Environmental Economics

Existence value falls to zero

And forget about option value:

NOAA Fisheries Service has formally removed the Caribbean monk seal from the federal list of endangered marine and anadromous species due to its extinction. The agency has reviewed the status of this species and determined that removal of the protections of the Endangered Species Act (ESA) for the Caribbean monk seal is warranted. Populations of the Caribbean monk seal suffered significant mortalities during the late 1880's for their oil and meat, and for scientific study and museum collections. The last confirmed sighting of a Caribbean monk seal occurred in 1952. Although scientists have long hoped that small, isolated populations might remain in existence, surveys of likely habitat have failed to generate any confirmed sightings.

Source: NOAA Fishnews

While we're tootin' our own horns...

Earlier today, in a blatant demonstration of self-absorption and self-promotion and a veiled slap at yours truly I'm sure, John linked to the updated National Ocean Economics Program database of nonmarket valuation studies.  Although I don't seem to perform well in the production of applied valuations studies, there is this upon which I can hang my enormous hat--that fits by enormous head:

NOEP screens the studies for inclusion in the database to ensure that they meet requisite academic standards. While many of the studies include complex statistical analyses, the bulk of each paper typically includes information on the scope of the resource to be valued, a description of the study group, and a summary of the values that were estimated; all of these sections are normally accessible to those without advanced statistical training. In the References and Links section, you will find many resources to assist you to better understand the terminology and the statistical techniques employed.

Clicking the References and Links, you'll find:

There are many good sources, both hard copy and on-line to learn about the terms and methods of environmental economics and environmental valuation. NOEP recommends the following texts:

Introduction to Non-Market valuation:
Champ, P.A., K. J. Boyle and T. C. Brown. 2003. A Primer on Nonmarket Valuation. Kluwer Academic Publishers.

More Advanced Reading on Non-Market Valuation:
Haab, T.C. and K.E. McConnell. 2002. Valuing Environmental and Natural Resources: The Econometrics of Non-Market Valuation. Edward Elgar Publishing.

Freeman A.M. 1993. The Measurement of Environmental and Resource Values: Theory & Methods. Resources for the Future.

OK, now I feel better about myself.

Help: save me from my big-headed ol' self

From the inbox:

I would like to inform you that the NOEP has just made public our fully updated Non-Market Valuation website, which can be accessed at: www.oceaneconomics.org (and click on Non-Market) or directly at: http://noep.mbari.org/nonmarket/.

Still the largest database in the world of studies documenting the environmental and recreational values of ocean resources, the website now includes 1) an updated methodologies section, 2) frequently asked questions, 3) examples of how Non-Market valuation influences public policy, and 4) an expanded table summarizing valuation estimates from across the United States.

In the next two months we will add another 30-40 studies to the database and further upgrade the search capabilities to make them even more useful for our users, especially policy makers. With the oceans facing so many threats, good data and sound science are the keys to crafting effective policies.

We hope that you find our website useful and valuable. We would greatly appreciate it if you could provide a link to our homepage on your website to help us further expand our audience and ensure that everyone involved in ocean conservation knows about this free open-access resource. And when you do so, we would also appreciate if you could please contact us at noep@mbari.org (if you have any comments or questions please use this email as well).

Done!

[Whatever you do in the next 15 minutes, don't click on the database link and conduct an author search for "whitehead." It would only make the guy happy.]

The obligatory post-election analysis: pirate behavior on a sinking ship

If I was a Pirate and my ship was sinking, I'd grab the money too (Pirates left quickly).

Artifacts from the wreckage of a sailing vessel thought to have been the pirate Blackbeard's flagship suggest that the crew left in a hurry, but the reasons aren't clear, the director of a recovery project said yesterday.

...

He also said the fact that cannons were left shows that the crew grabbed money and other items of immediate value when they abandoned the ship after it ran aground off Beaufort Inlet in 1718. The wreck was discovered in 1996 in 20 to 25 feet of water.

"Folks took most everything off of value," he said. "They were in a hurry. It may have been the elements. It probably went down pretty fast, and that's fortunate for us."

I wouldn't need anything else. And that's it and that's the only thing I would need. I wouldn't need this [kicking a pair of pirate boots] or this [dropping a pirate hat]. Just the rum. I would need the rum. And my earring. The rum and the earring and that's all I would need. And the purple bandana. The rum, the earring, and the purple bandana, and that's all I would need. And the sword. The rum, and the sword, and the purple bandana and the earring. I wouldn't need one other thing, not one - I need this [as I grab a parrot]. And that's all I would need. The rum, the sword, the purple bandana, the earring and my parrot. [Parrot squaks] I don't need my parrot. [*]

*Note: Adapted from the famous Navin Johnson line in The Jerk.

Travel cost method data for your students

In the second installment of my Env-Econ 101: Environmental Economics blog classroom data project, here is some data suitable for a single site travel cost method recreation demand model estimation.

Details:

• n = 151
• Dependent variable = trips (day trips to Wrightsville Beach, NC)
• Income = household income in thousands
• TCWB = travel cost to Wrightsville Beach (including time costs)
• TCOB = travel cost to the Outer Banks, a substitute (including time costs)
• Rating = a subjective beach quality variable
• Data: Download wb_tcm.xls

The survey can be found in the Final Report.

I haven't written anything up from these data yet but soon will ...

Dividing up the OCS pie

North Carolina wants a piece (Easley: Let NC hold offshore drilling leases):

As offshore drilling looks more and more like a possibility, politicians are trying to shape what might happen off North Carolina's coastline.

Gov. Mike Easley told the state's congressional delegation Wednesday that he wants North Carolina - not oil companies - to hold any leases that are put out for offshore drilling.

His comments come in the wake of a bill in the U.S. House that would open the Outer Continental Shelf to oil drilling. That bill, approved late Tuesday, was supported by nine of the state's 13 House members.

The federal government usually leases acreage to oil companies for several years, putting the leases out to bid and earning money both from fees and a share of oil revenues.

But Easley said North Carolina should get any leases - without paying the federal fees.

Note: State waters extend 3 miles offshore. Federal waters go from 3 miles offshore to 200 miles offshore.

Over 2 billion served

I have somehow obtained a copy of a letter from the Congressional Budget Office to the Chairman of the Committee on Natural Resources of the U.S. House of Representatives about the budgetary issues governing the leasing of oil and gas resources on the Outer Continental Shelf [PDF]. Among its dark secrets is this:

You asked for information about the budgetary implications of a recent administrative action and potential legislative changes in policies governing the leasing of oil and gas resources on the Outer Continental Shelf (OCS). In particular, now that the President has removed previous restrictions on leasing in areas off the Atlantic and Pacific coasts, you asked how CBO would estimate the budgetary impact of legislative proposals ...

Taking into account a wide range of potential leasing results under current law, CBO estimates that OCS receipts will increase by about $2 billion over the 2009-2018 period as a result of the recent administrative action. ...

$2 billion sounds substantial. But, a quick analysis of all U.S. government revenues over the period of 2009-2018 indicates that it would amount to only 0.09% of the 10 year deficit [PDF].

This is only part of the benefit-cost analysis that should be conducted. Other benefits are the market effects of increased oil and gas. Costs include environmental costs. I'll try to get this part completed later this afternoon and send a letter to the Chairman of the Committee on Natural Resources of the U.S. House of Representatives.

Or maybe I'll work on a powerpoint.

I've been using this to decide when to make the 6 hour trip to the beach

From the inbox:

this site gives live views for four beachs in N.C. ...... http://www.surfchex.com

Use marginal analysis!*

What to do about dumping in Banks Channel (Wrightsville Beach wants to ban toilet discharges from boats)?

Town officials wants to prohibit boaters from dumping waste from their onboard toilets into public waters around the town. They suspect it's one of the reasons for deteriorating water quality in Banks Channel.

Armed with preliminary data from UNCW researchers, the town wants the Environmental Protection Agency to establish a "no discharge zone" for waters within the town's borders. ...

Water quality problems in Banks Channel are nothing new. Swimming advisories are a regular occurrence there. Banks Channel has had six swimming advisories posted in the past year because of high bacteria levels, according to the N.C. Recreational Water Quality Program.

That high bacteria count is an indicator for organisms that can cause gastrointestinal and skin problems. ...

But there are a number of questions that need to be answered, said Town Manager Bob Simpson. How would it be enforced? What would the penalty be? Who gets any fine revenue? And how do you educate boaters about the rules?

What should the penalty be? I have an idea. Hire a UNCW economist to estimate the marginal benefits (MB) and marginal costs (MC) of not dumping. Where MB=MC is the efficient fine. When the probability of getting caught dumping is less than zero one, divide the efficient fine (under certainty) by the probability of getting caught.

*Alternative title: "Into the crapper"

Existence value

Definition: Willingness to pay for the existence of an environmental resource without on-site use. It can be motivated by an ecological ethic, altruism toward others or bequests to future generations. Example:

One of Earth's last frontiers lies off the Carolina coast, on the cold, black ocean bottom 1,200 feet below the waves.

Scientists are just beginning to explore these deep-water coral reefs, possibly millions of years old, that stretch from North Carolina to Florida. They form pristine oases, alive with fish, crabs and creatures that one researcher said "look like Dr. Seuss went crazy down there."

The discoveries have also caught the attention of the Bush administration, which is reported to be interested in protecting 25,000 square miles of reefs off the Southeast as a national monument.

...

No more than 40 people have ever seen them.