Porter Fox (the features editor at Powder magazine):
Officials canceled two Olympic test events last February in Sochi after several days of temperatures above 60 degrees Fahrenheit and a lack of snowfall had left ski trails bare and brown in spots. That situation led the climatologist Daniel Scott, a professor of global change and tourism at the University of Waterloo in Ontario, to analyze potential venues for future Winter Games. His thought was that with a rise in the average global temperature of more than 7 degrees Fahrenheit possible by 2100, there might not be that many snowy regions left in which to hold the Games. He concluded that of the 19 cities that have hosted the Winter Olympics, as few as 10 might be cold enough by midcentury to host them again. By 2100, that number shrinks to 6. ...
The effect on the ski industry has already been significant. Between 1999 and 2010, low snowfall years cost the industry $1 billion and up to 27,000 jobs. Oregon took the biggest hit out West, with 31 percent fewer skier visits during low snow years. Next was Washington at 28 percent, Utah at 14 percent and Colorado at 7.7 percent.
The winter sports industry contributes $66 billion annually to the nation’s economy, and supports more than 960,000 jobs across 38 states, according to the Outdoor Industry Association. A surprisingly large sector of the United States economy appears to be teetering on the brink.
As always, with this sort of change, the effect on GDP and jobs is likely to be negligible as people adapt and find substitute activities. The more significant loss is consumer surplus - the willingness to pay for skiiing over and above the money spent. That is harder to replace.
The AERE annual meeting was in Asheville, NC a couple of years ago. I went to too many sessions so had to go back last week and do some things that I missed. On my New Year's "hike" I saw five waterfalls, Looking Glass, Moore Cove, Sliding Rock, Slick Rock and Jackson, in the Pisgah Ranger District. Here is a shot of Jackson:
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.
The opportunity Value of Travel Time (VTT) is one of the most important elements of the total cost of recreation day-trips and arguably the most difficult to estimate. Most studies build upon the theoretical framework proposed by Becker's (1965) by using a combination of revealed and stated preference data to estimate a value of time which is uniform in all activities and under all circumstances. This restriction is relaxed by DeSerpa's (1971) model which allows the value of saving time to be activity-specific. We present the first analysis which uses actual driving choices between open access and toll roads to estimate a VTT specific for recreation trips, thereby providing a value which conforms to both Becker's and DeSerpa's theoretical models. Using these findings we conduct a Monte Carlo simulation to identify generalizable results for subsequent valuation studies. Our results indicate that 3/4 of the wage rate provides a reasonable approximation of the average VTT for recreation trips, while the commonly implemented assumption of 1/3 of the wage rate generates downward biased results.
Using MRFSS data Haab, Hicks, Shnier and Whitehead found significant heterogeneity in the travel cost coefficient. I was clueless about why but then one of my co-authors patiently explained that the travel cost variable was measured with considerable error.
Oh. I knew that.
But, 3/4 the wage rate is much higher than 1/3. I've gone from being dubious to hopeless about the travel cost method. :)
What sort of dirt does Johnny have on Carlos Danger over there?
You already know, don't you, that if Johnny has a computer full of the Senator's selfies, is trying to marry his sweet little girl and continues to threaten him frame after frame after frame, then sometime soon that gun is going to be pointing right at that g.d. Johnny Walker and about 2013-10-12 the Senator and Mark Trail are going to be kicking back with a couple of banquet beers in front of a fire at the lodge. So predictable.
Would you threaten a man with a rifle in his hand? And with a giant trained attack bobcat lurking over your right shoulder? I don't expect Johnny Walker is long for this world. Good riddance.
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