To what extent is the good or service joint? Is there a geographical limit to the jointness? Are there any congestion effects?

Analyze an Environmental Issue

Each student is required to write a paper applying the analytical techniques examined in the course to an environmental issue.


The body of the paper (excluding the abstract, appendices and references) should be approximately 3000 words in length (approximately 12 pages if using Times New Roman font at 12 points and double spacing) and the abstract no more than 150 words. Please include the word counts for the abstract and for the body of the paper (excluding abstract, appendices and references) in your submission.

Your research paper should include the following elements:

An abstract at the beginning of the paper that succinctly summarizes the issue and your proposed solution in no more than 150 words.

A brief introduction that clearly states the issue to be discussed and gives any relevant background information.
A brief review of relevant economics literature on the topic. It should be summarized in your own words and synthesized into a coherent narrative.

Competent application to your topic of appropriate analytical techniques and especially the material learned in class.
Relevant data that illuminates the problem or justifies your proposed course of action. Tables and charts can be useful presentation aids for data.

The recommended course of action and the arguments supporting that conclusion.

Supporting technical material (for example regression results, survey results, or mathematical derivations), if considered appropriate, can be placed in appendices. Such appendices are not included in the 3000 word count.

A detailed reference list including any web sites used. This list should be presented on a separate page at the end of the paper. The reference page is not included in the 3000 word count.

The chosen environmental issue is up to the student. Examples of topics examined in the past:

Houston area air, water, or land pollution problems

Mitigating harmful environmental effects of invasive species

Managing fisheries by using individual tradable quota
The Texas rigs to reefs program
The BP oil platform explosion
Use of water in a Texas river
Flint water crisis

The costs and benefits of a major project, such as the Three Gorges dam in China

World Bank development programs and the environment

Deforestation in developing countries
Environmental implications of biofuels
Resolving conflicts over public land use
Maintaining biodiversity as a conservation goal
Using contingent valuation to aid in decision making on the environment
Common law remedies for externalities

Measuring the health effects of air and water pollutants
Suggested approach

I have listed below some questions that you might ask yourself before writing your essay. Not all of these questions are likely to be relevant for your particular essay. They are meant only to get you thinking more systematically and analytically.

What is the environmental good or service that people value?

To what extent is the good or service joint? Is there a geographical limit to the jointness? Are there any congestion effects?

Is exclusion possible in this case? If not, is the source of the problem technological, legal or some other issue?

If exclusion is a problem, might there be a complementary good that is excludable that might be used as a means of charging a price?

Is it feasible to use the legal system and the assignment of property rights to deal with the issue? How might the assignment of property rights affect transactions costs and the efficiency of the outcome?

Would it be possible to design taxes, fees or marketable permits to help solve the problem? What are some of the difficult design characteristics for a fee or permit system in your particular example?

How might the EPA or other relevant government agency obtain information about the marginal benefits (or marginal damage avoided) of the proposed policy?
More generally, how might the EPA or other government agency go

about deriving the necessary information to design a fee or permit system? Are there reasons why a command and control regulation might work better in solving the problem you have identified?

Can you present any data you have found that might indicate the marginal costs or benefits of different policies for your particular example?

Are there any significant “second best” issues that arise in your example? How might the policy instruments you are considering handle them?

Are there any difficult monitoring or enforcement issues associated with the proposed policy instruments? What kinds of information or procedures might best handle these?

Do the proposed policies have any serious limitations associated with the need to trade off flexibility and predictability?

Do the proposed remedies ignore other possibly much lower cost remedies? Do the costs of improved life spans or health implicit in the policy approximately equal the values placed on these same benefits in other contexts?

Does the proposed regulation or other policy involve implicit insurance against future risks? Can those risks be evaluated objectively, and if so how does the implicit “insurance premium” compare with the costs of insuring against other comparable risks?

Can the proposed policy be viewed as a type of investment and if so how does the risk-return trade-off compare with other investments society can make?

Does the externality you are examining involve multiple governments or jurisdictions? If so, are there special problems in coordinating action and if there are how might coordination be achieved?