Environmental Economics

Throwdown!

From Mankiw's Blog:

Each year, I meet a number of highly promising students who were accepted by [MIT and Harvard] and are having trouble choosing between them. Here is my advice:

1. Don't sweat it. You will get a great education at either place.
2. Look up your favorite ranking of economists' productivity and look at which school has more faculty near the top. Those are the profs you want to hang around and learn to emulate.

For example, if you use this standard ranking and look at the top 50, you will learn that MIT has 3 and Harvard has 12.

That should settle the question.

Not quite.

From the Answer Desk: Monitoring Cap and Trade

Reader Jason Welker received the following question from a high school student:

It’s very interesting how this whole marketing pollution rights works. In this way the “commons” in the tragedy of the commons becomes privatized, and companies are forced to take responsibility for their pollution which is being dumped into the atmosphere.
I do have one question, though, and that is how does one regulate the amount of pollution a factory dispenses into the air? How can the government be sure that a firm is not violating the law by dumping more than its licensed amount?

My question:  Why do Jason's high school students ask better questions than my PhD students? 

Anyway, I'm getting ready for a lecture on the EPA's Acid Rain Program and I happened across this answer...

From the Answer Desk

Reader Michael asks:

Drs. Whitehead and Haab,

This semester I've been taking a course in Environmental Studies.  I've developed an interest in the fields of ecological economics and environmental economics.  My own further reading is starting to skew toward the more radical figures in the field (for example, Hermann Daly and Robert Costanza) due to my own proclivities in that direction.  I would like to develop as balanced a perspective as I can.  Could you make some recommendations for introductory reading?

Dr. Haab, I thank your institution for allowing my beloved Fighting Illini to get back to the Rose Bowl.  I was 1 year old last time and wondering whether I would be a father before I'd see it again.  Of course, we're going to get pounded into a little puddle of goo by USC, but it'll be nice for the boys to go out to Pasadena and soak up some rays.  Good luck against LSU.  Also, Dr. Whitehead, that win against Michigan was a lovely bit of schadenfreude.  Thanks.  Hope you're having a lovely holiday season.

Since Michael did such an impressive job of sucking up (refering to us both as Drs, wanting a balanced perspective and flattering both schools' football teams), I've decided to answer his question directly rather than burying it in another sarcastic, uninformative answer desk post.  My recommendation for a good introductory environmental economics text for non-environmental economists is Tietenberg's Environmental Economics and Policy. 

I have used this text a number of times for intro classes for majors and non-majors.  Econ majors find the text a little simplistic, but non-majors--usually environmental studies types--almost always come away with an appreciation for environmental economics and a depreciation of their belief in the pseudo-science that is ecological economics (I kid). 

From the answer desk: A year's worth of nonsense in one post

When we started this blog, I agreed to put the answer desk on the site so I could spout wisdom frequently and quickly and so I would seem accessible to our readers.  Unfortunately I always forget that I'm forgetful and I forget to check for new questions.  To make up for it, here are responses to a year's worth of questions all in on post, carefully selected for purposes only I know.  Enjoy.

The Answer Desk Homework Policy

It's the beginning of a new school year and a new crop of struggling econ students are starting to realize that their homeworks require 'work.'  As has been the occasional case over the past 2 years, The Answer Desk is starting to get questions that bear a remarkable resemblance to questions than might be asked in standard econ classes*. Take this example recently submitted to The Answer Desk:

Suppose that an economy has two consumers with preferences over air quality andconsumption that are represented by:
u1 (y1,x1) = a ln y1 + (1 − a) ln x1
u2 (y2,x2) = a ln y2 + (1 − a) ln x2
where a=(0,1) . Suppose that air quality is 1= x1 = x2 and that consumers must divide one half unit of consumption, y.

(a) Describe the set of Pareto optimal allocations.
[If you are interested in the rest of the problem, click here]

The Env-Econ Answer Desk has a non-written--now written--policy of not doing other people's homework for a number of reasons:

Is Colby College the Dolphins after Shula or the Cowboys after Landry?

From the RESECON listserv:

In anticipation of my retirement from teaching at the end of this academic year  Colby will be in the market for my replacement this year. We will have a team interviewing at the meetings in New Orleans in January.

...

Tom Tietenberg

Almost everyone who teaches environmental economics begins with Tietenberg's book. If you are bold enough to attempt to replace a legend, the ad is below.

Been there, done that

WAUKESHA, Wisconsin (AP) -- It was embarrassing enough that Mark Stahnke woke up in a neighbor's yard without his pants. Then he remembered they contained a cashier's check for $41,093, meant for his son, and several hundred dollars in cash.

But he got it all back Friday, including the pants, thanks to a man and his dog.

Stahnke said he doesn't know what happened between when he left the bar and when he woke up the next morning, and police were skeptical when he filed a report on Monday.

Hat tip: 5.10dad.

From the Answer Desk--7 months of nonsense in one post

We started Env-Econ almost 2 years ago.  Not long after the launch we installed an answer desk feature with the intent of me answering questions as they were submitted.  Honestly it was an attempt to mooch off our readers for ideas for posts if we ran out.  Turns out we are far smarted and more creative with post ideas than we ever imagined and we haven't had to use you as a crutch nearly as much as we thought.  But that also means that I have completely ignored the answer desk for almost a year.  So I thought I would try to catch up and cram a year's worth of answers into one post--which of course means all of these answers will be short and virtually void of content.  Questions have been selected and edited for no real reason other than to amuse myself--and really, what more could matter.  My responses are in italics.

From the Answer Desk: Should big cars pay higher gas prices?

Rashelle J.M. writes: I think that the gas problem is mostly because people are driving larger vehicles. This conveys to me how greedy people are! I also see very conservative people who are riding scooters to work! People who conserve should be rewarded! I myself drive a 4 cylinder car. Now, with that said, I propose that if people buy bigger vehicles that they pay bigger prices at the pumps. The gas pumps are computerized, so, why can't gas be priced by size of engines?

From the Answer Desk: On Sustainability and Efficiency

Janet Batista asks:

Most economists seem to be fixated on "growth." Is it possible to have an environmentally sustainable economy, stable population, market prices that incorporate environmental costs and still satisfy economists need to see growth?

Great question.  I'll give an answer a try...