Syllabus

Econ 3391: Economics of Energy and the Environment

Gasson Hall 304
Section I: MW 9:00AM-10:15AM
Section II: MW 10:30AM-11:45AM

Instructor: Richard Sweeney
Email: sweeneri@bc.edu

Office: Maloney Hall 334
Office hours: Wednesday 3:00 - 3:50 pm

Graduate Assistant: Mary Stack
Email: stackmc@bc.edu

Course website: http://www.richard-sweeney.com/econ3391/

Overview

This course provides an introduction to the economics of energy, with an emphasis on the implications for environmental policy. Modern life is completely dependent on cheap, abundant, reliable energy. Our current energy supply is also economically inefficient and environmentally unsustainable. Over the course of the semester, we will explore how economics can help us pursue these two goals: cheap reliable energy and transitioning away from fossil fuels.

Course modules

  • Electricity Markets - Electricity systems are complicated. How can we use markets to keep the lights on at the lowest possible cost?
  • Externalities - Unpriced externalities lead the free market to be economically inefficient. How much should plants be allowed to pollute? What is the best way to reduce pollution?
  • Incidence - How much do firms pass-through cost changes onto consumers? What economic factors determines this, and how can we estimated them?
  • Subsidy Design - Pollution taxes are politically unpopular. Can we subsidize green goods instead? What are the tradeoffs between different subsidy designs?
  • Consumer Prices - Markets allocate resources using prices. But the prices consumers face for energy rarely reflect true scarcity. How can we fix consumer prices?
  • Energy Efficiency - Energy use depends not just on the short run price of energy, but also on the energy efficiency of the capital stock. Do people under-invest in energy efficiency? If so, can policy fix it?
  • Electric Vehicles - What are the economic and environmental implications of the transition to electric vehicles? How can we best foster this transition?

Prerequisites

Microeconomic Theory (ECON2201 or ECON2203) and Econometric Methods (ECON2228) are (strict) prerequisites for this course. I will assume that you remember all important concepts from both courses.

Textbook

There is no textbook for this course. The material will consist of lecture notes and academic articles which will be posted on Canvas. For those interested, I have listed several good optional text books on the resources page.

Pre-Class Required Readings

There will be one or two required readings for each class. These will be listed in the module page linked to each lecture date in the course calendar. It is essential that you complete these readings before class in order to contribute to and benefit from the discussion.

Many lectures will also have supplementary readings listed on the same page. Although these are not required, reading them will enhance your understanding of the material.

Post-Class Review

Every module page will contain a set of conceptual questions to think about and practice problems to work through. These will not be formally submitted, as AI has made that signal unhelpful. However it is my expectation that you will work through these on your own after each class. This is the best way to prepare for the exams.

You should feel free to use AI tools to help you with these review questions and practice problems. But you should attempt to work through them on your own first and then use AI as a supplement.

Grading

Quizzes – 20 percent

  • There will be 6-8 short (~15 min) quizzes throughout the semester.
  • Quizzes will cover all lecture material, required readings, and post-class review material since the last quiz.
  • Tentative dates for quizzes are listed in the course calendar, but may be adjusted as needed.
  • I will drop your lowest quiz score. After that, any missed quizzes will receive a score of zero unless you email me with a valid excuse before the quiz.

Midterm – 30 percent

  • There will be one in class midterm on October 16th.
  • If you miss a midterm, you must take a different makeup exam during office hours the following week. Makeup exams will not be curved.

Final Exam - 40 percent

  • A cumulative final exam will be administered during the final exam period at the university scheduled time.
  • You must take the final exam at the scheduled time. Makeup or early finals will not be allowed. Please look at the exam schedule now and confirm that you will be on campus at that time.

Attendance and participation - 10 percent

  • Students are expected to attend class. Persistent absences will reduce your final grade.
  • Students are expected to be engaged in class. If I feel that this is not happening I will resort to cold calling.

Important policies

Assigned seats: In order to facilitate attendance, I will ask that students try to sit in the same seat every class. Seats will be assigned based on where everyone is sitting on fifth class.

Lecture slides: Will be posted on the course website prior to each class. I strongly suggest you print them out and take notes on them during class.

Academic integrity: Students are advised to carefully review and abide by the university’s policies on academic integrity. Any instances of cheating or plagiarism will be reported to the Dean’s office without exception.

AI Tools: As discussed above, I fully expect that students will routinely use AI tools to help understand the reading and review the lecture materials. However, exams and quizzes will be closed book, and will be designed to assess your understanding of the material without the aid of these tools.