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   Course Title    Natural Capital in Transitional Economy
Lecturer    Irina Glazyrina
Institution    Chita State Technical University
Country    Russia

I. Aim of the course

The main aim of the course is to introduce the key themes of Ecological economics connected with the issues of natural capital, its role in and dynamics in transitional growth. This course presents both theoretical approaches and empirical analysis within case-studies for Eastern Siberia. The mainstream line of the content follows the classical tradition of Ecological Economics.

Natural capital in Russia might be a "national stock" which can provide resources for economic growth and development for sustainable future. However the natural capital was one of the first "victims" macroeconomic reforms in New Independend States (NIS). W e can see significant degradation of this stock (in quantitative and qualitative sense) during the period of transition. Therefore it is important that new knowledge about processes in nature use, natural resources management, improvement of governance will include into university courses.

Through the learning of theoretical topics and analysis of current ecological-economic processes in Russia and other transition countries students are expected to produce innovative environmentally sound approach to economic development.

II. Role of the course in the overall degree curriculum

This course crosses disciplinary boundaries ans thus it demonstrates new opportunities provided by interdisciplinarity. It oriented on the students of the third year and required some skills in economic theory, micro- and macroeconomics, economic geography and mathematical methods. Lessons learned will be helpful for participants in elaboration of bachelor diploma works.

III. Methods used

Lectures and discussions, practical tutorials using computer classes, selected presentations by participants.

IV. Course content

The course contains following parts.

The total value of natural capital. Direct and indirect values of natural capital. Existence value and intrinsic value. Principle of non-decreasing natural capital.. Substitutability between natural and man-made capital. Strong and weak sustainability

Empirical analysis of nature use in Russia: mining, forestry, fish and land use. Trends in outcomes, distribution, export of natural resources, public welfare. Why rich natural resources in Russia do not provide life- standard improvement?

Environmental Kuznets Curve. The consequences of economy-wide reforms oriented on stipulation of economic growth without institutional support. The real cost of "the growth at any cost". "Dutch disease" of export –oriented economy based on natural resources. World Bank experience: "50 years enough!"

Why is accounting of natural capital is so important? Resource rent and tax system. Why the State (in NIS) cannot catch the natural resource rent? What tax system may be environmentally sound? Ecotaxation: Western and Eastern experiences.

Elements of natural capital which are not revealed in prices and markets. Shadow prices. Hypothetical markets. Markets failures in transitional economies. Willingness-to-pay method and its limits in uncertain economies.

The role of institutions in transitional processes. Pubic and quasi-public institutions. "Shadow sector" in nature use in transitional countries; "gray" and "black" sectors. Institutionalization of shadow sector in transitional countries and its negative consequences for public welfare.

Property rights on natural capital. Free access to natural resources and lack of competition in nature use. Resource monopolies and olygarchies in Russia and other NIS.

Consumer’s preferences and citizen’s preferences. The problem of responsibility for sustainable future. The utility function of society which adopted the concept of sustainable development.

Policy recommendations. Economic incentives for environmentally sound development and their institutional support. The role of information flows and public participation.

Reading list


  1. Glazyrina I. Natural Capital in Transition Economy // Russian National environmental information Agency. Moscow, 2001.

  2. Costanza R., Daly H., 1992. Natural capital and sustainable development // Conservation Biology. - 1992.- 6 no1. - 37-46.


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  3. Making Development Sustainable: from concept to action. 1994. The World Bank, Washington, DC. Serageldin, I., Steer A. (Eds) Environmentally Sustainable Development Occasional Paper Series, #2, . The World Bank, Washington, DC.

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  6. Pearce, D.W. and Warford, J.J., 1993 World without end. Economics, Environment and Sustainable Development. Oxford University Press. Oxford, UK.

  7. The Little Green Data Book., 2000. International Bank for Reconstruction and Development. Washington DC.

  8. Voinov A., Glazyrina I., Pavoni B., Zharova N. (1999b) Environmental Management in Uncertain Economies. In: W.Wehrmeyer, Y.Mulugetta (eds). Environmental Management in Developing Countries, Greenleaf Publishing., 148--159.

  9. World Bank, 1997. Expanding the Measures of Wealth. World Bank, Washington, DC.

  10. C.Wood . Environmental Impact Assessment. A comparative review. Pearson Education Limited, 1995.

  11. T. Riordan (ed.) Ecotaxation. Earthscan Publication, 1997.

  12. G. M.Hodgson. Evolution and Institutions. On Evolutionary Economics and Evolution of Economics.Edward Elgar, 2001.

  13. R. Perman, Y. Ma, J. McGilvray, M. Common.Natitral Resources and Environmental Economics. Pearson Education Limited, 1995.

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