Sunday, May 31, 2009

Recyling from Popular Mechanics

Here is a nicely written article from Popular Mechanics (Dec. 2008) regarding the economic and environmental implications of recycling. While recycling most products makes sense from an environmental standpoint, not all recycling passes the benefit-cost test.

Also, importantly, the costs and benefit of recycling depend a great deal on time and place: current prices for raw materials and local conditions. Regarding the latter, scrap prices are much lower now than those cited in the article, making recycling less likely to be beneficial from a purely monetary standpoint. You can check out current and historic prices of various recyclable products at

Be sure to also read these articles from Popular Mechanics:

"Recyling Myths Debunked"

"Recyling by the Numbers: The Truth About Recycling"

While a bit dated, I think this short article sums up the situation nicely:

"Is Recycling Worth It?" by Cecil Adams of The Straight Dope

Monday, May 25, 2009

Econ principles in action

From the World Business Council for Sustainable Development, we learn that fossil fuel emissions have declined for the first time in nearly 3 decades.

Despite a marginally increasing GDP last year, emissions are down due to a combination of forces: high fuel prices causing a decrease in quantity demanded, and lower incomes causing a decrease in demand for just about everything. (note that the priciples lesson"changes/shifts in demand vs. changes in quantity demanded" is a bit blurred by the author of the above piece).

At the start of the economic downturn, especially during all the election hype, I was not optimistic about the prospects for environmental improvements given the state of the economy. From an investment and spending standpoint, when people and governments are concerned about their budgets and incomes, they tend to put environmental concerns on the backburner. Basic discount rate and time value of money theory can be applied here: Lower incomes mean higher discount rates and less spending on goods and services that yield benefits in the future.

A recent Gallup poll backs up this assertion, showing that people are more concerned about the economy (and other issues like healthcare) than they are about the environment, and most people are not making major changes in the way they live despite increased attention to climate change.

But, even if people and governments are not intentionally doing more for the environment, it seems that curtailed market activity handles a good bit of it anyway. Note the obvious tradeoffs here: we buy fewer market goods due to an income effect and as a result can indirectly enjoy more environmental goods. When the economy is booming, people are more apt to want to spend on environmental concerns, but are also consuming more goods and services that harm the environment.

How long will the current trend last?

It depends on a lot of factors of course. The speed of economic recovery, changes in gas prices and the passage (and details) of carbon legislation are the biggies that I can think of. What else?

Given that gas prices are not projected to exceed $2.50 in the short run, if congress does not pass a carbon bill, will consumers be motivated to increase their energy efficiency?

Wednesday, May 20, 2009

Topics in the news

Nationally, two big stories related to natural resource econ are making headlines:

1. New auto and emissions rules

Gallup has some survey results about how Americans feel about standards

2. The Waxman-Markey Climate Bill currently in the House

Krugman has an interesting take on it in today's paper
(note: Kruman is a Nobel Prize winning economist, and is pretty liberal)

Locally, we also have two big issues:

1. Titan Cement
Note the links to many other stories about this topic on the left under "related stories"
Also, if you search back in this blog to September 2008, you'll find lots of related discussion.

2. The legality and desireability of using hardened structures to prevent beach erosion

Suppose we were interested in studying one of these. How might the tools of natural resource economics be useful? What research questions might we want to address? Why would it be important to remain objective (i.e. employ positive analysis rather than normative analysis)?

Sunday, May 17, 2009

Unintended consequences

A theme that we'll see several times throught this course is that of unintended consequences.

When we undertake a policy action for the purpose of something good, we often create ancillary effects that are bad. Luckily, the tools of economics often can help us predict these outcomes.


Subsidizing ethanol from corn raises food corn prices and actually creates more pollution. oops.

CAFE standards mandating high MPG for automobiles decreases the marginal cost of driving so people drive more, creating more pollution. oops.

and from today's USA Today: Protecting one species harms another species. oops.

Other examples?

What do natural resource economists do?

As new students begin to study the discipline of natural resource economics, there is often a great deal of confusion about what the topic is really about. This is especially the case when students are coming from backgrounds with only limited exposure to economics (e.g. EVS, where you've only had one or two econ classes before this one).

Generally speaking, economists try to solve problems using a combination of theory, empirical analysis (data, statistics, math), and intuition. For example, macro economists try to address issues such as how to keep an economy growing without significant inflation. Natural resource economists try to solve problems associated with scarce natural resources.

Some examples from my work include: How to maximize fishery value while balancing the competing needs of commercial and recreational fishers and maintaining a biologically sustainable stock? How can Caribbean tourism grow without harming marine turtle popluations? What regulations would maximize the net gains to society from white tailed deer populations? In the face of depleted stocks, will a nation's supply of seafood increase or decrease with financial incentives to curtail fishing effort?

Obviously, these are complex issues that require interdisciplinary effort. One of the things that I really love about what I do is that I work side-by-side with biologists, policy makers and resource users to address these problems.

Here are links to two excellent essays that provide a nice perspective on the economic view of the environment.

The second essay covers non-market valuation, which we will cover in detail later in the term. It makes a good read now however, as it sets the stage for much of what we're covering at the beginning of the class (e.g. the anthropocentric view of value).

How do Economists Really Think About the Environment (Fullerton and Stavins, RFF, 1998)

Economic Values without Prices (Loomis, Choices, 2005)

Krugman on Carbon from China

Paul Krugman's column from Friday's NY Times paints a depressing picture of China's willingness to curb carbon emissions.

Notably, China plans to continue growing at a rapid pace relying principally on coal power.

If this is the case, what will be the implications of emissions reduction policy here in the U.S. and in Europe?

Background reading:

Last week the NY Times notes that China is building cleaner coal plants

Blog post on Nader discussing tax vs. cap-and-trade

Blog post on Al Gore and "The Climate for Change"

And a few short readings on cap-and-trade vs. carbon taxes:


Greg Mankiw

Environmental Defense Fund

The Carbon Tax Center

Common Tragedies response to the CBO

Tuesday, May 12, 2009

Welcome ECN/EVS 330 Students

Welcome to the natural resource economics blog.

This purpose of this blog is to allow for online discussion of natural resource econ news for students at UNC Wilmington and UWI Cave Hill.

I'll post links to news articles, questions for discussion and tips to relevant on-line material throughout the term. My goal is for us all to learn from each other.

For those of you in ECN/EVS Summer Session 1 at UNCW, please feel free to browse and respond to older content on the blog. As far as class participation (your grade), I'll only be monitoring content from this week forward.


Monday, May 4, 2009

Mercury and Seafood

The U.S. Geological Survey has released a new study detailing the process by which mercury gets into seafood.

Read the highlights here.

Friday, May 1, 2009

Krugman on Cap & Trade

From yesterday's NY Times.

and here's an alternative perspective from Vaclav Klaus (President of the Czech Republic) over at Real Clear World.