It's a property rights dispute. Seems there should be a bargain to be struck. But only if both sides are wiling to play by the rules. Which apparently neither side is...
A 20-year dispute between a Nevada rancher and federal rangers over illegal cattle grazing erupted into an Old West-style showdown on the open range this week, even prompting self-proclaimed members of militia groups from across the country to join the rancher in fighting what they say is U.S. "tyranny."
What began as a legal fight between longtime rancher Cliven Bundy and the U.S. Bureau of Land Management has escalated as Bundy kept his cattle on the federal land, and the government has responded by beginning roundups of the livestock.
To environmentalists and the feds, however, he's an outlaw of sorts who owes U.S. taxpayers more than $1 million in unpaid grazing fees.
The U.S. government is rounding up Bundy's cattle that it says have been grazing illegally on public lands in Clark County for more than 20 years, according to the land-management bureau and the National Park Service.
Between Saturday and Wednesday, contracted wranglers impounded a total of 352 cattle, federal officials said. Bundy says he owns 500 of the more than 900 cattle that federal officials are planning to confiscate for illegal grazing, the Las Vegas Review-Journal reported. Bundy told the newspaper that each head of his livestock is worth about $1,000.
This week, the EPA is expected to announce changes to the ethanol mandate, a 2007 law that requires energy companies to mix billions of gallons of ethanol into gasoline and diesel fuels. After six years in the mix, corn-based ethanol has lost its popularity, and a diverse group of critics is calling for the law's repeal.
Why are environmentalists in favor of a rollback/repeal?
Though ethanol fuel releases less carbon dioxide than other kinds of gas, many question if the side effects of production are worth it...Growing corn requires fertilizer, which requires natural gas to make. Fertilizer also has contaminated rivers and drinking water, says the report. And ethanol factories usually burn coal or gas, which dumps carbon dioxide into the atmosphere.
Why are Tea Partiers in favor of a rollback/repeal?
Other opponents complain the mandate — like any energy subsidy — is free market poison, claiming it "distorts fuel markets and will raise gasoline prices, especially as the increased blending requirements collide with declining demand for gasoline," reports Politico.
Strange bedfellows indeed.
And who is in favor of keeping the mandate?
Meanwhile, the ethanol industry is asking the AP to retract the story. “At best, the AP article is lazy journalism, but at worst, it appears purposefully designed to damage the ethanol industry,” American Coalition for Ethanol Executive Vice President Brian Jennings said in a statement to the press. “There was an incredibly reckless disregard for the truth in the handiwork of this hit-piece.”
Nobel Prize winning economist* and colleague of mine, Brent Sohngen, wrote the following for his undergraduate class in "Food, Population and the Environment":
high prices for energy and food leave many concerned that we are pushing the
limits of the earth's system with too many people and too much consumption. One
example of our over-indulgence is meat eating. Estimates vary, but in
general, a cow has to eat 12 calories of food for us to get one calorie of
edible meat. Surely we would use less land and be better off if we just
ate less red meat, right?
look more carefully at this question. Just how much land does our meat eating
use? Beef is intensive, and the typical American's annual beef intake is
58 pounds. It takes about 2400 square feet of cropland to produce that
beef, or the size of the average house. As a whole, we use about 6% of
our cropland to grow our annual beef intake.
sources of meat are more efficient than beef. It takes 2 calories of
input for a calorie of pork, and 4 calories of input for a calorie of
chicken. This translates into 400-600 square feet of land, or an area of
land about the size of our living rooms, for us to eat the equivalent number of
calories as 58 pounds of beef. If we want to use soybeans, tofu, other kinds of
beans, or tree nuts like almonds instead, we would use up more land than if we
were to get the same number of calories from pigs and chickens.
if we are not using that much land now, aren't we constantly using more land,
and consuming more food? One economic "certainty" from the past is
that the wealthier people are, the more meat they eat. In the US, meat
consumption grew substantially after World War II as per capita income rose, and
the middle class grew. People in other parts of the world are less
wealthy than we are, and they eat far less meat right now. As their incomes
rise, they will consume more meat.
food reality here in America, though, is not one of endlessly increasing
consumption. Over the past 30 years, our diet has actually become a lot
less land consuming. Actually, it's pretty amazing what we have done.
Based on our typical diet today, we eat the equivalent of about half an acre
each year. Back in 1980 we used two-thirds of an acre, or about 35% more
land per person, for our food consumption. How have we managed to
economize like this?
we seem to have turned the corner on overall food consumption. Between
1980 and 2004 per person food consumption in the US rose by 0.6% per year, but
it has fallen ever since. This recent reduction probably results from
higher real food prices, but it may also have to do with the influence of our
national dialogue on obesity. Second, we've changed our diet by consuming
more poultry and tree nuts, and less beef. We have traded off more land
consuming foods for less land consuming foods.
we have dramatically increased the productivity of our agriculture. Food
production in the US, as measured by cereal yields, has increased by 1.6% per
year since 1980. About half of the reduction in land needed for our
consumption is due to a change in our diet, and the other half is due to an
improvement in land productivity.
are 38% richer in real terms, and population has grown by 36% since 1980, but
today we only need 145 million acres to feed ourselves, down from 147 million
in 1980. We nevertheless still use about 335 million acres of productive
cropland, and an additional 700 million acres of less productive land. The
excess food we produce is exported or turned into ethanol.
less meat will not necessarily cause us to use less farmland – exports and
ethanol are just too lucrative. But eating less meat, when combined with
productivity improvements, does help us use the land we have more
effectively. Given a rising global middle class in Latin America and Asia
that will demand more food and meat, this will be a good lesson for other
countries to learn.
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.
Industrial-scale hog farming has been a contentious issue in Eastern North Carolina for decades. In 1997, amid uproar about environmental problems in hog farming, the state slapped a temporary moratorium on new or expanded hog farms that used what is known as the lagoon-and-spray-field method. It’s simple and relatively inexpensive, yet odorous and pollution prone: Waste is flushed from hog barns into open-air lagoons, and the effluent is sprayed on fields.
In 2000, Attorney General Mike Easley negotiated the landmark Smithfield Agreement with the state’s main pork producers in which the company agreed to concessions including paying $50 million over 25 years for environmental projects. They also funded a $17.1 million research quest for a new method of treating hog waste.
Yet in 2013, virtually all North Carolina hog farms still use the same method.
[Don] Webb, a former hog farmer himself, owns a fishing camp – a string of small lakes where members fish for bass, brim and crappie – near Stantonsburg in Wilson County.
Webb said Stantonsburg recently spent millions on a sewer system for its 800 residents. But a farm with 3,400 hogs, which might produce the equivalent waste of 10,000 people, is allowed to store its sewage in ponds and spray the contents on fields.
“They need to keep their stench on their own land,” Webb said. “A good American would never stink up another American’s home with feces and urine.”
Another complainant is Elsie Herring of Wallace, who lives on a family plot her grandfather bought 99 years ago. Next door is a hog farm with two hog houses and a lagoon. The farmers spray the hog waste on fields next to the Herrings’ property.
“Sometime it comes over like it’s raining on us,” Herring said. “It holds us prisoner in our own home. It has changed our life entirely.”
A hedonic study of rural residential house sales in southeastern North Carolina was conducted to determine the effect of large-scale hog operations on surrounding property values. An index of hog manure production at different distances from the houses was developed. It was found that proximity caused a statistically significant reduction in house prices of up to 9 percent depending on the number of hogs and their distance from the house. The effect on the price of a house from opening a new operation depended on the number of hogs already in the area.
*Note: Either that, or male graduate students are not good Americans.
Google collaborated with
NASA's Landsat program to generate video of man's impact on the earth's
surface. TIME magazine got the exclusive rights to write it all up in an
article, which was released today. Here is the link:
Lots of environmental economics in this. My favorite is the expansion of the Aurora phosphate mine on the south shore of the Pamlico River in North Carolina.
The video shows the mine growing southward on the left hand side and then northward on the right hand side back up to the river. Back in the 1990s I worked with the Tar-Pamlico River Foundation (serving on "anti-PCS" committee and then the board for awhile) opposing all of that. It looks like the legal battle continues. One of my greatest failures as an economist was not suggesting some Coasian resolution.
I'll be rolling out other "greatest failures" posts all summer.
Under the direction of CEO Aubrey McClendon, Chesapeake Energy Corp. plotted with its top competitor to suppress land prices in one of America’s most-promising oil and natural-gas areas, a Reuters investigation has found.
Having grown up in Maryland, I think Chesapeake Energy should be a Maryland/Virginia based company. Nope...Oklahoma.
In emails between Chesapeake — which is involved in Ohio’s Utica-shale ventures — and Encana Corp., Canada’s largest natural-gas company, the rivals repeatedly discussed how to avoid bidding against each other in a public-land auction in Michigan two years ago and in at least nine prospective deals with private landowners in the state.
Pssst...I'll show you mine if you show me yours.
In one email, dated June 16, 2010, McClendon told a Chesapeake deputy that it was time “to smoke a peace pipe” with Encana “if we are bidding each other up.” The Chesapeake vice president responded that he had contacted Encana “to discuss how they want to handle the entities we are both working to avoid us bidding each other up in the interim.” McClendon replied: “Thanks.”
John and I once smoked a peace pipe...no wait, that was something different.
That's a joke and should be taken as an admission of nothing.
That exchange, and at least a dozen other emails reviewed by Reuters, could provide evidence that the two companies violated federal and state laws by seeking to keep land prices down, antitrust lawyers said.
Sheesh, what's wrong with a little monopsony power over land prices? Other than the whole inefficiency thing I mean.
“The famous phrase is a ‘smoking gun.’ That’s a smoking H-bomb,” said Harry First, a former antitrust lawyer for the U.S. Department of Justice, of the emails.
In my head, Harry Frist sounds like Jeff Spicoli when he talks. Awesome!
“When the talk is explicitly about getting together to avoid bidding each other up, it’s a red flag for collusion, bid-rigging, market allocation.”
'People on 'ludes should not drive.'
The revelation of the discussions between Encana and Chesapeake, the nation’s second-largest natural-gas producer, comes as McClendon already is under fire. The company’s board stripped him of his chairmanship after Reuters reported that he took out more than $1.3 billion in personal loans from a firm that also finances Chesapeake. The IRS and the Securities and Exchange Commission have launched inquiries.
Well, if we just banned reporters we wouldn't have these problems.
Ohio Attorney General Mike DeWine is looking into allegations of fraud by Chesapeake that might have led to investment losses for Ohio pension funds.
Red, Red, DeWine, you make me feel so fine.
The Oklahoma-based company has leases on about 1 million acres in Ohio’s Utica shale, more than any of its competitors.
Private-industry cartels are forbidden in the United States, where price-fixing between competitors is illegal under the Sherman Antitrust Act. Violations carry stiff penalties. Companies can be fined $100 million and individuals $1 million for each offense.
To save the imperiled spotted owl, the Obama administration is moving forward with a controversial plan to shoot barred owls, a rival bird that has shoved its smaller cousin aside.
The plan is the latest federal attempt to protect the northern spotted owl, the passive, one-pound bird that sparked an epic battle over logging in the Pacific Northwest two decades ago.
The government set aside millions of acres of forest to protect the owl, but the bird’s population continues to decline — a 40 percent slide in 25 years.
Bastardized version of the Theory of Second Best: In the presence of an uncorrectable (non) market failure, it is sometimes better to create a secondary market failure.
A plan announced Tuesday would designate habitat considered critical for the bird’s survival, while allowing logging to reduce the risk of catastrophic wildfire and to create jobs. Habitat loss and competition from barred owls are the biggest threats to the spotted owl.
I like the slipping in of jobs...but remember as John so often points out: JOBS ARE COSTS.
Interior Secretary Ken Salazar called the draft plan “a science-based approach to forestry that restores the health of our lands and wildlife and supports jobs and revenue for local communities.”
And we know how well science and policy get along.
By removing selected barred owls and better managing forests, officials can give communities, foresters and land managers in three states important tools to promote healthier and more productive forests, Salazar said.
But what if I value the barred owl more than the spotted owl?
The new plan, which replaces a 2008 Bush administration plan that was tossed out in federal court, affects millions of acres of national, state and private forest land in Washington, Oregon and Northern California.
The plan to kill barred owls would not be the first time the federal government has authorized killing of one species to help another. California sea lions that feast on threatened salmon in the Columbia River have been killed in recent years after efforts to chase them away or scare them failed.
The U.S. Agriculture Department kills thousands of wild animals each year — mostly predators such as coyotes — to protect livestock. Other animals, including bears, wolves and raccoons also are killed through the program.
This is interesting. In other cases, the culling of species is to prevent market losses (salmon have market value, livestock have market value...). In this case, the administration is promoting culling to prevent further non-market (existence) losses. If the spotted owl goes extinct, no markets would collapse.
The latest plan for spotted owls was accompanied by a presidential memorandum directing Interior to take a number of steps before the plan is finalized, including providing clear direction for how logging can be conducted within areas designated as critical habitat and conducting an economic analysis at the same time critical habitat areas are proposed.
More economics analysis is always better (for me and John at least).
Officials acknowledge that the plan to kill barred owls creates an ethical dilemma, but say an experiment on private land in northern California has shown promising results. Spotted owls have returned to historic territories after barred owls were removed.
Salazar and other officials stressed the new plan’s job-creation component, noting that for the first time logging would be allowed in areas designated as critical habitat for the owl. Previous plans had prohibited logging in areas designated as critical habitat.
Jobs are costs.
“Appropriate timber harvests consistent with ecological forestry principles (should) be encouraged,” the Interior Department said in a statement.
The American Forest Resource Council, a timber industry group, was skeptical that so-called ecological logging would produce a significant amount of timber or jobs. At the same time, the plan has the potential to double the amount of acres designated as critical habitat, said Tom Partin, the group’s president.
Count me among the skeptics. That's not to say I'm opposed. Just skeptical of any jobs claims.
In the spirit of Halloween, Huffington Post published an article called “The 10 Scariest Real Places in America.” Wondering about the number one scariest locale? Downhill from strip mining operations in West Virginia. Whether it’s the toxic coal slurry, the flooding, or the constant threat that forceful blasting will send a chunk of flyrock through your roof, living near a mountaintop removal site is indeed a scary thought.
"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