Environmental Economics

Whales v. Development

For all those enamored with great debates between wildlife and economic development, this one in the Puget Sound regarding orcas should be fascinating to watch. There are so many interesting angles to it. Check it out. I'm curious what you all think.

J.S.

Economic Simplicity in the News

I came across this headline today:

Higher pay may help solve US trucker shortage

So simple, so obvious, so economic.  So I started thinking: What environmental economic headlines would I like to see?  The only requirement is they have to be glaringly obvious.  Here are my top five:

Willingness to pay and ecological economics

Willingness (and ability) to pay is the foundation of the economic theory of value. The idea is, if something is worth having, then it is worth paying for. The idea extends to environmental resources like water quality and natural resources like trees. The key assumption is that environmental values are anthropogenic. Whatever people think the environment is worth is what it is worth. Economic methods can be used to attach estimates of willingness to pay to changes in the level of environmental quality and natural resource use.

Environmentalists and natural scientists tend to dislike this idea since people are ugly, dirty, crass and never satisfied (an assumption of the neoclassical theory of value is "more is better"). About a decade ago a group of ecological economics challenged this concept of value in their paper The Value of the World's Ecosystem Services and Natural Capital.

Aich Eee Double Toothpicks

Commenting on Stavins on Discounting, Bob H says:

This comic really sums it all up:

Note: Click on the thumbnail for a popup window.

Source: http://www.unitedmedia.com/comics/dilbert/archive/dilbert-20060711.html

Property rights battle brewing in my backyard, almost...

I've talked before about the fairy-tale suburb where I live.  Green spaces, planned development, bike trails, city parks and pools, lots of fertilizer.  Well, there's a battle brewing over the location of a new interchange to access the 'industrial' part of the city.  Here's the full story...I'll give you the brief version.

It was only a matter of time...

Here it is, the inevitable "Man it's hot, it must be global warming!" article.  If there is anything my obsession with econometrics has taught me, it's that a single observation is indicative of...well...nothing.  In isolation, the current heat wave is no more evidence of global warming than a single negative drug test is evidence that Barry Bonds never did steroids.  But if you look at long term trends...

Happiness and the environment

Vanuatu is the happiness place on earth:

The tiny South Pacific Ocean archipelago of Vanuatu is the happiest country on Earth, according to a study published measuring people's wellbeing and their impact on the environment.

Colombia, Costa Rica, Dominica and Panama complete the top five in the Happy Planet Index, compiled by the British think-tank New Economics Foundation (NEF).

The index combines life satisfaction, life expectancy and environmental footprint -- the amount of land required to sustain the population and absorb its energy consumption.

This ranking may be bogus, for a number of reasons.

Rethinking Development Aid For The 21st Century

I recently discussed the four major shifts in public policy that would most benefit the natural environment (and both directly and indirectly human health). But I believe that poverty is actually the worst form of pollution and that environmentalists must also be the strongest advocates of poverty reduction. Probably the most significant anti-poverty measure would be a true move towards the elimination of trade-distorting policies such as tariffs, quotas, and corporate subsidies (yes, the WTO’s mandate is essential and should be vigorously supported).

Next in line would be a paradigmatic shift in development aid by all of the major aid institutions, especially the World Bank, USAID, and the United Nations. Aid as it is currently structured is not only largely ineffective and tremendously wasteful, but in many ways counter-productive. Here’s what needs to change and why:

"Orgy of ornithological enthusiasm"

From the WSJ's Evening Wrap (not the permanent link):

A federal judge applied the brakes to a $320 million irrigation project in Arkansas, ruling that the changes could alter the habitat of the ivory-billed woodpecker. The problem is, the woodpecker the court is protecting may or may not exist. Scores of volunteers beat the bushes in search of the elusive bird last winter but the hunt turned up not a trace. All the same, Judge William R. Wilson said his hands were tied. He had to presume the woodpecker exists and the federal agencies may have run afoul of the Endangered Species Act by not studying the habitat fully. The ivory-billed woodpecker is a rare bird indeed. The last confirmed sighting of the woodpecker in North America was in 1944 and scientists have long presumed that the species was exist. That is, until a kayaker claimed to have spotted one of the birds in eastern Arkansas. Since then, the area has been gripped by an orgy of ornithological enthusiasm, as people from all over the world flocked to catch a glimpse of the bird. With today's ruling, the hunt will intensify.

Lessee. If the benefits of the irrigation project exceed the costs, then the opportunity cost of this decision is at least $320 million. With almost 300 million folks in the U.S., we all must value a bird that may or may not exist by more than $1.07 in order for the benefits of this application of the Endangered Species Act to exceed the costs.

Is it existence value if we're not sure of the resource's existence?

An interview with Lomborg

I happened to look in my junk e-mail folder today and found a message with the subject line "economics, global warming, UN policy what more could you ask for?" from, get this, "Joshua." Clearly bogus, right?

Tim and John,

If you guys post this article I promise not to comment for a whole week. :)

http://www.opinionjournal.com/editorial/feature.html?id=110008626

Joshua Corning

Consider it done.

P.S. One* of the perks of being a micro-celeb (as they say of mid-level bloggers) is the free books. I'm getting the Lomborg book ASAP. Free of charge. I'll let you know what I think if my thoughts rise above the usual tripe.

P.S.S. Seriously, it was in my junk e-mail folder.

*The only perk.