Econ159syllabus_spr15 - Economics

Lawrence H. Goulder
Michael Wara
Stanford University
Spring Quarter 2014-15
Economics 159 / Law 746
Course Focus:
This course will advance students' understanding of economic, legal, and political
approaches to avoiding or managing the problem of global climate change. It will focus on
economic issues, legal constraints, and the political economy of various emissions-reduction
strategies. The course will consider policy efforts at the local, national, and international levels.
Theoretical contributions as well as empirical analyses will be considered. Specific topics
include: interactions among overlapping climate policies and between new policies and preexisting legal or regulatory frameworks; the role that jurisdictional or geographic scale can play
in influencing the performance of climate policy approaches; and numerical modeling and
statistical analyses of climate change policies.
Class Meetings:
Classes meet Mondays and Wednesdays 9:00-10:50 in Room 285 of the Law School.
The principal instructors are:
Lawrence H. Goulder
Department of Economics, Landau Economics Building Room 328
phone: 723-3706
email: [email protected]
office hours: Wednesdays 3:00-4:00 or by appt.
Michael Wara
Stanford Law School, Neukom Room 345
phone: 725-5306
email: [email protected]
office hours: Tuesdays 1:30-4:00 or by appt.
Prerequisites, Course Requirements and Grading:
Grades will be based on class participation and performance on the final exam. Students
may take the course pass-fail.
The readings listed below are required. Ideally, they should be completed prior to the
lectures with which they are listed. The readings are available on Coursework. There is no
required textbook for the course, although selections from some textbooks are included below.
I. Introduction and Background
M 3/31 Introduction (Goulder and Wara)
Intergovernmental Panel on Climate Change, Summary for Policymakers, 2014.
Justin Gilles, “U.N. Panel Issues Its Starkest Warning Yet on Global Warming.” The
New York Times November 2, 2014.
Massachusetts et al. v. E.P.A. et al., 549 U.S. 497 (2007).
Office of the Press Secretary, The White House, Fact Sheet: U.S.-China Joint
Announcement on Climate Change and Clean Energy Cooperation, November 11, 2014,
W 4/1
Background on Climate Science
Guest Speaker: Richard Muller, Founder and Scientific Director, Berkeley Earth, also
Professor of Physics at U.C. Berkeley and Faculty Senior Scientist at Lawrence Berkeley
Robert Rohde, Richard A. Muller, et al. (2013) A New Estimate of the Average Earth
Surface Land Temperature Spanning 1753 to 2011. Geoinfor Geostat: An Overview 1:1..
M 4/6
Externalities and Market Failure (Goulder and Wara)
Alternative Policy Instruments
Goulder, Lawrence. “Emissions Taxes vs. Allowances vs. Technology Mandates.”
Notes prepared for Economics 159, March 2015.
Goulder, Lawrence, and Andrew Schein. “Carbon Taxes vs. Cap and Trade: A Critical
Review.” Climate Change Economics 4(3), August 2013.
Bruce A. Ackerman and Richard B. Stewart, Reforming Environmental Law, 37 Stanford
Law Review, 1333 (1985).
Richard Conniff, The Political History of Cap and Trade, Smithsonian Magazine, August
2009, at
II. US Federal-Level Climate-Change Policy
W 4/8
Economics of Federal Approaches to Greenhouse Gas Regulation (Goulder)
Fowlie, Meredith et al. “An Economic Perspective on the EPA’s Clean Power Plan.”
Science November 14, 2014.
Risky Business Project, Risky Business: The Economic Risks of Climate Change in the
United States: A Climate Risk Assessment for the United States (June 2014).
Goulder, Lawrence H., Marc A. C. Hafstead and Michaesl Dworsky), ”Impacts of
Alternative Allowance Allocation Methods under a Federal Cap-and-Trade System.”
Journal of Environmental Economics and Management 59, 2010.
Parry, Ian, Chandara Veung, and Dirk Heine, “How Much Carbon Pricing Is in
Countries’ Own Interests? The Critical Role of Co-Benefits” IMF Working Paper
WP/14/174, September 2014.
M 4/13 Federal Approaches to Climate Policy: Congressional Perspectives
Guest Speaker: Phil Barnett, Former Democratic Staff Director, Committee on Energy
and Commerce, U.S. House of Representatives.
W 4/15 Uncertainty and the Social Cost of Carbon (Goulder)
Interagency Working Group on the Social Cost of Carbon, Technical Support Document
– Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis – Under
Executive Order 12866 (Nov. 2013).
Goulder, Lawrence. “Climate Policy Decision Making under Uncertainty.” Notes
prepared for Economics 159, March 2014.
Revesz, Richard, Kenneth Arrow, Peter Howard, Robert Kopp, Michael Livermore,
Michael Oppenheimer, and Thomas Sterner, “Global Warming: Improve Economic
Models of Climate Change” Nature, April 4, 2014.
M 4/20 Federal Regulation of Power Plants under the Clean Air Act (Wara)
American Electric Power Company v. Connecticut, 564 U.S. ___ (2011).
Utility Air Regulatory Group v. EPA, 573 U.S. ___ (2014).
42 U.S.C. Sec 7411.
Environmental Protection Agency, Carbon Pollution Emission Guidelines for Existing
Stationary Sources: Electric Utility Generating Units, 79 Fed. Reg. 34830, 34832-34841,
(June 18, 2014).
W 4/22 Electric Utility Perspectives on Federal and State Climate Policy
Guest Speaker: David Crane, CEO of NRG Energy, Inc.
III. Sub-National Climate-Change Policy
M 4/27 Conservative Approaches to U.S. Climate Policy
Guest Speaker: Bob Inglis, Executive Director, Energy and Enterprise Initiative,
George Mason University, former Member, U.S. House of Representatives (R-NC).
W 4/29 An EPA Perspective on Federal and State Regulation of GHG Emissions
Guest Speaker: Bob Perciasepe, President, Center for Climate and Energy Solutions.
M 5/4
State-Level Policies Aimed at Limiting GHG Emissions (Goulder and Wara)
Barry G. Rabe, States on Steroids: The Intergovernmental Odyssey of American Climate
Policy, 25 Review of Policy Research 2, 105 (2008).
Center for Climate and Energy Solutions. “California Cap-and-Trade Program
Summary,” January 2014.
Borenstein, Severin, James Bushnell, Frank A. Wolak, and Matthew Zaragoza-Watkins,
“Expecting the Unexpected: Emissions Uncertainty and Environmental Market Design.”
Working paper, University of California, Berkeley, January 2014.
Rocky Mountain Farmers Union v. Corey, 730 F.3d 1070 (2013, 9th Cir.).
W 5/6
Economics of Complementary Policies; Offsets; Jurisdictional Linkage (Goulder and
Goulder, Lawrence H., and Robert N. Stavins, “Interactions between State and Federal
Climate Change Policies.” In Don Fullerton and Catherine Wolfram, eds., The Design
and Implementation of U.s. Climate Policy. Cambridge, Mass.: National Bureau of
Economic Research, 2012.
Michael Wara, California’s Energy and Climate Policy: A Full Plate but Perhaps not a
Model Policy, 70 Bulletin of the Atomic Scientists, 26 (Sep. 2014).
M 5/11 California’s Climate Policy to 2030
Guest Speaker: Ken Alex, Senior Policy Advisor to Gov. Jerry Brown and Director,
California Office of Planning and Research
IV. International Climate-Change Policy
W 5/13 Law and Policy of Offsets, Leakage, and Linkage (Wara)
Michael Wara, Measuring the Clean Development Mechanism’s Performance and
Potential, 55 UCLA Law Review, 1759 (2008).
Danny Cullenward, How California’s Carbon Market Actually Works, 70 Bulletin of the
Atomic Scientists, 35 (Sep. 2014).
American Insurance Association v. Garamendi, 539 U.S. 396 (2003).
M 5/18 International Climate Negotiations as a Strategic Game (Wara and Goulder)
Robert Keohane, After Hegemony, Ch. 5 and 6 (1984).
Scott Barrett, Environment and Statecraft, 359-406 (2006).
Kyoto Protocol to the United Nations Framework Convention on Climate Change, Dec.
10, 1997, 37 I.L.M. 22.
W 5/20 Legal and Political History of International Climate Negotiations; Prospects for
December Paris Meeting (Wara and Goulder)
Dan Bodansky, Bonn Voyage: Kyoto’s Uncertain Revival, 65 National Interest, 45 (Fall
Todd Stern, U.S. Special Envoy for Climate Change, The Shape of a New International
Climate Agreement, Remarks delivered at Chatham House, London, 22 October 2013.
UNFCCC, Establishment of an Ad Hoc Working Group on the Durban Platform for
Enhanced Action, Decision 1/CP.17 in Report of the Conference of the Parties on its
Seventeenth Session, held in Durban from 28 November to 11 December 2011,
UNFCCC, Lima Call for Climate Action, Decision 1/CP.20 in Report of the Conference
of the Parties on its Seventeenth Session, held in Lima from 1 to 14 December 2014,
F 5/22 (no meeting )
M 5/25 (Memorial Day – no meeting)
W 5/27 Congress’s Role in US Domestic and International Climate Policy
Guest Speaker: Sheldon Whitehouse, US Senator from Rhode Island.
V. Conclusions
F 5/29 Wrap Up (Goulder and Wara)