 The course starts out with the basics of supply and demand. What constitutes a demand curve? What constitutes a supply curve? How they interact and how their interaction creates wealth for society. And by the way to do that we have experiments where we have you act as market actors. You know there's jokes about psychologists use rats for their experiments and of course economists use freshmen because well we were going to attach to the rats. And so it'll be your turn to act as the rats and be in simulated markets where you too will have economic decisions. And so hopefully through those experiments you will understand how at least our idealized markets work and how markets create wealth. Of course many of you already partake in markets. You sell your labor. You buy various goods. You buy cars. You buy bread. You may buy stocks. You probably don't buy oil and gas commodities in the New York Mercantile Exchange but those are similar markets. The second issue we talked about which is crucial to environmental economics is how markets fail. How they fail to create the perfect market. And there are several basic market failures that we're going to talk about. The most important of which is what we call externalities but what you'll think about is pollution. I run a steel mill. I create steel which is useful in so many ways in our modern society but I also admit a lot of pollution into the air poisoning people's lungs. I emit pollution into the water killing fish harming people's water quality. I can do a lot of bad things. Another issue we'll talk about are what are called common pools. The most obvious issues of those are it involves hunting and fishing. Many of my students grow up in rural Pennsylvania and they have hunting and fishing these family traditions so they get up early in the morning and they paint themselves with deer urine or something like that and they go hide out in the woods with large guns and they're ready to shoot these poor animals who wander by on the first day of hunting season. Now everyone's taste differ. This doesn't sound like fun to me but I know lots of my students like it. On the other hand they think I'm odd when I talk about how much fun I have curling. So you know different tastes differ. But if you think about these common pool issues what are called common pools what's a common pool? Well think about this deer. Nobody owns the deer until it's dead which gives people lots of incentives to kill deer or other wildlife that are actually scarce or fish for instance. So for instance if you think about issues about saving whale habitat well nobody owns whales and so 30 years ago whales were on the verge of being extinct because the only way to own a whale was to kill it. Nowadays society has moved forward to that and we've made some progress on these issues. The third issue we'll talk about a little bit is the idea of consumer deception in environmental products. How do you know that a detergent is environmentally friendly? I of course try to get these special fish killing detergent that will maximize the number of fish killed when I do my wash. However you on the other hand may have less perverse taste and desire to have an environmentally friendly detergent. How do you know that it's really a good detergent? Do you think about that? So now we have a market and we have market failures and we look to government to solve these problems. But the problem with government is I think you know is that government is less than perfect and this all starts with voting. Have you ever wondered why you vote? It couldn't be because you think you're going to affect the election. No one ever wins an election by one vote. You know that. So why do you vote? Well we can talk about a variety of reasons but since your vote doesn't matter you don't really invest in learning about politicians. So they try to get your attention by having all kinds of highly sophisticated and yet perfectly sophisticated campaign commercials with almost no substance at all. And then when they get to office are they interested in standing up for your interest or being re-elected and appearing to look good on cameras like I'm on. Politicians specialize in looking good in cameras. Well you've watched me for a few minutes. Do you think I should be a politician? Probably not. So we talk about how governments fail and then we'll try to apply that to a variety of circumstance. In particular we'll talk about what is now called cap and trade programs. The economist solution to environmental problems where we give people rights to pollution and allow them to trade and according to our theory and according to our classroom exercise which I hope we're going to do in class. That brings about our pollution reductions at the lowest cost to society. And we'll talk about a variety of issues of how they work, how they create wealth and even sometimes about how maybe or not they're very moral. Of course I told you I'm an economist, I'm a moral, I'm not interested in morality but you as a typical human being may well be interested in morality. And finally we'll talk about energy issues. Energy issues are very big in our society. The price of oil jumps up and down. So in 1998 when I first came to Penn State the oil cost about $12 a barrel. In 1998, in 2008 it cost $140 a barrel. Now it cost about $64 a barrel, it goes up and down and all around, it has all kinds of implications for society. We'll talk about if we're running out of oil, if there are other forms of energy and what we should do if anything to address our oil and energy supply issues.