Thursday, June 18, 2015

Happy Summer!

I hope you enjoyed the course. Please feel free to post your favorite or least favorite topics here. Did you learn some new and useful stuff?  What topics would you say are essential for EVS majors to understand? How about ECN majors? I enjoyed the course and our discussions very much. I hope the rest of your summer is great. 

Wednesday, June 17, 2015

What works in fisheries management?

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

ITQ systems (aka: "catch share systems") are basically cap and trade for fishing, and look like a very promising policy solution.  Here is an article from EDF on the basics.  More here from the Fish Project (Oregon Institute of Marine Biology).  Here is a nice summary from the South Atlantic Fishery Management Council.

Here is another article from EDF regarding improved fisher safety under ITQs.   

Here is a map and list of ITQ managed fisheries in the world (old data, there are a lot more now).

Read about success in Iceland (from EDF). 

Are there downsides and complications to this approach to fisheries management? Yes, of course. No policy will be a panacea.  Perfect solutions do not exist. 

Dismissal of promising policy solutions?

Cap and trade is a policy solution that works to reduce pollution faster and at lower cost than standards. We know it can work because it has been used successfully to reduce SO2 and NOx emissions from power plants under the US Acid Rain Program (trading has taken place since 1994).  It worked to expedite the removal of lead from gasoline (read pages 82-83), it worked to phase-out CFCs and halons, it worked to reduce smog in Los Angeles under the RECLAIM program, and it worked to significantly reduce emissions in the EU.  Can it work on a global scale with C02?  It seems promising. Will it be complicated? Yes. Will there be opposition? Yes. Will there be unintended consequences? Yes. Should we therefore dismiss it?

Read more here at Forbes
Here at C2ES 

Monday, June 15, 2015


What policies can be implemented to slow deforestation?  Your first answer might be "make it illegal", via command-and-control (standards).  The problem with this approach is that it does not recognize that people lives depend on earning money from the forests.  What if poor nations could profit from NOT cutting trees rather than profiting from cutting trees?   

REDD stands for Reducing Emissions from Deforestation and forest Degradation. Think of it as a global PES system. 

The system works as follows:

The carbon stored in standing trees in a country is estimated.  Carbon losses from continued "business as usual" (BAU) deforestation and forest degradation are also estimated. The country then undergoes conservation activities to reduce deforestation below the projected BAU level.

The carbon "saved" via conservation activities is credited to the country and made available for sale in international carbon markets.  (Developed) countries (or states) that face carbon reduction requirements can reduce their own emissions and/or purchase credits on the international market.

This provides a monetary incentive to preserve standing forests as long as the profit that can be earned by selling carbon credits exceeds the profit that can be earned from various forms of development that require deforestation.

Sounds good. The skewed intertemporal and international distribution of costs and benefits are a big reason for tropical deforestation.  The benefits of deforestation are realized by current generations, but the costs of deforestation are "paid" by future generations (in large part by developing nations).  You're thinking about Hardin's Tragedy here I hope.

If developed countries buy carbon credits from developing nations, forests are preserved for future generations. Obviously there are a lot of complications and concerns. This will be true for any policy.

Read more about the basics of REDD and REDD+ here at the UN

FAQs here

Some cool videos here.

Are there problems and unintended consequences? Yes, of course.

Read more here and here.

Can these problems be overcome? 

P.S. I have a former student who is working on this REDD project.

Tuesday, June 9, 2015

Some reading on the economics of recycling

Here is a good read from US EPA regarding the economics of recycling in the southeast US.

Here is an excellent article from The Economist (a little long and a little dated, but well worth the read).

Here is an interesting article from CBS News that shows how much recycling depends on oil prices and the prices of recycled raw material.  

Here is a cool article from Slate that provides useful history and perspective on trash and recycling.

Sunday, June 7, 2015

How to capture environmental land rents?

One of the topics for this week is land rent.  For a given parcel of land, land rent is the net gain derived from the land. The "net" in net gain pertains to benefits received from using the land for a particular purpose in excess of the costs associated with using the land for that purpose, including opportunity costs. These benefits can accrue to the property owner or to society at large.  Land tends to be allocated to the use that provides the highest rents.  Because rents from environmental uses of land tend to be non-rival and non-excludable, the market mechanism is unlikely to provide the optimal amount of land set aside for environmental purposes.  What types of policies can promote environmental uses of lands?  You might think of command-and-control approaches like zoning laws or limits on development. You might also think about incentive-based mechanisms like taxing certain uses that have deleterious effects on ecosystem services.  Below is a repost of another option.... 

One incentive-based method that seems to be gaining favor in developing nations is PES. PES stands for Payments for Environmental Services. The basic idea of PES is to create incentives for conservation of natural resources by transferring dollars from those that benefit from conservation to those who bear the (opportunity) costs of conservation.  
In some PES arrangements government and/or NGOs pay landowners to engage in activities to conserve or restore biodiversity. This can be as simple as letting a cow pasture revert back to its natural state or setting aside lands that would otherwise be used for another purpose. 
Costa Rica is a leader in PES and a great example of the power of this approach. From the 1940s through the 1980s, Costa Rica had one of the highest rates of deforestation in the world.  As recently as 1995, forest cover in Costa Rica was as low as 25 percent of national territory, down from over 85 percent in the early 1900s. The principle causes of deforestation were incentives for the conversion of land to agricultural uses, such as preferable tax treatment for lands used to cultivate crops and support cattle, and heavier tax burdens for “unproductive” lands (i.e. lands not used to produce market benefits). People responded to the incentives they faced. Given the costs and benefits of land use it made sense to convert lands to other uses. 
In 1996, leaders in Costa Rica decided to try to reverse this path of biodiversity loss. The main idea was simple: reward landowners for conservation rather than rewarding them for land conversion. A series of forest laws were enacted, which gave favorable tax treatment to conservation and reforestation, banned the export of primary forest products, mandated that banks provide low-interest loans for reforestation, created a system of national parks and forest reserves and, in 1997, enacted a PES system.  
Costa Rica’s PES system involves direct payments to landowners in exchange for the adoption of land uses and management techniques that provide one or more of four services:  Greenhouse gas mitigation, provision of water or other hydrological services, conservation of biodiversity or provision of scenic beauty for recreation and tourism. Payments are provided by government. Revenues from a fuel tax (ala Pigou) are a primary source of funding. Other sources of funds include sale of carbon credits to other nations and international loans. Between 1997 and 2005, a half-million hectares of forest lands were enrolled in the program. Forest cover is now over 60 percent and rising.
While this progress is exemplary, the Costa Rican Minister of the Environment recently stated that it is getting increasingly difficult to conserve. Without a system of international carbon markets, such as that which might take place through large scale adoption of REDD and REDD+ schemes, he suggested that the Costa Rican path of conservation will soon be unsustainable.
Read more about Costa Rica’s PES experience here at PaxNatura.
Read more about PES here at UNEP and at Ecology and Society.

Friday, June 5, 2015

Today is World Environment Day

World Environment Day is today, June 5.  This year's WED has an economic theme:  "Seven Billion Dreams. One Planet.  Consume with Care".  The theme of sustainable consumption sounds great, and I agree that environmental degradation does not have to be a by-product of economic growth, but I worry about the free rider problem.

Read about it here at UNEP and  here at IBT (with lots of great but depressing pictures). Cool video from UNEP here

New EPA fracking study - the debate continues

Yesterday the US EPA released a draft report regarding the effect of fracking on drinking water.  EPA states that this report is the most complete compilation of scientific data to date on the impacts of fracking on drinking water.  Here is the executive summary for those who don't want to read the whole report.

The bottom line is twofold:

1. "hydraulic fracturing activities in the U.S. are carried out in a way that have not led to widespread, systemic impacts on drinking water resources"

2. "there are potential vulnerabilities in the water lifecycle that could impact drinking water."

Basically, EPA found that fracking has led to some damage to groundwater supplies , but the damage is not systematic and it is not widespread.  The number of incidents where groundwater is affected is described as "relatively low" given the number of wells that have been drilled.   In terms of potential impacts, the study suggests that handling the wastewater from fracking will pose more problems than the fracking activity itself.

Given the mixed news, anti-fracking and pro-fracking sides are declaring victory.  

Read about it:

Article at the WP
Article at the NYT
Article and voice-cast at NPR 
Article at the N&O


Tuesday, June 2, 2015


The main topic for this week is non-market valuation.

Here are links to some good sources:

Why Economics Matters for Endangered Species Protection (Shogren et al., 1998)

The Role of Economic Valuation in the Conservation of Tropical Nature (Naidoo, 2008)

Conservation Pays (Yuskavitch, 2007, Defenders of Wildlife)

Marine Conservation: How Economic Valuation of Ecosystem Services Can Help (Environment Matters, 2008)

Can Environmental Economic Valuation Techniques Aid Ecological Economics and Wildlife Conservation? (Loomis, 2000, Wildlife Society Bulletin)

Of additional interest:

Economic Incentives and Wildlife Conservation (Bulte et al., 2003)

Tons of references and links here:  Economic Valuation References WRI

Reefs here and here and here

Valuation and the endangered species act here.

This is a tiny fraction of what's out there. What are your thoughts on valuation?  I'd especially like to see if students from different backgrounds look at valuation differently. When you post a reply, let us know your primary field of study. 

An incentive-based program from Duke Energy

Today our household joined the "EnergyWise" program from Duke Energy. By signing up for this program we are agreeing to let Duke install device on our AC unit that signals the unit to use less energy during periods of peak demand (but never on weekends or holidays).  In exchange for this, we get a small monetary rebate ($25) each year and a "free" LED light bulb.  This program falls under the category of incentive-based programs, but unlike most, this one is not created by government, but by the private sector.  My question to you:  Why would Duke Energy pay customers to use less energy? Don't they make profit by selling more energy?  What's going on here?