By: Tobias Börger, Nicola J. Beaumont, Linwood Pendleton, Kevin J. Boyle, Philip Cooper, Stephen Fletcher, Tim Haab, Michael Hanemann, Tara L. Hooper, S. Salman Hussain, Rosimeiry Portela, Mavra Stithou, Joanna Stockill, Tim Taylor, Melanie C. Austen
In: Marine Policy, Volume 46, May 2014, Pages 161-170.
Abstract: This paper scrutinises the use of ecosystem service valuation for marine planning. Lessons are drawn from the development and use of environmental valuation and cost-benefit analysis for policy-making in the US and the UK. Current approaches to marine planning in both countries are presented and the role that ecosystem service valuation could play in this context is outlined. This includes highlighting the steps in the marine planning process where valuation can inform marine planning and policy-making as well as a discussion of methodological challenges to ecosystem service valuation techniques in the context of marine planning. Recommendations to overcome existing barriers are offered based on the synergies and the thinking in the two countries regarding the application of ecosystem service valuation to marine planning.
The Bet is Yale University historian Paul Sabin's (no relation to Nick) telling of the story and political culture surrounding Paul Ehrlich and Julian Simon's 1980-1990 $1,000 bet over the Hotelling rule. OK, it wasn't really over the Hotelling rule, but it was about Hotelling-like predictions of changes in depletable resource prices. In particular, the bet focused on the change in prices of five metals (Copper, tin, chromium, nickel and tungsten--I think they made that last one up) over a 10 year period. Whack-job dooms-day ecologist Paul Ehrlich--OK, that's unfair to Ehrlich, he is a butterfly biologist, not an ecologist (is that biased?)--famously predicted throughout the late 1960's and 1970's the coming cataclysmic collapse of the Earth's environmental/ecological systems due to natural limits and exponential population growth.
In short, Ehrlich believed that humans are but one part of the broad ecosystem, and subject to all of the natural laws and limits that come with being part of that system--including species collapse due to exceeding the system's natural carrying capacity. Ehrlich was the loudest voice of the early zero-economic growth movement (and a contemporary of the Club of Rome and Limits to Growth). One observable indicator of Ehrlich's and his colleagues' dire predictions would be the Hotelling-like rise in depletable resource prices over time. As resources become more scarce (reach their natural limits), prices would have to rise. This is a somewhat ironic prediction from Ehrlich given the lack of price rationing in the Limits to Growth-type models of world collapse, but I digress.
Julian Simon, a mild-manned Chicago-trained University of Illinois professor of marketing (who eventually ended up in the University of Maryland School of Business), disagreed with Ehrlich's basic premise that population growth necessarily strained the natural limits of the ecosystem and instead argued that scarcity creates increasing opportunity costs and opportunities for investment, exploration, discovery, innovation and development of subsitute forms of capital. In short, Simon the economist argued that the simple form of Hotelling (prices rise in response to increasing scarcity) was correct, but the extension needs to be accounted for--increasing prices create incentives for the generation/investment/invention of alternative resources. Simon believes that increased in population actually increased general well being, increased the stock of human capital and would ultimately result in the creation of substitute pools of resources (whether natural or man-made). Simon believed that man-made capital would remain substitutable for depleted natural capital and resource prices would fall.
In the end, Simon won the bet and Ehrlich paid off without much fanfare. But in Sabin's view, the bet highlighted a growing set of divides: The academic divide between ecoologists and economists on matters of the environment, the philosophical divide between growthers and zero-growthers, and the political divide between the left and the right over matters of economic management. Sabin does an intriguing job of couching the bet within the heated political environment of the 1970's and 80's tracing the environmental movement through the national political scene from the environmental conservatism of Nixon, to the limited growth/strict conservation advocacy of Carter (not much mention of Ford), to the deregulated free-marketism of Reagan. In the end Sabin draws lessons from both Ehrlich and Simon to make a strong and lucid case for a middle ground between the coercive population reduction arguments of Ehrlich and the free-market environmentalism of Simon.
On a personal note, I found the book particularly useful at providing a different perspective on my own training in environmental economics. Beginning my graduate training in 1991, the year after the bet ended, the foundations of market-based environmental interventions had already been accepted by most economists and much of the mainstream public (to varying degrees of course). "The Bet" provides an interesting, easy-to-read introduction to the muddy politics and social setting that served as a backdrop for the development and relevance of the field of environmental economics. The political and public context provided by "The Bet" has helped to provide me with a much better understanding of how I ended up thinking like I do about environmental issues.
Warning: Spoiler Alert below the jump. If you haven't read 'Inferno' yet, don;t read below the jump, I'm going to give away the plot and ending.
I recently finished reading Dan Brown's (author of The Da Vinci Code) newest book 'Inferno.' As a casual reader of the book, I found it entertaining. Brown does his typical job of keeping the action moving, mixing in some interesting conspiracy theories, making me want to visit some cities I've never been to, and making it seem like being a college professor might be cool (although I have my doubts). I didn't enjoy it as much as The Da Vinci Code, which I didn't enjoy as much Angels and Demons, but still a good read (and I refuse to accept that The Lost Symbol was written).
But, as an economist, I found the book to be complete nonsense.
I know many of you are wondering to yourself 'Where is Tim and why hasn't he posted in a few days. I enjoy Tim's posts so much more than John's." Well, I'm in England (Plymouth to be precise) for a three day workshop on trends in U.S. and U.K. appraches to ecosystem valuation--I'm representing the U.S. perspective in case you were wondering. Anyway, I will have more on the workshop later, but for now I wanted to give you things I've learned about traveling to England. Please keep in mind, as if you needed reminding, I am a stupid American.
Thoughts (In chronological order):
Getting up at 3:30AM to catch a flight sucks.
Getting up at 3:30AM to catch a flight after staying up until 12:00AM the previous night sucks more.
Getting up at 3:30AM to catch a flight after staying up until 12:00AM the previous night on the night when the the U.S. decides to still observe daylight savings time (or goes off daylight savings time, I can never keep that straight) sucks worse.
Getting up at 3:30AM to catch a flight after staying up until 12:00AM
the previous night on the night when the the U.S. decides to still
observe daylight savings time (or goes off daylight savings time, I can
never keep that straight) only to learn upon landing at Dulles airport that your flight to London has been cancelled...well you can fill the rest in.
Twelve hours in an airport is boring.
I can actually sleep on a plane.
But I chose to first watch a movie (The Life of Pi), because 1) it was free and 2) I'm stupid.
At Heathrow airport they make you walk approximately 5K (3.1 miles American--see how I slipped in the European metric there?) to get to customs. That's a long way after sleeping only 5 hours total in the previous 48.
Paddington Station does look like the kind of place a cuddly bear in a blue raincoat would really want to hang out.
People in Paddington Station seem as though they are all in a hurry.
Everything around Paddington Station looks the same. It is hard to tell the houses from the hotels from the dentist office.
Light switches--down is on, up is off? Can we get a little uniformity please?
You have to turn on the outlets or your computer, cell phone and ipad won't charge. Just sayin'.
You have to turn on the outlets?
Again, Down is on, up is off.
Even if a shower has a faucet on the wall, and even if you stand to the side, it doesn't mean that if you turn on the water you won't get an unexpected freezing shower from the other facucet on the ceiling.
The open bus tour is a great way to see London if you only have a few hours.
Correct that. The open bus is a great way to see London if you only have a few hours and it is above 0 degrees Celsius (That's 32F for you Americans). Otherwise, it's freaking cold up there.
A lot of buildings in London are very old and remind me of that movie Mary Poppins or those books by that Charles Dickens guy.
Fish and Chips is really just fried fish and French Fries. I think they named it something fancy to trick us stupid Americans.
Riding trains is fun. Especially if you have a backwards seat.
Sheep. A lot of them. Just an observation from the window of the train.
Not sure why England has a reputation for dreary weather with sunsets like this...
In a different context (Asian Carp), I have advocated for taking advantage of the Tragedy of the Commons to eliminate invasive species. The principle is simple: Given the proper incentives and open access, anglers/hunters/gatherers will overfish/overhunt/strip a common property resource into non-existence. Looks like the State of Florida may be figuring this out:
Nearly 800 people signed up for the month-long “Python Challenge” that started Saturday afternoon. The vast majority — 749 — are members of the general public who lack the permits usually required to harvest pythons on public lands.
“We feel like anybody can get out in the Everglades and figure out how to try and find these things,” said Nick Wiley, executive director of the Florida Fish and Wildlife Conservation Commission. “It’s very safe, getting out in the Everglades. People do it all the time.”
Twenty-eight python permit holders also joined the hunt at several locations in the Everglades. The state is offering cash prizes to whoever brings in the longest python and whoever bags the most pythons by the time the competition ends at midnight Feb. 10.
This is awesome. Using the power of incentives and the willingness to the many to take advantage of what would regularly be viewed as a market failure may in fact solve a different inefficient allocation of ecological resources. An odd case of the theory of second best?
It was billed as a triumphant parade for a big chunk of history, but the space shuttle Endeavour's procession through Los Angeles has come with a catch: the city must chop down 400 trees.
Authorities have started felling some much-loved trees to let Nasa's pride and joy rumble from LAX through streets and boulevards to its final home at the California Science Center.
residents have protested against the sacrifice of pines, myrtles and
magnolias and other species lining the 12-mile route, saying it's a high
price for a two-day parade dubbed "mission 26", following the shuttle's
25 missions orbiting Earth.
"The move of the shuttle allows the city to be a part of this national
endeavor," Sabrina Barnes, Inglewood's director of parks, recreations
and library services, told the LA Times. "And gives the chance to address problematic trees that have eroded the landscape."
I have a feeling "problematic" means "ugly, in my snooty suburban elitist opinion."
**Note, I have nothing against the English, I just get perverse pleasure
from referring to the esteemed English gentleman with whom I work and
who pointed me toward this story in The Guardian, a Brit, and then watching him bristle in his fine English way.
I was recently made aware of signs going up on OSU's campus listing the annual Ecological Benefits of trees on campus (apparently this has been going on for a while, but I rarely venture outside my building, unless I'm getting in my car). Here is a sign for a Northern Red Oak near my building:
Unfortunately the sign has no information on how the benefits are calculated other than a reference to the website treebenefits.com/calculator which at press-time isn't working. Nevertheless, this seems like a great project--or at least a discussion example--for a cost/benefit class. Some questions come to mind:
What are the appropriate methods for valuing the multiple ecological benefits of campus trees?
Are benefits additive across services?
Are benefits additive across trees (that is, is the Northern Red Oak next to the one in this picture worth $402 also? and If so, are the two together worth $804?)
What is the present value of the annualized stream of benefits (quick estimate--assuming an infinite life for the tree and a 5% dicount rate, the annual benefits of $402 per year in perpetuity are worth $8,040 today)?
What is the variation in the estimate?
Why was I not asked to help make these signs?
Feel free to add your questions in the comment section.
So we took the family to see The Lorax yesterday. First, as an entertainment experience I would say it was fine. Visually impressive, mildly amusing and all three kids (from age 10-15) seemed to enjoy it. And as long as the kids were happy, I guess it was worth the money.
With that, I have a bone to pick with the economics of Dr. Seuss.
Warning: Spoiler alert for those of you who have never read or seen The Lorax.
At its core, The Lorax is a story of corporate greed and its affect on the environment. An initially well-meaning entrepreneur, the Once-ler, harvests the tufts of the Truffula trees to produce a thing that everyone needs, a Thneed. At the urging of Louis DePalma, er, The Lorax, who speaks for the tree, the Once-ler establishes a production process based on harvesting the Trufulla tufts without chopping the trees. Ultimately, due to the high opportunity cost of harvesting the tufts while leaving the trees intact, the Once-ler succumbs to greed, abandons principle and prior agreements with Frank Reynolds, er, The Lorax, and resorts to cutting the trees before harvesting the tufts. In the end, greed corrupts and the Once-ler ends up cutting all the Truffula trees, going bankrupt and leaving the forest bare.
A classic tragedy of the commons outcome...right?
Here's the problem from my inner environmental economist's, er dork, point of view. Dr. Seuss either 1) is intent on portraying the entrepreneurial Once-ler as a horrible businessman, or, 2) fails to understand the conditions necessary for the tragedy of the commons.
In The Lorax, the Once-ler drives himself out of business. In his efforts to make as much money as possible, he completely depletes a renewable resource. Now, on the surface this seems like it might be consistent with the overexploitation of potentially depletable resources, but if a potentially depletable resource like a forest, is harvested by a monopolist, then the monopolist has every incentive to harvest the resource sustainably--that is, maximinizing the present value of the stream of future profits. Assuming Truffula trees regrow, which they obviously do since the The Lorax ends with the planting of a single Truffula seed which eventually regenerates the forest, the Once-ler has no incentive to chop down all the trees. That's not profit maximizing.
You see, the tragedy of the commons occurs from competition combined with open access. The only incentive the Once-ler would have to chop down all the trees would be to beat a competitor to the profits of the trees being left in the ground. But nowhere in the The Lorax is there mention of any potential competitors swooping and racing for profit. If the Once-ler felt he had exclusive rights to the forest, he would have every incentive to maintain a renewable stand of Truffula trees. It might be a smaller stand than is socially optimal, but it wouldn't be zero.
So, either the Once-ler was a horrible businessman, Dr. Seuss was a bad economists, or I overanalyze kids movies.
And for some reason my kids failed to find my discussion of economics and the failings of Dr. Seuss interesting on the car ride home.
Despite all the talk about environmentalists and economists needing to join forces, there’s one underlying, deeply inconvenient truth: Environmentalists and economists often see the world from two entirely different points of view.
"This blog aims to look at more of the microeconomic ideas that can be used toward environmental ends. Bringing to bear a large quantity of external sources and articles, this blog presents a clear vision of what economic environmentalism can be."
... the Environmental Economics blog ... is now the default homepage on my browser (but then again, I guess I am a wonk -- a word I learned on the E.E. blog). That is a very nice service to the profession. -- Anonymous
"... I try and read the blog everyday and have pointed it out to other faculty who have their students read it for class. It is truly one of the best things in the blogosphere." -- Anonymous