Environmental Economics

Park(ing)

From env-econ reader Allen Claxton:

I thought this was a nifty little thing, with a curious env-econ hook:

http://gristmill.grist.org/story/2006/9/22/16496/7423

Temporary parks set up in on-street parking spaces. The env-econ hook is that they depend on people feeding the meter to keep the spot.

User fees! We love 'em.

As if they didn't already face an uphill battle...

Today's obvious economic headline comes from the Washington Post...Spinach Growers Face Losses:

The E. coli outbreak, which was reported a week ago, has led to the leafy vegetable's banishment from restaurants and dinner tables across the country and is threatening the spinach industry with severe damage. Losses are estimated at up to $100 million if the crisis lasts just a month, and the industry has been hoping for a quick resolution in order to stem long-term damage.

[...]

"This is going to kill the spinach industry for who knows how long," said Marion Nestle, a professor of nutrition, food studies, and public health at New York University. "The idea that salad greens have become a source of E. coli is very shocking, and it means we have a real problem in the food system. This is very serious."

Policies involving avoiding premature deaths

If you are teaching environmental economics this semester you might be approaching that touchy time of the semester when the subject is valuing lives*. If you need an example for why this is important, yesterday's soot rule decision by EPA admin Johnson is a good one (E.P.A. Chief Rejects ...):

The Environmental Protection Agency’s administrator on Thursday rejected the recommendations of his staff — and an unusual public plea from independent science advisers — choosing instead to tighten only one of two standards regulating the amount of lethal particles of soot in the air.

The short-term daily standard, intended to control acute exposure to the minute particles, was cut nearly in half. But the annual standard, which affects chronic exposure, remains at its original 1997 level.

Richard Branson's Virgin Pledge

From cnn.com:

Billionaire British businessman Richard Branson Thursday committed $3 billion over the next 10 years to combating global warming.

"We are very pleased today to be making a commitment to invest 100 percent of all future proceeds to the Virgin Group from our transportation interest, both our trains and airline businesses, into tackling global warming," Branson told a news conference at the Clinton Global Initiative in New York.

Based on this I should be lead to believe that investing $3B in profits from Virgin's airline and train lines in 'tackling global warming' will do more to reduce global impacts than just shutting down the Virgin airline and train line and foregoing the $3B in profits?

Just wondering.

Climate Skeptics: Part II

Professor Gray is certainly controversial (Colorado State professor disputes global warming is human-caused):

Global warming is happening, but humans are not the cause, one of the nation’s top experts on hurricanes said Monday morning.

Bill Gray, who has studied tropical meteorology for more than 40 years, spoke at the Larimer County Republican Club Breakfast about global warming and whether humans are to blame. About 50 people were at the talk.

Gray, who is a professor at Colorado State University, said human-induced global warming is a fear perpetuated by the media and scientists who are trying to get federal grants.

“I think we’re coming out of the little ice age, and warming is due to changes to ocean circulation patterns due to salinity variations,” Gray said. “I’m sure that’s it.”

Gray’s view has been challenged, however.

The rest of the story is below the fold.

Climate Skeptics: Part I

From the WSJ (Exxon Reviews ...):

Exxon Mobil Corp., which has sparked criticism for funding groups that challenge the scientific validity of concerns about global warming, is reviewing whether it will continue to fund some of those groups.

Exxon spokesman Mark Boudreaux said yesterday the company's decisions about which outside groups to fund for the rest of 2006 and for 2007 "are under review." The Competitive Enterprise Institute, one past recipient of Exxon funding that has been vocal in questioning climate science, hasn't received any money from Exxon in 2006, he said.

/.../

Exxon's statement follows a letter released by the Royal Society, Britain's independent scientific society. The letter said that in a July meeting between Royal Society and Exxon officials, society officials criticized Exxon's funding of "organizations that have been misinforming the public about the science of climate change" and Exxon officials responded that the company "would not be providing any further funding to these organizations." The letter was reported yesterday in the Guardian newspaper.

Here is the story in the NYTimes on the letter.

I don't want to get into a fight with the Environmental Defense Fund but ...

... but. (FYI, I have much respect for ED, the environmental group formerly known as Prince, er, the Environmental Defense Fund, their president and their economists [who were instrumental in making cap and trade a relatively mundance environmental policy instrument {and that's a good thing}]). In a post on California's Global Warming Solutions Act I boldly went where most economists will always go:

I don't buy into the idea that the GWSA will be costless. Nothing ever is, right?

Eric Haxthausen, an economist at EDF, commented (and I received a nice email from him):

How is it possible? First, evidence suggests that aggressive implementation of energy efficiency measures can reduce energy demand at a “negative” cost. BP added nearly $650 million in net present value to the company's bottom line while achieving reductions of 12.8 million metric tons of GHG emissions, and DuPont reduced its emissions by some 65 million tons, saving the company $2 billion.

I commented on these stats, reported in BusinessWeek, back in December in a post inanely titled Free Lunch Money. In short, I don't believe the evidence that energy efficiency, prompted by government regulation, increases profits.

We interupt this nonsense for breaking news...

Deet, da, dee, dee, da, dee (that's the sound of the breaking news blotter):

California filed a global warming lawsuit on Wednesday against Ford Motor Co., General Motors Corp., Toyota Motor Corp. and three other automakers, charging that greenhouse gases from their vehicles have cost the state millions of dollars.

Here's the story.  I'll follow up with thrilling analysis later.

Tuesday Morning Quarterback, The WSJ Numbers Guy and Economic Forecasting

Last week, John challenged me to comment on the WSJ Numbers Guy column on the accuracy (or inaccuracy) of weather forecasts.  In his columns, the Numbers Guy writes:

It turns out that, despite the city-by-city variations, the national average accuracy ratings for the five major providers are all pretty close.

and

Forecasts are considered accurate if they come within three degrees of predicting the high and low temperatures for a given day.

In John's words "If you don’t post something on this I’ll be very disappointed."  Never being one to disappoint, here we go.

Carbon offsets lead to more than carbon neutrality

Here is part of the Carbon Offset entry at Wikipedia:

A carbon offset zeros out (offsets) all or part of the carbon dioxide emissions of a party, by reducing the emissions -- or increasing the carbon dioxide absorption -- of another party. This reduces net greenhouse gas emissions with the aim of combating global climate change. Effectively offsetting the emissions of an activity makes that activity "carbon neutral".

/.../

Offset activities can vary widely; the most frequent are planting trees, followed by various energy conservation activities, sometimes certified as CDM credits, but may also include buying allowances from the EU ETS. Carbon offset providers often provide a "carbon calculator" for individuals to estimate the carbon dioxide emissions arising from their consumption of electricity, petrol, air travel, etc. - a sort of ecological footprint for global warming.