Final thoughts?

Last chance for some participation credit...

What were your most/least favorite parts of the class?

What were some central themes?

What can I do to improve blog participation?

What works in fisheries managment, and why.

Here is a great article by J. Sutinen illustrating the historical failure of command-and-control approaches to fisheries management. 

You don't have to take an economist's word for it.  Read more here and here and here and here.

Marine Spatial Planning as a means of curtailing overfishing

MSP is essentially zoning in the ocean.
Read about it here at the University of Hawaii (application to tuna).
More here at UNESCO and here at the Ocean Conservancy. 
Note the call for valuation in the first article.
How can economic valuation help in MSP?

Two additional solutions for slowing deforestation

The first is called "extractive reserves", which sounds a bit contradictory. The idea is to allow selective and sustainable extraction of certain resources while preserving the ecosystem as a whole.  Read more about extractive reserves here at World Watch Institute.

"Intercropping" is another idea that looks great. By planting certain species of trees alongside staple crops, nutrients are retained in the soil, significantly increasing yields. Read about tree intercropping here at SciDev.net.

Deforestation in Amazon slows down a bit

Here's the story from the BBC.

North Atlantic Swordfish are back

It's hard to believe that NMFS is labeling N. Atlantic swordfish as a sustainable seafood choice. This is a major victory for international fisheries management.  Read about it here at NOAA.

A short summary of the regulations can be found here.

Ecosystem values from trees

This is really cool: http://ecosystemcommons.org/discussion/ohio-state-unv-ecosystem-services-awareness

Background info here: http://www.itreetools.org/

U.S. soon to be world's largest oil producer

The International Energy Agency projects that the United States will soon surpass Saudi Arabia as the world's largest oil producer, but only for a few years. Further, natural gas will soon become the largest piece of our energy portfolio.

Read about it here at Bloomberg

What factors are driving these changes?
What are the implications for internalizing negative externalities associated with fossil fuel production and consumption?
What are the implications for economic growth?

Here is a related story at the NYT about the expiration of the production tax credit for wind power.

Family size and wealth

Nikolai's response regarding Hardin and population growth got me thinking about this... 

Here is an interesting read at ENN regarding family size, household wealth and evolution. 

The research appears to be seeking an evolutionary explanation for slowing rates of population growth. We know that world population growth is slowing. i.e. population is growing, but not nearly as fast as it has in the past. The UN has predicted that world population will plateau by around 2050, at a population somewhere between 7.4 and 10.6 billion people (best guess is 8.9 B). This is despite significant increases in longevity and lower mortality rates due to advances in medicine and sanitation.  The slowing of population growth is due to lower birth rates. People are deciding to have fewer children, mostly in  developed countries.


The article summarizes the results of a study which attempted to test the hypothesis that having fewer children leads to future reproductive success for offspring due to the advantages of wealth. i.e. having fewer children conveys an evolutionary advantage, if having fewer, but richer children today increases the likelihood that your genes will multiply in the future. 

I'm not sure I follow this line of reasoning, but in any event, the authors of the study did not find support for the hypothesis. However, there are a lot of economic reasons why parents in richer nations might have smaller families than parents in poorer nations. Can anyone think of these?

Here is more reading at the World Bank.

Here is a long report from the UN on population growth and predictions for the future.

One step closer to a global carbon market

Australia joins the EU carbon trading program.
Read about it here at Triple Pundit.

Collaboration and the commons

I've been working on a chapter describing the Tragedy of the Commons for the forthcoming Encyclopedia of Natural Resource Economics (I'm also writing one on Coastal Resource Economics, more about that one soon).  Hardin discusses the tragedy of depletion as an inevitable result when natural resources are rival and non-excludable, noting that self-interested users will tend to ignore the social costs and focus on maximizing personal benefits. To solve the problem, Hardin called for privatization of the commons or government control via rationing or taxation.  We see many modern day examples of this tragedy, from over-fishing to atmospheric pollution. As I've noted on more than one occasion, all of us can be seen as the herdsmen of our day in one way or another.  

It's important to point out that Hardin's tragedy does not always unfold as he described. Under certain conditions, collective action (group management) can be an effective means of achieving environmentally sustainable and economically efficient outcomes for common pool resources. Elinor Ostrom (winner of the 2009 Nobel Prize in Economics) was a leading researcher in this area.

Here is an excellent summary of Ostrom's work.

Read more about Ostrom's work here and here.

A similar notion is provided by this interesting new sharing site. 

Lots of reading on the Tragedy here at Science.

Reading on valuation & Caribbean applications

Here is a short policy perspective that summarizes the main points of this report.

The report is fairly lengthy. The first 16 pages provide an overview of economic value and valuation methods. The remainder is a summary of marine resource valuation work in the Caribbean and recommendations for future work.  Please let me know if you find any typos (I'm sure there are a few), as I am working on the final version of the report.

Pamlico Sound to Close to Large-Mesh Gill Net Fishing to Protect Sea Turtles

This just came through my inbox...
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Pamlico Sound to Close to Large-Mesh Gill Net Fishing to Protect Sea Turtles

MOREHEAD CITY – To protect sea turtles, Pamlico Sound will close to all large-mesh gill net fishing on Wed., Sept. 26.

The Pamlico Sound Gill Net Restricted Area opened Sept. 15, and during the first week the N.C. Division of Marine Fisheries has documented four interactions between gill nets and sea turtles in these waters. These interactions included one dead and one live endangered Kemp’s ridley sea turtles.

It is uncertain if the waters will reopen this fall. The decision will depend on the occurrence of sea turtles in the area.

By federal rule, all of Pamlico Sound closes to large-mesh gill net fishing from Sept. 1 through Nov. 30 each year. The closure began in 1999 after several instances of fishery interactions with threatened and endangered sea turtles.

However, since 2000, the National Marine Fisheries Service has allowed a highly-monitored, large-mesh gill net fishery during the closure in limited areas of the sound under a series of incidental take permits. These permits, authorized under Section 10 of the federal Endangered Species Act, allow for limited takes of threatened or endangered species in an otherwise lawful activity.

North Carolina’s latest incidental take permit for the Pamlico Sound Gill Net Restricted Area expired Dec. 31, 2010. However, the National Marine Fisheries Service has agreed to allow this fishery to continue while the state applies for an incidental take permit to cover set gill nets statewide. An application for this permit, submitted in May 2010, is still under review.

Specific regulations pertaining to the closure can be found at http://portal.ncdenr.org/web/mf/proclamation-m-42-2012.

Readings on economic incentives for pollution control

Here is a link to a report on the use of economic incentives for pollution control in the US. You can use the "quick links" on the right to navigate the document.

Environmental Defense Fund has a short piece on how the use of incentives was a powerful solution to addressing acid rain.

The Environmental Literacy Council has a nice short article on standards vs. incentives.

Here's more from the World Bank.

Here is a short article on economic incentives for water quality management from the WHO.

Here is a great article by Robert Stavins on the topic.

Lots of great information in this report on Economic Incentives for Pollution Control from UNEP.

Welcome CERMES students

Welcome CERMES students!

From today forward we will have 26 students from the Centre for Resource Management and Environmental Studies (CERMES) UWI Cave Hill joining us on the blog.

These students come from Barbados, Belize, The Bahamas, Dominica, Grenada, Guyana, St. Kitts & Nevis, St. Vincent and the Grenadines and Trinidad & Tobago. I hope I didn't forget anyone...

What do natural resource economists do?

This is a blog entry that I originally posted in 2009. I thought I would post it again for this year's students.
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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 populations? 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?  How can scuba diving sites be managed to maximize economic gains and minimize damage to corals?  How important is beach width to tourists? Is beach re-nourishment worth the expense?

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.

Below 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)

TBL 3BL

The topic of measuring the value of ecosystem services was recently raised in class. The context of the discussion was the inability of consumers to make "environmentally friendly" purchase decisions, because there is no clear accounting for the environmental behavior of producers.  Firms can easily present an environmentally friendly appearance in commercials and brochures, but understanding how "green" a firm really is can be a difficult undertaking for the average consumer or investor. Likewise, measures of national, regional or local output most often lack measures of environmental change.


Adding the value of ecosystem goods and services to measures of the bottom line (for a firm, nation, state or municipality) allows for a clearer picture of success, progress and well-being. Likewise, omitting such measures can be misleading. For example, suppose the services of a natural ecosystem such as an estuary are degraded via coastal development. The loss of naturally produced water filtration is not reflected in measures of national output such as GDP.  But if a water treatment plant is constructed to replace the lost ecosystem service, the associated market transactions will be reflected in an increase in national GDP.  Hence, the nation would appear to be better off as a result of replacing a natural ("free") service with a man-made substitute that is most likely inferior. Changes in GDP can therefore be inaccurate measures of changes in net output as well as changes in well being. 

The same is true for firms, though on a different level. Reporting traditional "bottom line" measures like earnings allows investors to make good decisions with regard to financial returns, but some investors also want to support environmental and social progress, and are willing to sacrifice some monetary gains to do so. Similarly, while it is true that all consumers seek to buy products that satisfy their personal wants and needs, some consumers also want to support the greater good, and buy products from firms that are socially and environmentally responsible. How can we measure environmental (and social) outputs so that they can be reported and compared?  Is it even possible to create a set of acceptable measures and common reporting standard for non-monetary outputs? 

A short piece on the triple bottom line here at The Economist.


The state of Maryland uses something called the Genuine Progress Indicator (GPI), which tracks and measures traditional economic measures as well as those related to the environment and people. Thanks to Nikolai for the link.

Food security and sustainability

One of the primary challenges of the day is meeting the growing food needs of our population while minimizing damage to the environment.  Alleviation of poverty requires economic growth and large-scale agriculture, but these things often cause significant environmental damage. Sustainable agricultural practices are available that are less damaging to the environment, but can they effectively feed billions of people? Probably not.

Is poverty reduction vs. environmental sustainability an inescapable tradeoff? I've always considered this to be the case and as such my enthusiasm for sustainable agriculture has remained tempered.  But a new study reveals that there may be hope for seemingly incompatible goals of feeding the planet and preserving critical ecosystem services. Read about it here at Science Daily.  The upshot of the analysis is that yield gaps can be closed with better management of water, land and fertilizer. In other words, it appears to be possible in theory if we can make some changes. These include shifting consumption toward a diet that includes less meat, using less food crops for fuel, using fertilizer more effectively (increasing use in some places and decreasing use in others) and curtailing the burning of tropical forests for low-yield agriculture.

Now the question becomes, can we achieve these goals?  If so, how? Can we rely on the market mechanism to get us there or do we need market intervention via active policy? If the latter, what types of policy interventions might move us in the right direction?

More on the topic here at Scientific American

More here at World Bank

54.5 MPG by 2025?

Achieving such a standard in 12 years seems ambitious given that this is roughly double the average MPG of 2011, but this is what new regulations put forth by the US EPA and Department of Transportation are aiming for. The true average fuel economy will be around 40 MPG because auto manufacturers can earn credits by selling alternative fuel vehicles and the standards only apply to cars, not trucks.

Read about it here at CBS News and here from the NHTSA.

Excellent source of basics on CAFE standards FAQ here from Edmunds. 

Massive detail and analysis here from US EPA. 

The guys at Freakonomics have a nice description of why standards such as these are often less desirable than taxes.  This is a topic that we're going to spend a lot of time with this semester.

CAFE Standards (Corporate Average Fuel Economy) originated in 1975 in response to the 1973 OPEC oil embargo. Here is a brief history of CAFE standards from PEW. 

Here are some basics on CAFE standards from NPR. 


Here is a consideration of unintended consequences of more fuel efficient vehicles.

Like most issues that we'll discuss in class, this one is controversial.

Some argue that the new, higher standards will create jobs (full report here).

Other argue that higher standards will cost jobs.

Final thoughts

What aspects of the course did you find the most interesting?
What are the key lessons that you'll take from the course?

NC House Committee Approves Fracking

Today, the NC House Environmental Committee approved a bill that will lift the current ban on the controversial natural gas drilling method of hydraulic fracturing. State agencies would have a little more than two years to devise regulations, and the make-up of the rule-making commissions is part of the discussion. Opponents suggest that two years is not enough time to study the issue and develop the proper safeguards. Proponents argue that fast-tracking the regulations for fracking and issuing permits sooner rather than later is necessary for economic growth.

Read about it here at the Charlotte Observer and here at CBS news.

Here is a link to reports on fracking by the NC Department of Environment and Natural Resources.
(check out the executive summary and recommendations if you don't have time to read the whole report)

One of the main conclusions of the DENR study is that hydro fracking can be done safely if the right safeguards are in place, and that the current ban on fracking should remain in place until proper standards and enforcement mechanisms have been established.

Here is an excellent series from Scholbohm at NCSU:

What N.C. needs to know about Pennsylvania's Energy Experience 

The Cold-Hard Facts about Fracking in North Carolina Part 1

The Cold-Hard Facts about Fracking in North Carolina Part 2

N.C. Senate proposes limits on forecasting of sea level rise

This is a complicated and controversial story that is front page news here at home, and is making headlines all over. A committee of lawmakers in the North Carolina Senate approved a bill that will limit the data that planning agencies are allowed to use in preparing for sea level rise.  Essentially, planners will only be able to base their forecasts on historical increases in sea level rise, which are relatively low compared to the predictions of a state appointed panel of scientists. The bill would allow only the NC Coastal Resources Commission to engage in sea level prediction, and would restrict the data and methodology that can be used.

Here is a link to the bill. The most controversial part is on the second page, part (e) and includes the following language:

"These rates shall only be determined using historical data, and these data shall be limited to the time period following the year 1900. Rates of seas-level rise may be extrapolated linearly…"

Read more about it here and here at the News and Observer (thanks Paul L.), here from UNCW's Spencer Rogers at NC Sea Grant, and for some comic relief, here is Stephen Colbert's take on the topic.

More on cap & trade

From the New York Times:

Cap & trade leads to lower energy costs for consumers

Cap & trade leads to lower emissions

More on the RGGI program here.

Here is a great article by Tom Tietenberg on cap & trade in the US

Waste to energy at hog farms in NC

Here's an interesting story (from the LA times, oddly enough) about waste-to-energy in NC hog farms.

Same story with more detail here from the Charlotte Observer. 

More here from the Raleigh News and Observer.

US Military leads the way on clean energy

There are a lot of reasons to transition to alternative sources of energy... the environment, the economy and national security. As is the case with many innovations, the United States Military is a leader. Read about it here at Forbes. More here at NPR.

Here is a cool innovation (microgrids) that provides energy to soldiers in the field.

Today is Memorial Day.
Unmeasurable thanks to those who serve and to those who gave it all for our country.

plastic bag bans

Two days ago the city of Los Angeles, CA became the largest city in the US to ban plastic grocery bags, following a host of other locations including San Fransisco (controversial ban imposed in 2007), Portland OR, and North Carolina's Outer Banks (more detail here).

Read about the LA decision here at Reuters News Service.

As we move toward discussing options for pollution control, a general theme that we'll consider is the effectiveness and efficiency of command-and-control alternatives (standards) including such bans relative to incentive-based systems like taxes and subsidies.

A more general question to consider is whether the optimal number of plastic bags is zero or some positive number.

Some places have used taxes/fees (Pigou's solution) to effectively remove most bags. Here are some examples: 
Wales UK

Washington DC
Toronto Canada

Here is a thought-provoking take on the topic from Science and Development Network, basically calling for better management rather than an outright ban. 

Obviously this is a controversial issue. What are the pros and cons of each approach? When is a outright ban a better choice? When might we opt for a tax/fee?  What other pollution problems can be addressed with bans vs. Pigouvian taxes?