COURSE NUMBER: MBA212.1
COURSE TITLE: Energy and Environmental Markets
UNITS OF CREDIT: 3 units
INSTRUCTOR: Severin Borenstein and Catherine Wolfram
E-MAIL ADDRESS: borenste@haas.berkeley.edu; wolfram@haas.berkeley.edu
MEETING DAY(S)/TIME: Wednesdays 6:00-9:30pm
PREREQUISITE(S): Microeconomics (MBA201A) or its
equivalent.
CLASS FORMAT: Classes will be a mixture of lectures
and case discussions, with one or more presentations by leading energy
executives and policy makers.
REQUIRED READINGS: The course will use the textbook, Economics of Regulation and Antitrust , 4th
edition, by Viscusi,
Harrington and Vernon and a packet of readings and case materials.
BASIS FOR FINAL GRADE:
65% exams- 1 midterm and 1 final exam
35% energy strategy games – Game (1), The
Electricity Strategy Game: teams acquire portfolios of electricity
generating units and compete with them in a market that is representative of
California; Game (2), The OPEC Game: teams
act as country-level decision makers in the world oil market. Grading is based
on team performance in these games and on explanations of strategies in written
memos.
ABSTRACT OF COURSE'S CONTENT AND OBJECTIVES:
In the past 30 years, some of the largest industries
have transitioned from regulated to market-based paradigms. Managers in
many transportation, information technology, and energy companies have had to
devise strategies to cope with changes in economic and environmental
regulations and the evolution of new markets and trading platforms. The
energy industries feature a complex mix of regulation and market-driven
incentives. Over the last decade, industries that had previously been
viewed as staid and conservative have been rocked by deregulation initiatives,
the California electricity crises, the Enron scandal, rising commodity prices,
and now the challenge to reduce greenhouse gases
Drawing on the tools of economics and finance, we
study the business and public policy issues that these changes have raised in
energy markets. Topics include the development and effect of organized spot,
futures, and derivative markets in energy; the political economy of
deregulation; climate change, environmental policy and the emerging markets for
green energy; market power and antitrust; and the transportation and storage of
energy commodities. We examine the economic determinants of industry structure
and evolution of competition among firms in these industries; investigate
successful and unsuccessful strategies for entering new markets and competing
in existing markets; and analyze the rationale for and effects of public
policies in energy and environmental markets.
BIOGRAPHICAL SKETCHES:
Catherine
Wolfram:
Catherine Wolfram is an associate professor of
business administration at the Haas School of Business at UC Berkeley and
Co-Director of the Energy Institute at Haas. She has taught core microeconomics
to daytime and evening students and won the teaching award from the evening
students in 2006 and 2008. Her research examines how firms’ market and
regulatory environments affect strategies, and she has focused on the energy
industries. For example, she has studied electricity industry privatization and
restructuring around the world and, in recent work, she is evaluating the
effects of policies designed to address climate change. She received a PhD in
economics from MIT. Before joining the faculty at UC Berkeley, she was an
assistant professor of economics at Harvard University.
Severin
Borenstein:
Severin Borenstein is E.T. Grether
Professor of Business Administration and Public Policy at the Haas School of
Business and Co-Director of the Energy Institute at Haas. He received his A.B. from U.C. Berkeley in
1978 and Ph.D. in Economics from M.I.T. in 1983. His research focuses on business competition,
strategy, and regulation. He has
published extensively on the airline industry, the oil and gasoline industries,
and electricity markets. His current
research projects include the economics of renewable energy, equity and
efficiency effects of electricity pricing, and competitive dynamics in the
airline industry. Borenstein is also a
research associate of the National Bureau of Economic Research in Cambridge,
MA. He served on the Board of Governors of the California Power Exchange from
1997 to 2003. During 1999-2000, he served on the California Attorney General's
Gasoline Price Task Force.