Reward system to solve free rider problem

Here is an interesting article from ENN that describes a competition for the development of by-catch reducing fishing gear.

I think this is a great idea. Here's why...

Inventing fishing gear that is more environmentally safe sounds like a great idea, but when you think about it, there's little incentive for an individual to undertake such efforts. Once invented, the "smart gear" will generate positive externalities (benefits that accrue to society at large) through the reduction of incedental catch that cannot be captured by the inventor. Hence, the inventor incurs a great deal of R&D expenses, but shares the gains with society. With open-access or common property fisheries, fishers have no incentive to invent or adopt new technology unless their profits increase or they are forced to do via a technology standard mandate.

By creating a monetary prize, we are in effect subsidizing a positve externality generating good (R&D to reduce by-catch).

Question: is this competition enough, or do we need an additional policy to go along with it?

Ecosystem markets

Here is an interesting article from ENN about markets for ecosystem services (biodiversity, water, carbon, etc).

I loved the quote near the end by the Director of USDA's Office of Ecosystem Markets and Services, who was at first skeptical about whether or not market mechanisms would work to enhance conservation. Regarding the standard (CAC) approach she says: "The regulatory framework that is so critical was driving people to do just the bare minimum"...

In other words, CAC mechanisms result in inefficiency as once you are in compliance, there is no incentive to do more.

Here is the press release from USDA.

How to know when a fish species is doomed

If it has these 2 qualities:

1. The fish is slow growing

2. The fish tastes really good to people

1 + 2 = 3. The fish will command a high price.

Read about a recent transaction here.

Read about the demise of the bluefin tuna here.

Are "green firms" really green?

Interesting analysis of firms claims to be "carbon neutral" over at the Wall Street Journal. Firms claim to be environmentally safe in order to stimulate demand. But those claims may be bogus, especially when it comes to the purchase of carbon offsets - supporting emissions reduction that would have taken place anyway.

Click here for the article.

Friedman and Krauthammer on gas taxes

"Win, Win, Win, Win, Win..."
By Thomas Friedman
New York Times

"The Net-Zero Gas Tax: A once-in-a-generation chance"
by Charles Krauthammer
The Weekly Standard

Clearly stated market failure

There's a nice short article over at ENN "A Massive Market Failure".

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.

Taxing smelly animals

Too much cow gas? Tax it!

Here's the story from YahooNews.

An efficient policy that made me laugh ... its win-win!

Thanks Whitney!

Notice the expected opposition from the farmers. "We'll go out of business" (if we have to pay the real costs of production).

Ralph Nader on carbon taxes vs. cap & trade

From today's Wall Street Journal.

The Economic and Environmental Impacts of Recycling

Great article at Popular Mechanics.

Notice the "chicken and egg" problem and the importance of local conditions.

Blogging opportunity #3

"Us" vs. "Them" - or - "The player and the game"

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?