ECO439 Resource Economics (E)

• Topics

  This course explains the basics of renewable and non-renewable resource exploitation and management and the relation between fossil fuel extraction and climate change. It covers open access and optimally managed fisheries, and it covers non-renewable resource extraction in the social optimum, the competitive market, and in the context of market power. The class focuses on dynamic analyses and introduces three fundamental methods commonly applied in dynamic economic analysis: Pontryagin’s maximum principle, phase diagrams, and dynamic programming.

• Learning outcome

  Upon completion of the course, the student can…

  Knowledge

  • interpret intertemporal trade-offs (Euler equation)
  • describe implications of scarcity on extraction and price and extractions paths in different settings
  • understand policy problems related to exhaustion of non-renewable resources and overutilization of renewable resources
  • explain trade-offs between fossil use and climatic change

  Skills

  • set up and solve dynamic economic models
  • examine answers to questions about resource economics
  • read and understand reports and journal articles that make use of the concepts and methods that are introduced in the course

  General competence

  • interpret optimality conditions and trade-offs.
  • reflect dynamically

• Teaching

  The lectures will be delivered as a combination of digital sessions and primarily in-person lectures. The in-person lectures will be organized into two sections, lasting two to three consecutive days.

• Required prerequisites

  The course makes use of mathematical optimization methods and microeconomic theory.

  Basic knowledge of linear algebra, optimization (including constraint optimization and shadow value), and microeconomic theory (preferences, consumer and production theory, welfare analysis, and general equilibrium).

• Credit reduction due to overlap

  Starting from the autumn semester 2017 this course cannot be combined with ENE429

• Compulsory Activity

  Six individual homework assignments during the semester.

  Four out of six are mandatory to pass in order to take the exam.

• Assessment

  Individual school exam, 3 hours, in English.

  The exam is written by pen and paper.

• Grading Scale

  A-F

• Literature

  Textbook: Selected chapters from Karp & Traeger's (2023) online book draft on Dynamic Environmental and Resource Economics. Chapters will be uploaded to Canvas.

  Journal articles: Selected papers from academic journals.

  Alternative background readings will be referenced on Canvas.

• Permitted Support Material

  One bilingual dictionary (Category I)

  All in accordance with Supplementary provisions to the Regulations for Full-time Study Programmes at the Norwegian School of Economics Ch.4 and Examination support material.