New York University 3 credits Public and Nonprofit Management and Policy
Economics—misguided market forces—is at the core of most environmental problems. Economics—guiding market forces in the right direction—is also fundamental to the solution. In this course we develop some of the fundamental economic tools for environmental policy analysis and management: Economics 101 applied to environmental problems—often, though not exclusively, focused on climate change. We will also go well beyond that initial Econ 101 take, narrowly defined. In fact, focusing exclusively on Econ 101 may sometimes be positively misleading. For example, Econ 101 traditionally tells us to price each ton of carbon dioxide (CO2) emitted into the atmosphere, and to get out of the way. Markets will take of the rest. Not so fast. Econ 102 tells us that not only is there a negative carbon spillover of economic activity, but also a positive learning-by-doing one. Installing the first rooftop solar panel is costly. The one hundredth is already cheaper. The millionth is a breeze. That goes for any individual roofer. It also goes for entire countries, and it is at the heart of policies from California’s Solar Initiative (formerly, its Million Solar Roofs Initiative) to Germany’s Energiewende (energy transition). Then there’s Political Economy 101. Shouting “carbon tax” all day long will not make it so. In fact, subsidizing clean technologies may even be a necessary step to get a price on CO2 passed in the first place. We will discuss this and similar examples, applying Econ 101 (and 102) to the real world, keeping Political Economy 101—and real-world politics—in mind every step along the way.
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