Environmental Economics

All wet in June

I'm tempted to blame global warming.  Everyone else does.  Then again, I have really green grass.  And a lower than normal water bill. 

The Cell from Hell: VHS edition

From the Columbus Dispatch:

Armed with nets, a plastic dinghy and a 300-volt generator, a team of fish experts spent a day last week collecting fish from the Clear Fork Branch of the Mohican River, looking for a deadly disease called viral hemorrhagic septicemia [VHS].

Officials thought the contagious virus, which makes fish bleed to death, was contained in the Great Lakes.

But the discovery of VHS in the Clear Fork Reservoir in Morrow and Richland counties has changed all that. It's the first discovery in a U.S. waterway that doesn't drain to the Great Lakes.

"The bug is out," said Ken Phillips, a U.S. Fish and Wildlife Service microbiologist based in La Crosse, Wis. "In theory, it could make it all the way to the Mississippi River."

So what are the potential damages from an outbreak of a killer fish virus?  I'm glad you asked.

My first trip to Europe since college

In lieu of a daily post, check out the four I spew out Sunday afternoon, procrastinatingly, while trying to get my summer school syllabus ready:

1. Can't we all just get along?
2. I require my students to call me "Oh great one"
3. Gasoline in the United States is cheap
4. Existence Value

I was working on my syllabus a week in advance, not because I'm "ready Freddy" but because I'm flying to Amsterdam today, for a few days with friends before I attend the 8th Hamburg Symposium "Sport and Economics" on Thursday and Friday. I'm presenting "Scope and Limits of CVM to Measure the 'Intangible' Benefits of Sports Events" (co-authored with Bruce Johnson). Here is the PDF version of the PPT.

I also was able to procrastinate my syllabus and queue up posts for Tuesday, Wednesday and Thursday. I'm an excellent driver.

I'll try to post a trip update on Independence Day as I'm aware that daily readers will be on pins and needles. What did John do on Wednesday? Is he having fun? Jeez folks, get a life!

Existence value

Definition: Willingness to pay for the existence of an environmental resource without on-site use. It can be motivated by an ecological ethic, altruism toward others or bequests to future generations. Example:

One of Earth's last frontiers lies off the Carolina coast, on the cold, black ocean bottom 1,200 feet below the waves.

Scientists are just beginning to explore these deep-water coral reefs, possibly millions of years old, that stretch from North Carolina to Florida. They form pristine oases, alive with fish, crabs and creatures that one researcher said "look like Dr. Seuss went crazy down there."

The discoveries have also caught the attention of the Bush administration, which is reported to be interested in protecting 25,000 square miles of reefs off the Southeast as a national monument.

...

No more than 40 people have ever seen them.

Gasoline in the United States is cheap

I stole that title from the first line of a New York Times article sent to me via email (hat tip: G). Here is the reminder we might need (Savoring Bargains ...):

Not as cheap as American drivers would like, of course. ... Compared to prices in most other industrialized nations, however, the American national average of $4 a gallon is a bargain.

The chief reason for the disparity with the high-priced nations is taxation. Take away the taxes, and the remaining gas price is similar from place to place. ...

Gas taxes are used to encourage conservation, to finance roads and transit, and to fill other government coffers. Higher rates tend to insulate drivers from price spikes. On a percentage basis, Europeans have had to absorb far smaller increases in gas costs than Americans in recent years. They’re used to paying double what Americans do — or more — and they live accordingly.

Here is a graphic international comparison of gas prices.

I require my students to call me "Oh great one"

Via my Facebook account from a former student doing a stint in the Peace Corps:

how can one measure risk? for example - the risk of selling a perishable good vs. a non-perishable....would it have anything to do with possible future gains or is it only future losses???? If you can spare the time for a short explanation - please bestow upon me your infinite knowledge oh great one....ok sorry, i watched Willow yesterday.

My reply:

To answer your question, risk involves gains and losses. Risk is defined as probability times financial gain/loss so a measure of risk is the joint distribution of probabilities over the gains and losses.

If you could estimate the probabilities of certain events happening then that would be an OK measure of risk.

Did I get that correct?

Can't we all just get along?

I received two emails this past week. One from the Carbon Tax Center dishing on cap-and-trade and asking for money and another from Cleanenergy.org asking me, again, to sign a statement urging 100% auction of carbon permits.

I think both approaches are bull-headed. There is a lot of efficiency in between these two hardline positions. Cap-and-trade with a 90% auction? Not bad.

Carbon taxes in Canada

Mike Moffat likes the Liberal party's carbon tax but not the Green party's carbon tax:

Last week the Liberal Party of Canada and the Green Party of Canada released their carbon tax plan. It appears they're both applying to be let in to the Pigou Club.

I decided to review the merits of each plan.  See my reviews here:

• Liberal Party of Canada - Carbon Tax Plan
  
  
• Green Party of Canada - Carbon Tax Plan

What the heck?

From the inbox:

The Organizing Committee of the Second International Conference "The Austrian School of Economics in the 21st Century" is glad to announce that JOSEPH SALERNO, from Pace University, is going to participate in our event as a Guest Speaker.

Contact:
[email protected] ; [email protected]
(Please, send e-mails to both addresses to avoid reception problems)

WEBSITE: www.austrianeconomicsconference.org

Wait a sec'. How did I get on the Austrian Economics Conference listserv. I've never even been "down under."

An averting behavior study opportunity

Are there any environmental economists left in Greenville, NC? If so, get busy (Boil water ...):

Greenville Utilities has lifted a boil-water order for most of its service area, but officials say the cause of the contamination that led to the advisory may never be known.

The Daily Reflector of Greenville reports that the order was lifted about 5:20 p.m. Thursday for all areas except an isolated portion near County Home Road after tests from nearly three dozen sites revealed no contaminants.

Barrett Lasater, Greenville Utilities water and wastewater treatment plants manager, says the ban for the County Home Road area could be lifted Friday pending a second negative sample.

The utility issued the boil order around lunchtime Wednesday after testing verified fecal coliform bacteria was discovered in a sample taken from a County Home Road day care center. The discovery led the health department to order local restaurants to shut down.

At a day care center? Yuck. Happy parents? No.

Here is my attempt at the welfare loss (i.e., cost) of the boil water advisory:

• 75,000 residents in the Emerald City, most all in the GU service area (?)
• 31,250 households at 2.4 people per household
• 28 hours of boil water advisory
• Household averting expenditures at about $2/day (see an authoritative review paper)
• Total cost of the contamination episode = $62,500