Teaching

Courses taught by the Oleson Lab

NREM 358: Environmental Cost-Benefit Analysis

  • Semester: Fall 2026
  • Class time: Monday/Wednesday, 10:30–11:45 am
  • Location: BIL 341A, University of Hawaiʻi at Mānoa
  • Instructor: Kirsten Oleson, Professor, NREM (CTAHR)
  • Prerequisite assumption: Sophomore-level environmental economics. No calculus-heavy microeconomics assumed.

Course Description

Environmental cost-benefit analysis (CBA) exists to address a specific problem: public decisions involve tradeoffs across incommensurable things, dollars, health, ecosystems, and culture, and someone must weigh them openly and consistently, rather than by whoever argues loudest in the room. CBA is one serious attempt at a transparent, replicable basis for that weighing. It is also the dominant tool federal and state agencies use to justify environmental decisions, and one of the most contested. This course teaches the mechanics of CBA (valuation, discounting, distributional analysis) with respect for the problem it is trying to solve, alongside a running critique of what the method assumes, what it leaves out, and who it tends to favor. Students learn CBA by constructing one, applied to a single Hawaiʻi-based case that runs the full semester, and by examining at every stage what the resulting number does and does not capture.

Learning Objectives

By the end of this course, students will be able to:

Learning Objective Assessed By
Explain what CBA is, its historical and institutional role in public policy, and the theoretical basis of Kaldor-Hicks efficiency. Case Notebook Stage 1; Midterm
Scope a CBA for a real environmental decision: define boundaries, standing, and baseline, and defend those choices against a plausible alternative. Case Notebook Stage 1; Final Report §1; Final Presentation
Apply market and non-market valuation methods (shadow pricing, opportunity cost, contingent valuation, hedonic pricing, benefit transfer, value of statistical life) to value environmental costs and benefits, including cases where valuation itself is contested. Case Notebook Stage 2; Final Report §2–3; Midterm; Final Presentation
Calculate net present value under multiple discount-rate assumptions and explain the political and distributional stakes of discount-rate choice. Case Notebook Stage 3; Final Report §4; Midterm
Analyze the distributional and equity consequences of a policy decision: who bears costs, who receives benefits, and how the choice of referent group changes the answer. Case Notebook Stage 4; Final Report §4; Final Presentation
Compare CBA to alternative decision frameworks (cost-effectiveness analysis, multi-criteria decision analysis, deliberative and participatory approaches) under uncertainty and irreversibility. Case Notebook Stage 5; Final Report §5; Final Presentation
Identify the boundaries of CBA, including rights, cultural and sacred value, and Indigenous sovereignty and consent, what quantification cannot capture, and when CBA should not be the only basis for a decision. Final Report §6; Final Presentation; Midterm
Communicate a technical analysis clearly, in writing and orally, to audiences with varying levels of expertise, and collaborate on a shared analysis while maintaining individual accountability for one's own reasoning. Participation; Flash Talks; Final Presentation; Contribution Statements

How the Class Works

Flipped, hands-on. Pre-class preparation (a video, case, or reading, drawn from real sources rather than a textbook), followed by an in-class exercise and a hand-written worksheet submitted the same session. No lectures walking through slides. Each week meets twice, two 75-minute sessions, approximately 30 sessions across the semester.

Starting week 2, the second session of each week opens with three students giving a 90-second flash talk tied to that week's content, building oral communication skills incrementally toward the mid-semester and final presentations.

Running Case: The Waiāhole Ditch Case

The semester works from an actual legal case: In re Water Use Permit Applications (Waiāhole Ditch Combined Contested Case Hearing), 94 Hawaiʻi 97, 9 P.3d 409 (Haw. 2000). The Waiāhole Ditch, built 1913 to 1916, diverted water from windward Oʻahu streams (Waiāhole, Waikāne, Kahana) to leeward sugar plantations. When Oʻahu Sugar announced its closure in 1993 to 1994, windward taro farmers, Native Hawaiian practitioners, and community groups petitioned to restore stream flow, against leeward agricultural interests who sought to keep the ditch water flowing. The Hawaiʻi Supreme Court's 2000 decision is the leading U.S. precedent applying the public trust doctrine to water resources. It recognized instream flow, ecosystem health, and traditional Native Hawaiian and customary practices, including taro cultivation, as protected public trust purposes alongside extractive use.

The class treats this case as history and precedent, source material for analysis, rather than a dispute for the class to resolve. Implementation remains ongoing, and students are expected to bring the same care to this material that they would bring to any research involving current Native Hawaiian rights and practices.

Primary sources: full opinion; Ola i ka Wai, "Waiāhole"; Hawaiʻi's Thousand Friends, public trust doctrine explainer.

Assessment (100 points)

Component Points
Case notebook / stage deliverables (individual, 5 stages)35
Participation25
Midterm (applied, in-class, open-note)15
Final CBA report15
Final presentation10

Grading Scale

UH Mānoa uses plus/minus grading; percentages below apply to the 100-point total above.

PercentageLetter Grade
95–100A
90–94A-
87–89B+
83–86B
80–82B-
77–79C+
73–76C
70–72C-
67–69D+
63–66D
60–62D-
Below 60F

Course Calendar (Fall 2026)

WeekSessionsTopic
1Mon Aug 24, Wed Aug 26What CBA is, its history, and its institutional role
2Mon Aug 31, Wed Sep 2Kaldor-Hicks and the compensation fiction
3Wed Sep 9, Mon Sep 14Steps of a CBA: framing, boundaries, standing. Guest speaker.
4Wed Sep 16, Mon Sep 21Market valuation, shadow pricing, opportunity cost refresher
5Wed Sep 23, Mon Sep 28Non-market valuation I: contingent valuation, hedonic pricing, valuing the invaluable
6Wed Sep 30, Mon Oct 5Non-market valuation II: travel cost, benefit transfer, instrumental/intrinsic/relational value
7Wed Oct 7, Mon Oct 12Present value and discounting mechanics
8Wed Oct 14, Mon Oct 19The politics of the discount rate
9Wed Oct 21, Mon Oct 26Midterm (in-class, open-note)
10Wed Oct 28, Mon Nov 2Distribution and equity: referent groups, who bears cost and benefit
11Wed Nov 4, Mon Nov 9Uncertainty, irreversibility, precaution versus expected value, safe minimum standards
12Mon Nov 16, Wed Nov 18Alternatives I: cost-effectiveness analysis, introduction to MCDA
13Mon Nov 23, Wed Nov 25Alternatives II: deliberative and participatory valuation
14Mon Nov 30, Wed Dec 2Boundaries: rights, sacred and cultural value, Indigenous sovereignty and consent. Guest speaker.
15Mon Dec 7, Wed Dec 9Final presentation practice sessions
Finals periodTBD, Dec 14–18Final presentation: storyboard gallery walk

AI Policy

CBA requires students to defend every judgment call: what counts, what gets valued, and whose perspective sets the discount rate. Students are expected to hold AI to the same standard. If a student cannot explain and defend a claim, a number, or an argument independently, it should not be submitted under that student's name.

Permitted: brainstorming and idea generation, explaining a concept the student is stuck on, checking spreadsheet formulas or code, editing a student's own draft for clarity and grammar, and summarizing background material the student has already read.

Not permitted: generating any part of a stage write-up, case notebook section, or final report; drafting analysis, arguments, or conclusions; or fabricating or verifying citations without independently checking the source. In-class work is hand-written and submitted on paper; AI has no role in that work by design.