This course examines the operation of markets for natural resources including minerals, fossil fuels, fish, forest resources, and water. Physical processes determine natural resource abundance, and the course will introduce students to such processes. Students will learn that this link to natural processes is what sets natural resource economics apart from other fields. The course will make students familiar with economic theories of exploitation of renewable and non-renewable resources, especially the inter-temporal aspect of resource extraction and strategic issues arising from competition among a limited number of agents. Examples of the latter include strategic interaction in resource markets (oil and minerals), sharing of common fish stocks among countries, and environmental problems such as climate change. The course also deals with natural resource regulations and the implications of various regulations on economic behavior.
The course will enable students to:
Knowledge
- Use and understand simple biological models for studying fishery and forest resources, geological concepts for examining oil and minerals, and hydrological concepts for examining groundwater.
- Understand various incentive margins that affects behavior in resource extraction and resource markets, and how regulations affected them.
Skills
- Set up and solve static and dynamic optimization problems.
- Formulate, analyze and interpret economic models of resource markets and extraction analytically using differential and integral calculus.
- Formulate, analyze and interpret economic models of resource markets and extraction numerically using Excel's Solver or similar tools
General competence
- Applying economic insights to analyze real world challenges related to resource economics