Environmental Economics

Oil prices provide incentive for finding oil in ... Kentucky?

Ah, the Bluegrass State; the place where I spent my formative years; acquired a formal education; the Kentucky Derby, the Wildcats, Keeneland and ... oil? From the Louisville C-J (Advances spur ...):

Ohio Kentucky Oil Corp. is now striking oil in about eight out of 10 wells that it drills and is developing more than 60,000 acres in Kentucky and Tennessee, Spaulding says. As crude prices approach $70 a barrel, many smaller exploration companies are using new extrusion techniques to pump oil from some long-abandoned wells, and there is renewed interest in "stripper" wells that may have been pumping no more than a half to one barrel a day.

"Eight years ago, when oil was $18 a barrel, a well that was producing one barrel a day was worth $6,500," Spaulding said. "That same well today, still producing the same 365 barrels a year -- at let's say $58 a barrel -- would now be worth $21,000."

One barrel a day -- 20 million more of those -- Peak Oil? Bah!

It's Hot, Hot, Hot!

2005 was the warmest year on record.  It seems there is a disproportionate effect in the North Carolina mountains as evidenced by Appalachian State's new recruiting video (Warning:  Video with sound--but trust me it's well worth it).  Apparently, NOTHING IS HOTTER!

Sorry John, couldn't resist.

Environmental Valuation Goes Mainstream

I'm always looking for examples I can use to answer the question "What is it you do anyway?" 

From Reuters:

Costs of safeguarding the world's fast-disappearing coral reefs and mangroves are small compared to the benefits they provide from tourism to fisheries, the U.N. Environment Program (UNEP) said on Tuesday.

The report, part of a recent trend trying to place a value on the natural world, said that pollution, global warming and expanding human settlements along coasts were among mounting threats to reefs and mangroves.

How is the U.S. really doing on the 2006 Environmental Performance Index?

The U.S. ranks 28th in the world in achieving certain environmental goals according to the Environmental Performance Index produced by Yale and Columbia. Yesterday Mark Thoma linked to a NYTimes article which could be interpreted as implying that the U.S. should be doing better.

The analysis conducted in the reports puts the U.S. under the line. In other words, the U.S. is doing worse than expected given its income level. I wondered if this were true. Using a slightly more complicated analysis it appears that the U.S. is doing about as well as it should be doing.

A Little More Rain on the Hybrid Parade

A very interesting article in the Weekly Standard takes aim at subsidies for hybrids given how poor they actually perform with regards to fuel efficiency in real-world conditions. As much as many on the Left may hate to agree with anything the WS says, I think they have a point; a significant one. Their views are a nice compliment to my earlier piece on hybrids that appeared on this site and can also be accessed here. I'm curious what you all think.

J.S.

What is the Coase Theorem, really?

Each year I teach a Master's/Ph.D. level class in Environmental Economics.  One topic I always struggle with presenting is the Coase Theorem.  Not because it is overly complicated.  There are just so many versions of it that I don't know which one to present.

WARNING:  Long post ahead.  This is my attempt to straighten out a bunch of confusion I've caused over the years in teaching the Coase Theorem.  If it sounds like a classroom lecture, that's because it is.

NC Ecosystem Enhancement Progam

The Ecosystem Marketplace eNewsletter* points me to the NC Ecosytem Enhancement Program. Here is the leadi nto the article, Proactive Mitigation ...:

Highway construction projects connecting the new businesses, malls and housing that fueled North Carolina's growing economy were screeching to dead ends when they unsuccessfully navigated wetland-protection regulations. Meanwhile, wetlands continued disappearing despite tough regulations designed to protect them.

And the Survey Says

Twenty-eighth:

United States Ranks 28th on Environment, a New Study Says, by Felicity Barringer, NY Times: A pilot nation-by-nation study of environmental performance..., jointly produced by Yale and Columbia Universities, ranked the United States 28th over all, behind most of Western Europe, Japan, Taiwan, Malaysia, Costa Rica and Chile, but ahead of Russia and South Korea.

Stephen King or Global Warming?

Add freakishly large jellyfish interfering with Japanese fishing to the list of possible global warming side effects.

Holy smokes.  And yes, there is a real economic issue here (from Reuters via ENN.com):

"It's a terrible problem. They're like aliens," Noriyuki Kani of the fisheries federation in Toyama, northwest of Tokyo, told Reuters ahead of the conference.

There are no official figures on the size of the problem, but Kani says the financial losses are obvious.

"If your nets are full of jellyfish, of course there is no space for fish," he said.

Cutting up and disposing of the giants can turn a three-hour fishing trip into a 10-hour marathon, while valuable fish are poisoned or crushed under the weight of the unwanted catch.

Gas tax vs mileage tax

This week I've been able to read a few pieces on proposals to increase the gas tax. In two of these the authors argue that gas taxes are wrong headed for several reasons. The third was this morning, Tom Friedman calls for a higher gas tax in his NYTimes column (The new 'sputnick' ...$$$):

The one thing we can do now to cope with all four of these trends is to create a tax that fixes the pump price at $3.50 to $4 a gallon - no matter where the OPEC price goes. Because if consumers know that the price of oil is never coming down, they will change their behavior. And when consumers change their behavior in a big way, G.M., Ford and DaimlerChrysler will change their cars in a big way, and it is cars and trucks that consume a vast majority of the world's oil.

The fourth piece was a re-read.