Tuesday, December 30, 2008
Click here for the article.
Monday, December 29, 2008
Thursday, December 18, 2008
I love the (attempted) calculation of the external cost associated with a gallon of gasoline, though I can't comment on its accuracy.
Who are the modern day herdsman again?
Happy Holidays everyone.
Friday, December 5, 2008
Here's the story from YahooNews.
An efficient policy that made me laugh ... its win-win!
Notice the expected opposition from the farmers. "We'll go out of business" (if we have to pay the real costs of production).
Thursday, December 4, 2008
Wednesday, December 3, 2008
Notice the "chicken and egg" problem and the importance of local conditions.
We've discussed Garret Hardin's "The Tragedy of the Commons" throughout the semester in just about all of our resource topics. Hardin discussed the herdsmen who were compelled to continue putting additional animals out to graze in the community land. We described this as individually rational as the individual received 100% of the benefits from the action (revenues from a fatter cow) but paid only a fraction of the costs (everyone shares in the lost quality of the common grazing land). Everyone following the same reasoning of course leads to ruin. Self interest, in the case of rival and non-excludable resources, is not compatible with the interests of society.
Who was Hardin really talking about? Was his paper a treatise on pervasive greed years ago or do you think he was talking about someone else? Who are the modern-day herdsmen?
The reason I'm posting about this has to do with something I've been considering for a long time, but really started hitting home during the presidential campaign... When you feel strongly about something, say, a political candidate or an environmental problem, it is easy, useful and convenient to point a finger at a "bad guy" and say "It's his fault. He's just being greedy. We have to stop that guy from doing all this damage!" Us vs. them is so easy. It feels good to have someone to blame for problems.
Examples abound. Titan Cement is bad! The loggers are greedy! The whalers are evil!
Is this productive? More importantly, is this even close to being a useful or correct approach to environmental problems? Are there good players and bad players? Or does the game just have really ineffective rules?
"Development that meets the needs of the present without compromising the ability of future generations to meet their own needs".
What do you think about this definition?
"It's a huge contradiction to clear tropical rain forests to grow crops for so-called 'environmentally friendly' fuels," said co-author Faizal Parish of the Global Environment Center, Malaysia. "This is not only an issue in South East Asia — in Latin America forests are being cleared for soy production which is even less efficient at biofuel production compared to oil palm. Reducing deforestation is a much more effective way for countries to reduce climate change while also meeting their obligations to protect biodiversity."Biofuel production in already deforested and otherwise depleted lands, OK. Cutting trees to plant crops for biofuels, not. Seems pretty intuitive. So why is it happening? Perverse economic incentives.
Read about it here at ENN.
Monday, November 24, 2008
Sunday, November 23, 2008
As we approach the end of the term, among other things I'm considering how everyone is grasping the big picture. You, of course, are considering your grades (among other things).
What follows is the first of a few open questions that will allow us both an opportunity to address these concerns. Mutually beneficial trade via a compatible set of incentives if you will...
Speaking of which, question #1:
Under what circumstances are the individual considerations of self-interest and the resulting social outcomes compatible with true environmental sustainability?
Feel free to provide real, hypothetical or historic examples or a general description.
Saturday, November 22, 2008
A new way to harness the power of moving water comes from something we've known about for hundreds of years: Vortex Induced Vibrations (VIVs).
Read about the new technology at ENN
First observed by Leonardo DaVinci, these vibrations result from spinning water flows forming and breaking up ("shedding") on the downstream side of a rounded ("bluff") mass that sits passively in a current of moving water.
A vortex is a spinning flow of liquid or air. We all see vortices (vortexes? vorteci?) each day as the water in the commode spins away. Other examples include tornados, hurricanes and black holes in space. A wind vortex creates the drag that moves sailboats. Anyone who has seen eddies (little cyclones of spinning water) form around rocks in a river or stream knows about this phenomenon, and has observed that water in the eddy spins on itself faster than the current is moving.
Scientists at the University of Michigan observed the way fish swim through the vortex created by the fish swimming in front of them (similar to drafting or slipstreaming in car or bicycle racing), and have figured out how to harness the power of slowly moving water by mimicking that process. Fish aren't the only animals to do this. We see geese and other birds flying in a "V" formation for the same reason. Lift force from the vortex created by the leader bird helps the trailing birds move along using less energy.
The U Michigan folks found that by placing a passive rounded cylinder in the water such that two vortices are created (above and below the cylinder), slowly moving water creates vortices that cause the cylinder to move like a piston. Presto! A renewable power source.
The thing that comes to mind for me is seeing a crab trap buoy move back-and-forth in a quickly moving tide, just like a piston. Why didn't anyone think of this before?
Friday, November 21, 2008
Basically, anthropogenic release of CO2 is absorbed by the world's oceans. This eventually lowers the pH of ocean waters with potentially disastrous consequences for species that must form and maintain calcium carbonate skeletons or shells. Corals, shell fish, sea urchins and star fish will not grow as fast or survive as long.
Read about it:
A lot of info here from NOAA and the Pacific Marine Environmental Laboratory
Note the connection with sonar and marine mammals and the impact on algea and some types of plankton. This could get really ugly really fast.
NOAA and the National Science Foundation are looking for answers:
"The first comprehensive national study of how carbon dioxide emissions absorbed into
the oceans may be altering fisheries, marine mammals, coral reefs, and other natural
resources has been commissioned by NOAA and the National Science Foundation".
NOAA press release here (pdf file)
Monday, November 17, 2008
So, I buy a bond that promises a certain rate of return in 15 years. The proceeds from the sale of the bond are used to finance rain forest conservation efforts. The rain forest conservation is used as a means of earning carbon credits which are sold on the open market for a profit. The profit is used to pay me back in 15 years. Cool.
Anyone see any problems?
I was particularly taken by this quote:
"The initial thing that came out of this is that it's finally recognized that greenhouse gas emissions from deforestation is larger than emissions from vehicles, aircraft, ships and trains combined..."
And here is an article from ENN on Reduced Emissions from Deforestation and Degradation (REDD) credits.
Thursday, November 13, 2008
Scientists from the University of Missouri have found that submerged trees store carbon for thousands of years, while dead and decaying trees only store carbon for around 20 years before releasing it back into the atmosphere.
Read through to the bottom to see the connection to emissions trading markets.
On Wednesday the U.S. Supreme Court lifted restrictions on the use of sonar in Navy training exercises off the coast of California. Here are some links to the story:
Los Angeles Times
and some background information by the Natural Resources Defense Council.
This is a case of two public goods: national defense and marine species, with the former being a pure public good and the latter a common property resource. By ruling in favor of allowing sonar for training purposes, the Court has essentially said that the potential to save human lives is more important than the potential to save marine mammals.
This is implicitly placing a value on marine mammals, no?
Sunday, November 9, 2008
Notice his dismissal of "clean coal" as imaginary and his 5-part plan for American energy, which includes "putting a price on carbon". While he doesn't explicitly state it here, this means a carbon tax. Gore has been pushing for a carbon tax for a while.
Summary Information About the Potential IFQ Program
Note the range of issues that have to be settled before the program can begin.
The current management of Gulf commercial grouper and tilefish fisheries is based on a traditional command and control approach. This management approach has resulted in overcapitalization of the commercial grouper and tilefish fisheries which has caused increased derby fishing conditions and in some years has led to closures of these fisheries prior to the end of the fishing year. The purpose of implementing an IFQ program for the commercial grouper and tilefish fisheries is to rationalize effort and reduce overcapacity in the fleet. Actions in Amendment 29 include: Initial eligibility for participation in the IFQ program, initial apportionment of IFQ shares, IFQ share categories, multi-use allocation and trip allowances, transfer eligibility requirements, IFQ share ownership caps, IFQ allocation ownership caps, a procedure to accommodate adjustments to the commercial quota, establishment and structure of an appeals process, a ``use it or lose it'' policy for IFQ shares, a cost recovery plan, and approval of landing sites. The Council has selected its preferred alternatives for each of these actions through the normal Council process. If the referendum is approved, the Council, if it so decides, may continue with the submission of Amendment 29 to the Secretary for review and possible approval and implementation. More information on Amendment 29, including Frequently Asked Questions about the proposed IFQ program, may be found on NMFS' Southeast Regional Office's website at http://sero.nmfs.noaa.gov/sf/Amendment29.htm.
Friday, November 7, 2008
The site contains the largest database in the world of studies documenting the environmental and recreational values of ocean resources and now includes 1) an updated methodologies section, 2) frequently asked questions, 3) examples of how Non-Market valuation influences public policy, and 4) an expanded table summarizing valuation estimates from across the United States.
There is considerable overlap between the plans, but both are well worth the read.
Lots of standards and lots of incentives throughout.
Notice, for example, the cap-and-trade push (with all credits sold at auction) in the environment plan and increasing CAFE stadards for automobiles in both plans.
Can we do all of this?
We'll all be closely watching this of course over the next few years. One thing of particular interest to economists is the cap-and-trade (tradable permits) vs. carbon tax (Pigou) debate. Each has pros and cons.
Here's more reading on cap-and-trade vs. carbon taxes:
Environmental Defense Fund
The Carbon Tax Center
Common Tragedies response to the CBO
Monday, November 3, 2008
Friday, October 31, 2008
If the government of Barbados allows this area to be developed it would appear to be a very poor decision from an economic perspective. The land is for sale at a price of US$12 million. A recent valuation study (I have a copy if anyone wants to see it) puts the annual value of the sanctuary and adjoining lands at over US$551 million. Preservation clearly passes the benefit/cost test.
Considering the strong call for continued incentives to support tourism during the economic downturn, policy designed to save Graeme Hall seems a no-brainer. Of course, as with all public goods, the government has to be willing to make the payment up front in order for the environmental land rents to be distributed to society. Notice the importance of the public investment discount rate here.
One could argue that there are significant opportunity costs associated with investing $12 million now, and also forgoing all future tax reciepts that could be earned if the lands were sold to private developers. But, it is hard to imagine an alternative public spending project that could yeild this rate of return.
This is a complicated issue. Proper functioning of the swamp ecosystem requires that the swamp be drained regularly by opening a sluice gate that allows water from the swamp to flow to the sea. This is also critical in preventing flooding in the area. Below are some links to recent articles:
The swamp water contains tannins which makes the water appear dirty (though testing shows that its not dirty).
Tourists get upset when the dirty-looking water clouds the otherwise clear blue Caribbean Sea at adjacent beaches.
Clearly we have a trade-off between two important environmental goods, both of which contribute to the economy via tourism.
In terms of alternative uses, in 2004 a US $22 million dollar water park was proposed for the area as a tourist attraction (think Myrtle Beach, complete with mini golf and a "lazy river"). This was favored by some and opposed by others. The plans for the water park did not go through.
As much time as I've spent in Barbados, I've never been to Graeme Hall... I certainly have a positive willingness to pay (option value) associated with its preservation.
Monday, October 27, 2008
It helps to know what both sides are shouting about (and convenently ignoring) when trying to find that elusive rascal called truth. For example, I regularly listen to both Sean Hannity (far right on just about everything) and Keith Olbermann (far left on just about everything). I also always read Charles Krauthammer (right wing writer for the Washington Post) and Paul Krugman (Princeton economics Professor, recent Nobel prize winner and New York Times writer who is usually to the left of things).
Personally, I don't completely agree with any of these people, but understanding their perspective helps me figure out my own. I definitly agree with some of these guys more than others by the way, and on some issues more than others, but being a good, objective instructor of economics, I'm going to keep that bit of information to myself. ;)
In EVS/ECN 330 we've been talking about trash and recycling (CERMES students should be reading that lecture about this same time), so here are a couple of opposing viewpoints to consider:
In the right corner we have PERC (Property and Environment Research Center)
In the left corner we have EDF (The Environmental Defense Fund)
Where's the economics?
For starters, the fine for stealing sand is too low in some of the nations cited in the article. We know that if the fine/fee does not correspond to actual damages incurred, the result will be an inefficient amount of the hazardous activity. Clearly there is a need for determining the economic loss associated with harvesting sand illegally so that the proper fine can be imposed (while factoring the probability of catching the offender).
Could this activity be the result of incentives created by regulation in other markets? For example, if limestone mining or legal sand mining is regulated via a tax, there is an economic incentive to seek an alternative. My understanding is that this is not the case in most of the Caribbean (in many cases mining is in fact subsidized), but it may be true in some nations.
Mostly I see this as a typical poaching problem: we have an open-access resource where use/harvest is "regulated" on paper, but the regulations are inefficient and not properly enforced.
Here's a link to a Time magazine article discussing the benefits of capturing methane emissions from landfills, even long after they've reached capacity.
Trash... the gift that keeps on giving.
Notice the amount of solid waste produced per day by NJ residents.... wow, and yuck.
This is surprising to me because in New Jersey recycling is mandatory.
Here is some information provided by the state of NJ on recycling, including these pages of information on the economic and environmental benefits of recycling.
Friday, October 24, 2008
Tuesday, October 21, 2008
While I tend to agree with most of the article, being a realist I fear that this call for valuation will largely go unheeded. Why? Non-market valuation surveys tend to be expensive. As governments budgets are slashed in the face of the global economic downturn, can they afford to conduct expensive valuation studies? Of course, I'd like to argue that they cannot afford not to.
Monday, October 20, 2008
We've already seen a significant drop in oil prices... this is not good news for the environment, because high gas prices serve as a strong incentive to find a cheaper alternative fuel. What will happen to the push for alternatives? If oil prices stay low, will we see a return to gas-hungry vehicles?
Treehugger.com also says it's not looking good in terms of industrial pollution.
On the other side of the coin, if consumers have less money, they'll certainly travel less, which means lower emissions. Travel and tourism forecasts for the Asian market and the Caribbean for 2009 are gloomy. More localized vacations (and consumption in general) would seem to lead to lower emissions.
Moving to macro-level issues, the EU has stated that it will not abandon its green goals despite the economic slowdown.
Here in the US, a lot will of course depend on who is elected president, but its easy to assume that given the current state of the economy, environmental concerns and spending may take a back seat for a while.
Click here for more information from Caribbean Net News.
Note the distinction between market-based measures and strict standards toward the bottom of the article.
Thursday, October 16, 2008
I found the unintended consequence interesting as well ... this stricter standard may reduce the recycling of car batteries.
Friday, October 10, 2008
Nation News article
Barbados Advocate article
Yes, the price of gasoline is controlled by government in Barbados, rather than being determined by supply and demand. The price is set artificially low. Under normal supply and demand conditions, this would result in a market shortage (P < P* means that quantity demanded will exceed quantity supplied). However, in this case, the government of Barbados makes up the differential between the true market price and the price ceiling by directly paying the oil supplier. This prevents the shortage, but of course amounts to a subsidy for gas and diesel consumption... the opposite of a tax. Taxpayerswill (eventually) pay this debt.
You'll note in the articles that electricity consumption is also subsidized. Electricity of course is generated by burning fossil fuels. In the case of Barbados and most of the Caribbean, electricity comes from combustion of oil and coal.
What are the environmental implications of these subsidies?
Do these subsidies encourage or hinder the push for alternative energy sources?
Thursday, October 2, 2008
I find it pretty amazing that Exxon was allowed to prolong compensation for such a long time, and pretty disturbing that US and Alaska governments permitted the delay. What does this say about the future? Suppose we were to have another oil spill, or worse a nuclear power accident? Would those affected have to wait 20 years for compensation? This type of red tape and government foot dragging is nothing new. Other environmental examples?
In more recent news, the bailout plan passed by the US Senate just hours ago contained some add-on provisions, including tax breaks for victims of Valdez. Perhaps this was some lawmakers way of making up for the delay and notable underfunding passed in early September.
Here is a quote from the USA Today article:
"The Senate also added a number of unrelated provisions to attract House votes, including a one-year fix to prevent the alternative minimum tax from hitting an estimated 24 million families with a tax increase. Other additions: about $15 billion in tax breaks for alternative energy over 10 years and two-year extensions of other tax breaks, which cost about $42 billion.
The non-partisan Congressional Budget Office estimates that the tax provisions would add $107 billion to projected budget deficits over 10 years. That could bring resistance from centrist and conservative Democrats who want the tax provisions to be paid for.
The bill also includes narrowly tailored tax breaks for film production, racetracks, Virgin Islands rum manufacturers and fishermen affected by the 1989 Exxon Valdez oil spill."
Alternative energy, fishing and rum... sounds like a winner to me.
Click here to read the Caribbean Net News Article
I found the story of Cancun to be pretty interesting... An undisturbed and pristine area presents an opportunity for economic growth if used for tourism. Development ensues and tourists follow. However, the development and tourists damage the very resource that started the process in the first place. Clearly there is a need for a balance. Without proper management, the area will be left without resource quality and without tourist revenues.
Applicable economic theory?
What information needs to be gathered first?
Monday, September 22, 2008
I just want to extend a welcome to the students from the Centre for Resource Management and Environmental Studies (CERMES) University of the West Indies - Cave Hill, who are joining our blog as of this week. We have 19 students from 10 countries in that class, which brings our total number of participants up to around 70.
CERMES students, if you scroll down to the start of the blog, you'll see that we've been discussing a few issues so far... the anthropocentric perspective, objective analysis and a local development issue (a proposal to build a cement plant in an environmentally sensitive area of our county). Please feel free to join the discussion by clicking on comments, and then writing and posting your comment.
I'll be incorporating some Caribbean natural resource issues into the blog and I hope the UNCW students will join in that conversation as well.
Monday, September 15, 2008
Read about it here
Do you think the study will be objective?
More or less objective than "Stop Titan.org"?
With information on a contentious issue coming from two opposing sides, can we believe that either of them will be truly objective?
There is a workshop of information from both groups tomorrow (Tuesday) at Cape Fear Community College's North Campus starting at 4:00. How likely do you think it will be that each side will present "facts" that oppose each other?
Should be interesting...
Read about the workshop here
Friday, September 12, 2008
Lots of Titan info here
Notice that Titan is already looking to expand mining operations into Pender County
It seems obvious that if existing regulation prohibited this type of development, we wouldn't be faced with this issue.
Can a new regulation be developed an retroactively applied?
Would this be "fair"? Legal?
We have numerous examples of regulations being enacted following damage (e.g. CERCLA after Love Canal, The Oil Pollution Act after the Exxon Valdez spill). Most environmental regulation is reactive, some is proactive, but is it possible to have retroactive regulation?
Wednesday, September 10, 2008
Be sure to check out the external links and key documents on the left.
Notice the lack of subjective language in the USFWS argument (the pdf file) against the Castle Hayne site.
Monday, September 8, 2008
1. A presentation from the Binational Toxics Strategy Mercury Workgroup
Toronto, Ontario – May. 17, 2006
2. A July 2008 article from the San Francisco Chronicle
Note the connection between slide #11 in the presentation and the article content.
1. Why is mercury released in cement production (which raw materials contain mercury)?
2. How is mercury released in cement production?
3. How and in what form does the mercury then enter the atmosphere?
4. How and in what form does mercury get absorbed/consumed by humans?
5. What are the potential health effects of mercury ingestion?
6. Is there empirical evidence that these effects are more pronounced in areas adjacent to cement plants?
7. What are the potential solutions?
8. Other questions we should think about?
Some of these are at least partially answered in the sources provided by Whitney, but more info is always a good thing.
Pick a question and go for it. Please cite your sources.
Tuesday, September 2, 2008
Could this be real? The last line makes me think its a joke. I love my dogs and my cat, but this might be a little over the top.
Assuming its true, how might this actually be bad news for Swiss animals?
Thursday, August 28, 2008
More interesting links (with data and forecasts) are on the site, so click around.
What parts of this information are known and what is unknown?
Given the many levels of uncertainty, what should we do?
Monday, August 25, 2008
We have a renewable resource vs. a non-renewable resource, externalities, public goods, non-use values, quality standards ... what other econ issues do you see?
This would be great material for an essay question... some day.
Monday, August 18, 2008
This purpose of this blog is to allow for out-of-class discussion for students of natural resource economics at UNC Wilmington and UWI Cave Hill.
I'll post questions for discussion and tips to relevant news and on-line material throughout the semester. My goal is for us all to learn from each other.