Environmental Economics

Cow farts*, fish oil and climate change

Sometimes the oddest solutions are surprisingly effective (from CNN.com):

The benefits to humans of omega 3 fatty acids in fish oils are well documented, but a new study has found that fish oils can have a wider benefit to the environment -- by reducing the amount of methane produced by cows.

The report produced by University College Dublin found that by including two percent fish oil in the diet of cattle they achieved a reduction in the amount of methane released by the animals.

Lowering methane emissions is important for the environment, as the gas given off by farm animals is a major contributor to greenhouse gas levels...

Approximately 50 percent of Irish agricultural methane emissions result from farm animals, which has led to suggestions that, to help combat global warming, the numbers of cattle, sheep and goats should be capped.

The researchers believe that it may not be necessary to limit the number of farm animals if their methane levels are reduced through diet.

*I know it's childish, but it's Friday.  Oh, and it made you click, didn't it?

Didn't we used to call these cow pies?

From the inbox:

There doesn't appear to be any costs associated with this miracle of science.  Could this be a silver bullet for all of the world's problems?

What is this miracle? 

Over the railroad tracks, near Agriculture Drive on the University of Georgia campus, sits a unique machine that may hold one of the solutions to big environmental problems like energy, food production and even global climate change...

In a few hours, organic trash is transformed into charcoal-like pellets farmers can turn into fertilizer. Gasses given off during the process can be harnesed to fuel vehicles of power electric generators.

Biochar is considered by many scientists to be the "black gold" for agriculture.

Its high carbon content and porous nature can help soil retain water, nutrients, protect soil microbes and ultimately increase crop yields while acting as natural carbon sink - sequestering CO2 and locking it into the ground.

Biochar helps clean the air two ways: by preventing rotting biomass from releasing harmful CO2 into the atmosphere, and by allowing plants to safely store CO2 they pull out of the air during photosynthesis...

"We have 3 billion people out there who are at risk for climate change and they can be making money solving our global problem," said Day.

Industries can now begin to look at farmers around the world and pay them for their agricultural wastes, said Day. "They can become the new affluent."

Not all green projects create green jobs

Our friends at Green, Inc have a story on smart public trash cans that have solar-powered compactors built in and are capable of texting dispatchers when they are full--reducing the total landfill space needed for disposal and the number of trips needed by diesel guzzling trash trucks to empty them.  A proposal by the Massachusetts Governor to use stimulus money to put these smart cans in State Parks is meeting resistance--on the grounds that it doesn't create jobs. 

Massachusetts Gov. Deval Patrick has proposed using $21.8 million of stimulus package funds to put thousands of BigBelly units in all of the state’s parks. “It’s projects like these that make people suspicious of the entire federal stimulus project,” State Representative Vinny M. DeMacedo, a Republican, told The Boston Herald late last month. “They might be nice, but how are they creating jobs?”

One answer might be that as the demand for smart trash cans increases, jobs are created in manufacturing.  But, that is counterbalanced by the loss of jobs in traditional trash can manufacturing, trash collection and disposal.  Which way the scale tips is an open question, but to mix mixed metaphors, that's one soggy dinner DeMacedo is serving.

I love when the jokes write themselves

Australia is considering a change in their sewage charge system:

HOUSEHOLDERS would be charged for each flush under a radical new toilet tax designed to help beat the drought.

The scheme would replace the current system, which sees sewage charges based on a home's value - not its waste water output.

CSIRO Policy and Economic Research Unit member Jim McColl and Adelaide University Water Management Professor Mike Young plan to promote the move to state and federal politicians and experts across the country.

"It would encourage people to reduce their sewage output by taking shorter showers,recycling washing machine water or connecting rainwater tanks to internal plumbingto reduce their charges,''Professor Young said.

"Some people may go as far as not flushing their toilet as often because the less sewage you produce, the less sewage rate you pay.''

And what are they calling this new tax system? 

Wait for it.

Here it comes.

The pay-as-you-go rate would provide financial savings for those who reduce their waste water output.

[emphasis added because I get a chuckle out of potty humor]

A wonderfully fertile quote of the day

"Maybe some feeding practices can reduce the cow's flatulence and indigestion.  But I suspect dairy's greatest improvement in the coming global warming debate can come from how we manage and handle the dairy cow's manure, once she has entrusted this wonderful, fertile material to us."

Peter Hardin, Editor of The Milkweed, a monthly dairy marketing report based in Wisconsin in response to the EPA's trial ballon of a cow tax to reduce methane emissions.

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.

The strange economics of landfill management

What happens if the demand for your product decreases?  Simple economics tells us that prices should fall.  Why then is the Solid Waste Authority of Central Ohio talking about raising rates in the face declining demand for landfill space?

Franklin County landfill fees will likely jump nearly 12 percent over the next three years because the economy is down in the dump.

The Solid Waste Authority of Central Ohio is being hit by higher fuel costs, lower interest earnings on investments and more frugal customers. Business is down 3 percent at the landfill because people are holding onto old items --- or buying fewer new items encased in packaging that becomes trash.

So let's separate this out: 

1. Higher fuel costs=decreased supply and higher prices..
2. Lower interest earnings on investments=decreased supply and higher prices.
3. Business is down 3%=decreased demand and lower prices.

While the net effect is unclear, the article seems to go on to argue that the prices need to be raised beacuse the demand for landfill services is decreasing.  Warning: Sarcasm ahead.

Recreational user fees at work

Grand Canyon National Park charges a $25 per vehicle user fee.  Fees are used for infrastructure improvements to the park, and they seem to be working.  I couldn't help but think of John when I saw the sign to the right.  Sorry for the picture quality.  It's the best I could do while trying to inconspicuously take a picture of a restroom with a camera phone while people are streaming in and out (the sign in the middle reads UserFee: Your Fees at Work).   My kids hid in shame. 

Throwdown!

From Mankiw's Blog:

Each year, I meet a number of highly promising students who were accepted by [MIT and Harvard] and are having trouble choosing between them. Here is my advice:

1. Don't sweat it. You will get a great education at either place.
2. Look up your favorite ranking of economists' productivity and look at which school has more faculty near the top. Those are the profs you want to hang around and learn to emulate.

For example, if you use this standard ranking and look at the top 50, you will learn that MIT has 3 and Harvard has 12.

That should settle the question.

Not quite.

Not cleaning up after one's dog is socially unacceptable?

Motivated by a Tax, Irish Spurn Plastic Bags:

There is something missing from this otherwise typical bustling cityscape. There are taxis and buses. There are hip bars and pollution. Every other person is talking into a cellphone. But there are no plastic shopping bags, the ubiquitous symbol of urban life.

In 2002, Ireland passed a tax on plastic bags; customers who want them must now pay 33 cents per bag at the register. There was an advertising awareness campaign. And then something happened that was bigger than the sum of these parts.

Within weeks, plastic bag use dropped 94 percent. Within a year, nearly everyone had bought reusable cloth bags, keeping them in offices and in the backs of cars. Plastic bags were not outlawed, but carrying them became socially unacceptable — on a par with wearing a fur coat or not cleaning up after one’s dog.

At the local grocery store we can purchase durable bags for $0.99 from a display on the way out of the store (after we are asked if we want paper or plastic). Needless to say, I have about 100 or so plastic grocery bags at home. And, needless to say, I'd avoid paying $33 for them if there was a tax.

Hat tip: Todd Cherry.