Semester Offering: January

The main objective of the course is to introduce the concepts and tools used by economists in the context of natural resource and environmental development, and show how to analyze problems associated with various types of natural resources using those concepts and tools. The course is designed to serve students coming from different academic background and with limited prior exposure to economic theories and natural resource management.


Upon completion of the course, the students will be able to:
    1. Analyze natural resource issues using the concepts of economic efficiency, equity, and sustainability;
    2. Describe the different types of valuation techniques applied to assessing natural resources;
    3. Evaluate allocations of important natural resources; water, forest, and land, and propose policy instruments to correct market failures;
    4. Apply the principles of benefit-cost analysis for the analysis of long-term projects or policies;


  •     None.
  •     ED76.19 is not a pre-requisite.
  •     Those who already took ED76.19 are not supposed to take this course.


I.  Introduction to Natural Resources Economics
      1.  Important issues in natural resources economics
      2.  Natural resource adequacy: issues and innovations

II. Market Principles and Tools
      1.  Willingness to pay and demand
      2.  Marginal cost and supply
      3.  Common goods and public goods
      4.  Time discounting in natural resource use
      5.  Technological innovations in natural resources production

III. Allocation of Natural Resources
      1.  Socially efficient allocation
      2.  Dynamic efficiency and user costs
      3.  Externalities and Pigouvian tax

IV. Values of Natural Resources
      1. Types of values of natural resources
      2. Valuation of market and non-market natural resources
      3. Benefit-cost analysis for natural resources

V. Application to Specific Natural Resources Topics




1. Daly, H.E., Farley, J., 2010. Ecological economics: principles and applications. Island Press, Washington D.C.
2. Tietenberg, T., Lewis, L., 2009. Environmental & Natural Resource Economics, 8th ed. Pearson - Addison Wesley, Boston


1. Hanley, N., Barbier, E.B., 2009. Pricing nature: Cost-benefit analysis and environmental policy. Edward Elgar Publishing.
2. Griffin, R.C., 2006. Water resource economics: the analysis of scarcity, policies and projects. MIT Press Cambridge, Cambridge (USA).


1. Ecological Economics [Elsevier]
2. Environment and Development Economics [Cambridge Univ. Press]
3. Journal of Environmental Economics and Management [Elsevier]


Lecture: 30 hours
Presentation: 2-4 hours
Self-study and assignments: 80-90 hours


Lectures in hybrid classroom, readings, discussions, mini presentation.


The mid-term and final exams carry 35 and 45% weight respectively, while the presentation carries 20% of the grade. Grade “A” will be awarded if a student can demonstrate thorough knowledge and mastery of concepts and techniques and understanding of subject matter with high degree of skill to relate them with real world examples. Grade “B” will be awarded if a student can demonstrate good knowledge and mastery of concepts and understanding of subject matter with good skill of relating them with real work cases. Grade “C” will be given if a student can demonstrate some knowledge of the concepts and understanding but lacks skill of relating them with real world cases. Grade “D” will be given if a student has poor understanding of concepts and techniques with no or little skill to relate with real world cases. Grade “F” will be given if student demonstrates very poor and limited knowledge and understanding of concepts and lacks the skill to relate with real world cases.