lewis. “Disaster on the horizon: The price effect of sea level rise.” Journal of Financial Economics 134, no. 2 (2019): 253-272.
Non-market valuation: Travel cost
Non-market valuation: Contingent valuation
- Lecture notes
- Krupnick, Alan J., and Juha Siikamäki. “How people value what nature provides.” Resources 50 (2007): 1-14.
Offset markets
- Lecture notes
- Aldy, Joseph E., and Zachery Halem. “The Evolving Role of Greenhouse Gas Emission Offsets in Combating Climate Change.” (2022).
- Calel, Raphael, Jonathan Colmer, Antoine Dechezleprêtre, and Matthieu Glachant. “Do carbon offsets offset carbon?” (2021).
Green instruments
- Flammer, Caroline. “Green bonds: effectiveness and implications for public policy.” Environmental and Energy Policy and the Economy 1, no. 1 (2020): 95-128.
- Baker, Malcolm, Daniel Bergstresser, George Serafeim, and Jeffrey Wurgler. “Financing the response to climate change: The pricing and ownership of US green bonds.” (2018).