Environmental Economics

Gag me with a spoon

Don't click this link if you are sick of me pointing you to mentions of the climate change in NC study that I participated in, this time with the mention at Environmental Valuation & Cost-Benefit News.

At lunch on Friday after the conference where I presented a summary of this research it was mentioned that we did a lot of work for not so much in the way of monetary compensation. I thought, jeez, we probably would have taken the job for half that!

Reminds me of a funny story. Government guy calls me up fishing for a price on a research job. The number $40k is mentioned by the guy. Immediately, Im-effing-mediately, I blurt out "Oh, I'd do it for a lot less than that, say $10k." I proceed to not get the contract and then go about doing the exact same job for fun.

Funny. Yeah, ha-effing-ha.

Demand and supply in the ethanol market

Ethanol's boom stalling as glut depresses price:

The ethanol boom of recent years — which spurred a frenzy of distillery construction, record corn prices, rising food prices and hopes of a new future for rural America — may be fading.

Only last year, farmers here spoke of a biofuel gold rush, and they rejoiced as prices for ethanol and the corn used to produce it set records.

But companies and farm cooperatives have built so many distilleries so quickly that the ethanol market is suddenly plagued by a glut, in part because the means to distribute it have not kept pace. The average national ethanol price on the spot market has plunged 30 percent since May, with the decline escalating sharply in the last few weeks.

Shift your demand curve to the right and watch equilibrium price and quantity rise. Then, push your supply curve to the right far enough so that price falls (by 30%).

Why we need environmental economists

Here's an exercise.  Consider the following statements about the Chesapeake Bay for a few seconds:

• Fish kills—more than 40 in Maryland from June to early August alone—due to algae or oxygen-deprived dead zones, ranged in intensity from approximately 50 to more than 20,000 dead fish.
• An algal bloom that lasted for more than two months on the Potomac River eventually killed more than 300,000 fish.
• Fish kills of smallmouth bass and redbreast sunfish in the Shenandoah River system (four years running) have now jumped to another watershed - the upper James and its beautiful Cowpasture and Maury River tributaries.

Now before reading below the fold ask yourself:  Should we take action?

Ooh! Ooh!...We'll volunteer for the human trials

From the inbox (Men's Health Daily Dose)--I know it's irrelevant, but it's Friday and I wanted another excuse to post the picture over there --->

We all know that red wine has health benefits. A glass or two a night (no more!) can keep your veins and arteries supple, and provide protection from heart disease.

What about beer? It, too, has benefits. The latest evidence comes from The Journal of Neuroscience, which reports that beer can boost your memory.

Now for the bad news:

Unfortunately, the research was conducted with rats, so its usefulness isn't entirely clear.

Rats? Your telling me the researchers couldn't find volunteers willing to sign waivers?

I'm out the door

As I post this I'm late for a drive to Raleigh, NC to participate in the .5 part of the 1.5 day Triangle Resource and Environmental Economics Workshop tomorrow morning. I missed a bunch of great papers today, all co-authored by Triangle-esque authors. Tomorrow is focused on climate and I'm giving the first of three research presentations (my presentation can be found at http://econ.appstate.edu/climate in the right hand column), followed by a panel discussion (see below).

It should be way fun. The rest of the day includes lunch, a UNC-TV appearance with my co-authors (I'm doing it topless), dinner with friends (again, topless) and a drive back to Boone.

Wanna buy a horse?

If you've ever driven through central Kentucky you know that horse farms are an environmental amenity. Therefore, it is appropriate that we follow the Keeneland market (Yearling sale ...):

The September thoroughbred yearling sale concluded this afternoon at Keeneland with sharply lower prices.

The average fell 9.9 percent and the median price dropped 6.7 percent.

The $101,347 average and $42,000 median failed to top last year’s record average of $112,427 and median of $45,000.

This is an interesting market. If you don't believe me, read this paper and tell me why. Funny story: this authors of the paper asked me for comments. I read the paper, suggested they split it in two and send it to lower level journals. They ignored my advice and it was published in REStat. I tell this funny story in an attempt to dissuade future researchers from asking me for advice.

Carbon for sale

Baby steps towards a global carbon market:

Brazil's largest city sold millions of dollars worth of carbon credits at an auction Wednesday in a deal that experts said paves the way for developing countries to make money fighting global warming.

Brazil's Mercantile and Futures Exchange called Sao Paulo's sale of $18.5 million in carbon credits to Dutch-Belgian Fortis Bank the first such sale to be held on a regulated stock market and a significant step toward institutionalizing the carbon market.

Breaking news from The Carbon Tax Center

From the inbox:

Dear friends --

Earlier this evening, Rep. John Dingell, the senior Congressmember and a prime mover of U.S. energy policy, unveiled his draft carbon tax bill.

From the Env-Econ Department of Blatant Self-Promotion

Regular readers know we aren't shy about exposing ourselves--sometimes it's better to expose yourself than have someone else expose you--or something like that. Anyhow:

• Dani Rodrik provides evidence that there is a positive correlation between academic reputation and blog rankings for academic economists.  This is notable for Env-Econ for a couple of reasons:
  1. Env-Econ made the list of highest ranked econ blogs.  We're number 24 and by my view the highest ranked non-general econ blog.
  2. John and I have academic reputations--and they're really not that bad.  John's reputation--as measured by total citations to academic papers--is a little better than mine, but I attribute that to John's willingness to whore himself (academically speaking) for the right price...that, or John's older than me...or, John's papers are better than mine....crap, I'm depressed*.
• CurrencyTrading.net has published a list of the Top 100 Academic Blogs Every Professional Investor Should Read--#24** on this unranked list?  Env-Econ.
• Take a look at the current spotlighted research for the National Oceanic and Atmospheric Administration--see, I told you I had an academic reputation.

The 'bridge to nowhere' is going nowhere

I wrote that headline, realized there must be dozens of other identical headlines out there, used The Google and found this one from an Alaska TV station. Anyway, last week the State of Alaska decided the bridge money would be better used elsewhere (Alaska seeks alternative to bridge plan):

Some called it a bridge to the future. Others called it the bridge to nowhere.

On Friday, Alaska decided the bridge really was going nowhere, officially abandoning the project in Ketchikan that became a national symbol of federal pork barrel spending.

See below for my attempt at a benefit estimate for the $400 million bridge.