Environmental Economics

Now if only someone could put a number to it...oh wait

From CNN.com:

The Chesapeake Bay, which is the United States' largest estuary, covering more than 64,000 square miles and spanning across several states, has seen its fish, crab and oyster stocks dwindle, in part, because of pollution over the past several decades....

The [Chesapeake Bay Foundation] helps to grow millions of oysters that will eventually make their way to sanctuary reefs and will not be harvested. The oysters will reproduce, and make a home for thousands of sea critters that will eventually become food for larger animals.

Which reminds me of the following conclusion drawn by three esteemed environmental economists* in a 2004 report to the Chesapeake Bay Foundation regarding the public willingness to pay for oyster reef restoration programs in the Chesapeake Bay...

...we estimate the non-use value of a ten year oyster reef project, consisting of 10,000 acres of oyster sanctuary and 1,000 acres of artificial reef to be at least $114.95 million...The non-use benefits, although small per household, when aggregated are substantially greater than the costs of restoration.**

*Rob Hick (College of William and Mary), Doug Lipton (University of Maryland) and me.

**Yes, I plagiarized myself from this post.  Unfortunately the link to the report is broken.  Rob, if you're out there reading, do you have a current link to the report?

...we estimate the non-use value of a ten year oyster reef project, consisting of 10,000 acres of oyster sanctuary and 1,000 acres of artificial reef to be at least $114.95 million...The non-use benefits, although small per household, when aggregated are substantially greater than the costs of restoration.**

*Rob Hick (College of William and Mary), Doug Lipton (University of Maryland) and me.

**Yes, I plagiarized myself from this post.  Unfortunately the link to the report is broken.  Rob, if you're out there reading, do you have a current link to the report?

Bush's environmental legacy?

Not sure how I missed this yesterday:

President Bush on Tuesday established three new national monuments in the Pacific Ocean, setting aside for permanent protection pristine coral reefs, the world's deepest underwater canyon and marine environments teeming with tropical fish, sea turtles, manta rays and giant clams...

"It's one of the most important moves in marine conservation in recent decades."

The move follows a similar action by Bush in 2006 to establish a new monument in the northern Hawaiian islands. Combined with the latest announcement, Bush has now protected more ocean area than any president in history.

Tuesday's monuments total 195,000 square miles, an area 36 times the size of the Monterey Bay National Marine Sanctuary, and more than 20 percent larger than California.

My best post of 2008

I left a comment on a green jobs post the day after pagan celebration of a Christian holy day:

That is why economics is known as the dismal science. We strange economists are most adept at recognizing the opportunity costs of various decisions. No one else really seems to care if opportunity costs offset some, or all, of the benefits of a good idea.

Opportunity cost is a strange notion to some (especially intro micro students) ... it is the value of the next best alternative whenever a choice is made. For example, if I purchase a $1000 flat panel LCD TV, the true cost of the TV is not $1000, but what I could purchase instead (such as $500 in each kid's college education 529 plan [sorry kids]).

In the case of green energy subsidies, if you are an economist then you must at least wonder if this is the best way to spend the money. There are benefits of pushing down the costs of green energy (e.g., improved air quality), and there are opportunity costs. Ignoring the opportunity costs is likely to lead to wasteful spending. Considering the opportunity costs is likely to lead to better social decision making -- regardless of whether the benefits of the subsidies exceed the costs.

The notion of opportunity cost, its recognition and the inevitable result that not all great sounding ideas are really great ideas, is the most important thing that economists bring to many policy discussions. Pointing out the unpleasantantries of opportunity cost is one of the purposes of this blog. The dismal part of the dismal science can not be avoided.

A Whale Story

Green group sues the Navy to curb the use of sonar in whale habitats.  Courts side with green groups until the Supreme Court steps in.  Green groups decide to drop the law suit in return for...pretty much nothing.

From the Washington Post:

The Navy has settled a lawsuit filed by environmentalists challenging its use of sonar in hundreds of submarine-hunting exercises around the world.

The Navy said Saturday the deal reached with the Natural Resources Defense Council and other groups requires it to continue to research how sonar affects whales and other marine mammals.

It doesn't require sailors to adopt additional measures to protect the animals when they use sonar.

The agreement comes one month after the U.S. Supreme Court ruled in favor of the Navy in another sonar lawsuit the NRDC filed...

The Navy said the settlement, which was reached Friday, calls on it to spend $14.75 million over three years on marine mammal research topics of interest to both the Navy and the plaintiffs.

The Navy said the long-range research program it adopted under the settlement is basically the same as the one it set out to follow in August 2005, two months before the lawsuit was filed.

 

 

Save the Bay. Again?

Growing up in the region, I know first hand the futility of past efforts--mostly non-enforceable voluntary incentives--to clean the Chesapeake Bay (Save the Blue Crabs dammit!).  Is it time to start over?  Some think so...

A group of scientists who study the Chesapeake Bay took on a new role -- environmental activism -- yesterday, when they made an unusual appeal to revamp the bay's government-led cleanup effort.

That effort began 25 years ago today, with an agreement signed by three governors, the mayor of Washington and the administrator of the U.S. Environmental Protection Agency. Now, the program has spent nearly $6 billion but has failed to deliver the healthy estuary that was promised.

Yesterday, the scientists joined with environmentalists and former Maryland officials to call for a major change. They said the current effort -- which relies largely on encouraging voluntary measures, such as reimbursing farmers or septic tank owners who reduce pollution -- should be scrapped.

In its place, they proposed using tougher regulations to force the bay's polluters to clean up.

...and some don't...

Yesterday, officials in the Maryland and Virginia governments said they would consider the ideas, as did U.S. Sen. Barbara A. Mikulski (D-Md.), who has been active on bay issues.

Jeffrey L. Lape, head of the EPA's bay program, spoke at yesterday's news conference, promising the scientists and activists that he would work to improve the cleanup.

Later, EPA spokesman Travis Loop said it would be counterproductive to scrap the bay program and start over. "It would kind of take the regional restoration effort back to square one, and that's not what's needed at this point," he said.

Hat tip:  Lonewolf

MRE Outstanding Articles in 2007

From the inbox:

IIFET and NAAFE are pleased to share the announcement below.

Martin D. Smith, Junjie Zhang & Felicia C. Coleman Receive the 2007 Dr. S.-Y. Hong Award for Outstanding Article in Marine Resource Economics

The editors of Marine Resource Economics are pleased to announce the recipient of the 2007 Hong Award for Outstanding Article in MRE.  Established by Dr. Seoung-Yong Hong, President, Inha University, Incheon, Korea, this award is given annually to recognize outstanding works published in MRE.

MRE Outstanding Article 2007

Martin D. Smith (Duke University), Junjie Zhang (UCSD) & Felicia C. Coleman (Florida State University), Structural Modeling of Marine Reserves with Bayesian Estimation, MRE Vol. 22(2):121-136.

MRE Outstanding Article 2007: Honorable Mention

Jon Olaf Olaussen (Sor Trondelag University College), Playing Chicken with Salmon, MRE Vol. 22(2):173-193.

Ju-Chin Huang (University of New Hampshire), P. Joan Poor (St. Mary’s College of Maryland) & Min Qiang Zhao (Ohio State University), Economic Valuation of Beach Erosion Control, MRE Vol. 22(3):221-238.

Award Selection:

Selection is made annually by the associate editors of Marine Resource Economics.  Only articles that have been published in Marine Resource Economics are eligible for consideration.  The award consists of a monetary prize and recognition on a perpetual plaque housed in the Department of Environmental & Natural Resource Economics at the University of Rhode Island.

Congrats Marty, Ju-Chin et al.!

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.