Environmental Economics

Well that's the way that I want it to stay...

I always want it to be that way for my Nola...No no no Nola*.

From the AP:

A full recovery in New Orleans could take 25 years as homeowners, businesses and tourists are coaxed back to the city devastated by Hurricane Katrina, the Bush administration's Gulf Coast recovery coordinator said Thursday.

[...]

Much of the economic rebirth hinges on flood maps that will set safety standards for rebuilding, Powell said.

The four parishes that make up New Orleans and its immediate suburbs have been waiting for the Federal Emergency Management Agency to issue the flood maps for months. Powell said he expects FEMA to release the maps soon, but that the data largely is tied to new levee cost estimates that would nearly triple earlier projections _ to $6 billion _ for protecting the city.

Rebuilding also requires the design of an efficient flood insurance policy.  Unfortunately the policy we have in place, the National Flood Insurance Policy, is not efficient. 

Why?  Well I'm glad you asked.  Watch here for John and my take on the NFIP.  It's due to be published tomorrow in the 2nd quarter issue of the Milken Institute Review.

How's that for shameless self-promotion?

*If you don't get the title reference, see here...and then see if you can get the song out of your head for the rest of the day.

Stavins: marketable pollution permits ... the new It Girl

In his July/August 2005 "An Economic Perspective" piece for The Environmental Forum, Rob Stavins lists 7 lucky reasons why the efficiency of marketable pollution permits has become the new conventional wisdom (The Making of a Conventional Wisdom):

1. increasing pollution abatement costs
2. Environmental Defense embraced markets
3. marketable pollution permit programs were designed to reduce emissions in addition to cutting pollution abatement costs
4. economists focused on cutting abatement costs instead of fussing about the efficient target of SO2 emissions
5. marketable pollution permit systems were given a chance to shine because they were implemented with newly regulated pollutants
6. the Carter and Reagan deregulatory years made market-based solutions more acceptable
7. chance

Caribbean Coral Suffers Record Death

Calculated Risk has news about a large loss of coral in Caribbean waters":

Calculated Risk: AP: Caribbean Coral Suffers Record Death: Seth Borenstein, AP Science Writer reports: Caribbean Coral Suffers Record Death

A one-two punch of bleaching from record hot water followed by disease has killed ancient and delicate coral in the biggest loss of reefs scientists have ever seen in Caribbean waters.

And I thought we made an impact

It was only just the other day that I bogus-ed the idea the the government should require drinking water testing at the tap. It was only just today that the governor announce a drinking water testing proposal (Easley to ask for $2.4 million ...):

Gov. Mike Easley will request $2.4 million to improve the state's regulation of public water systems and private wells, according to his office.

The request follows a series of stories in The News & Observer of Raleigh about shortcomings in the state's water monitoring programs.

The request also follows my blog post bogus-ing regulation of private wells (see above link). And I thought we made an impact [sarc].

I thought new CAFE standards were dead?

From the NYTimes (U.S. Raises Standards ...):

The Transportation Department announced new fuel economy standards Wednesday for sport utility vehicles, pickup trucks and minivans that will make some of them go farther on a gallon of gasoline than the average car does, and will apply to many of the biggest S.U.V.'s for the first time.

But the overall fuel savings, 8.1 percent when the rule is fully phased in, were characterized as too modest by many conservation advocates, who also noted that the biggest pick-up trucks will still be unregulated. Remarks by auto manufacturers were restrained.

Here is something I said about CAFE standards back in August.

Taxing miles in Oregon

Out of some perverse fear that the gas tax revenue spigots will clam shut, Oregon is testing a GPS system for the impending mileage tax (Seeking Fiscal Health ...):

The Oregon experiment is among several efforts across the country designed to increase state revenue for road maintenance and construction without raising gasoline taxes. Oregon's examination of a "vehicle miles traveled tax" comes at time when many states are facing depleted transportation budgets, chiefly because of inflation.

Call me a Luddite (did I just hear someone call me a Luddite?) but sometimes what sounds cool isn't so cool. Here are a couple of problems:

• The aggregate cost of the GPS devices could be high
• Those who buy fuel efficient cars won't be happy about getting stuck with a tax they tried to avoid with good behavior

Also, drivers who hate gas taxes aren't likely to celebrate taxing miles.

And just for the record, environmental economists like gas taxes because they can be used to correct negative externality problems (i.e., reduce pollution) not for their generation of revenue at a relatively low deadweight loss.

Who is this Joe Barton?

Who is this evil-subsidizer and why is he becoming a caricature of his-big-Texas-self?

Here is the opening of a long piece in the NYTimes that includes political graft, sex and murder. Well, really, no sex or murder, but the movie version will be sure to include it. I'm casting Tom Selleck or Charle Sheen as Joe Barton and Sandy Bullock* as the hard-nosed reporter who determines that subsidies are bogus when price is above cost and there are no positive externalities.

It was after midnight and every lawmaker in the committee room wanted to go home, but there was still time to sweeten a deal encouraging oil and gas companies to drill in the Gulf of Mexico.

"There is no cost," declared Representative Joe L. Barton, a Texas Republican who was presiding over Congressional negotiations on the sprawling energy bill last July. An obscure provision on new drilling incentives was "so noncontroversial," he added, that senior House and Senate negotiators had not even discussed it.

Little did they know ... [cue evil laugh ouhaha.wav**]

Is Talking on Airplanes Noise Pollution?

The social rules for appropriate cell phone use in confined spaces such are still developing. Jagdish Bhagwati, professor of economics and law at Columbia University, has a clear opinion of what the rules should be on airplanes:

Fight the mobile phone invasion at 30,000ft, by Jagdish Bhagwati, Financial Times: Our right to peace and quiet is guaranteed by fining taxi drivers from India who honk as they drive: a habit acquired through years of dodging cycles, cows, cars and the carefree in the crowded streets of Calcutta and Karachi. Flights are not allowed to land in Washington DC beyond late evening... Yet, noise pollution, practised with abandon in your face and in your ears, is tolerated in enclosed spaces in buses, trains, restaurants and cinemas and is spreading like bird flu...

Sulfur Dioxide, Trash and Fireflies

I'm sitting in cool, drizzly Lewes, Delaware, reading the Cape Gazette.  Somehow my vacation is reminding me an awful lot of work.  Anyway, in the first 5 pages of the Cape Gazette are these environmental stories:

• The Indian River Power Plant is really dirty.
• Outdoor fires have been banned.
• Efforts are underway to to preserve the endangered Bethany Beach firefly (Photuris bethaniensis).
• County planners are trying to figure out how to keep developing while preventing air and water pollution problems.
• Rehobeth Beach trash is an eyesore.

No point here really--I am on vacation afterall--just an awful lot of environmental news for a biweekly paper.

Sustainability: Gore and Blood in WSJ

Today's Wall Street Journal has a commentary from Al Gore and David Blood (subscription required) that asks the question: when will we start accounting for environmental costs?

Gore and Blood begin by invoking the concept of sustainability, and the relationship between capitalism and sustainability. Sadly, they do not bother to define what they mean by either term, and as "sustainability" is a very wooly concept, they can proceed to use it as they see fit to suit their argument. The Wikipedia entry on sustainability, which is extremely thorough, offers some insight into the breadth, and subjectivity, of the various definitions of sustainability.