Environmental Economics

Is carbon the Al Qaeda of elements?

It's in your feet, right? That's why we care about carbon footprints.

Seriously, Eric Roston seems to have written an important book. After all,

"people are using the word "carbon" with increasing frequency in conversations of increasing importance. And no one knows what it means." (Roston)

"That's why I no longer care." (Colbert)

Quote of the day

It's typical for air quality to improve in a slow economy because people spend less on goods and services, said John Whitehead, an Appalachian State University environmental economics professor.

As a result, there's less energy demand.

"That means less emissions," he said.

Yeah, what he said.

Talking with Jim Bruggers from my hometown paper on the phone this week:

Jim: Question ...

John: Blah, blah, blah ... I'm great ... blah, blah, blah ... I'm a good dresser ... blah, blah, blah

Jim (paraphrasing except the quotes): Yeah, that's what I thought, but I wanted to make sure from someone who is "kind of an environmental economist." Er, I meant "is an environmental economist."

John: You want to talk with someone who is kind of an environmental economist? Let me find Tim Haab's phone number ...

Actually, I was laughing too hard to come up with the last line until today.

The economic value of marine recreational fishing in the U.S.

From NOAA Fishnews:

Marine recreational anglers caught more than 468 million fish in 2007, down slightly from last year’s historic high of 475 million fish, but still the second highest recreational catch total in the last ten years. The overall number of fish caught and kept also declined slightly, from 214 million to196 million fish, according to NOAA Fisheries Service.

The 2007 data demonstrates a widespread turn toward "catch and release" among recreational anglers. While anglers are catching about 27 percent more fish than a decade ago, they are also releasing more fish than they keep. ...

Spotted seatrout was the most popular catch among marine recreational anglers. The species is caught in the Gulf of Mexico and the south Atlantic regions, which have the highest combined concentration of saltwater anglers in the nation. ...

Using the biggest willingness to pay per fish value from Johnston, et al. (Atlantic small game, weighted mean methodology), I declare that the economic value of marine recreational fishing in the U.S. in 2007 was $5.15 billion.

                                                 

The economic value of seafood consumption in the U.S. in 2007

From NOAA Fishnews:

The average American ate 16.3 pounds of fish and shellfish in 2007, a one percent decline from the 2006 consumption figures of 16.5 pounds, according to a study by NOAA Fisheries Service. Americans consumed a total of 4.908 billion pounds of seafood in 2007, ...

The nation imports about 84 percent of its seafood, a steadily increasing proportion. Imports accounted for only 63 percent of U.S. seafood just a decade ago. ... At least half of the seafood imported to the U.S. is farmed. Aquaculture production in the rest of the world has expanded dramatically in the last 30 years and now supplies half of the world seafood demand, according to the United Nations Food and Agriculture Organization. America’s aquaculture industry, though vibrant and diverse, currently meets only 5 to 7 percent of U.S. demand for seafood. Most of that is catfish. Marine products such as U.S. farmed oysters, clams, mussels and salmon supplies 1.5 percent of American seafood demand.

Using an unpublished estimate of the consumer surplus per seafood meal (CS = $20) and assuming 0.5 pounds per meal, I declare that the economic value of seafood consumption in the U.S. in 2007 was $196 billion dollars.

The world can (and must) innovate its way out of this slowdown

Kenneth Rogoff wrote a column in the Financial Times arguing "why the world cannot grow itself out of this slowdown." He has a lot to say about the global imbalances leading to the current crisis, and I mostly found myself nodding along, but then comes this zinger: high commodity prices are

prima facie evidence that the global economy is still growing too fast

and that

it will probably take a couple of years of sub-trend growth to rebalance commodity supply and demand at trend price levels (perhaps $75 per barrel in the case of oil, down from the current $124).

Here's my response from the FT's Economists' Forum:

High oil prices are not a sign that we have grown too fast, they are a sign that demand for oil has gone up. Yes, the two are closely related, but there’s a crucial degree of freedom in play: energy intensity.

High oil prices in the 1970s prompted a decrease in oil per unit of output, a trend that has continued to a lesser extent since then. It is no secret that climate change, one of the other major crises facing the world at the moment, will require us to make large strides in that direction. (McKinsey introduced the useful concept of “carbon productivity” and shows why it needs to – and, crucially, how it can – rise tenfold by 2050.)

Energy prices – and oil in particular – have risen so dramatically for a deep underlying reason, albeit one that’s possible to express in simple terms: demand has gone up, while the resources themselves are becoming ever scarcer.

The best answer to high oil prices is using less oil, not scaling back the use of capital and labour to bring oil prices down to “trend.”

Krugman makes a very similar point on his blog. An anonymous scribe over at the Economist seems to agree:

The cure for excess commodity demand is high commodity prices. ...

Inflation is a concern. The perpetuation of imbalances is a concern. Growth is not a concern.

Oddly, most other commenters at the FT's own Economists' Forum are just nodding along throughout.

Anybody want to go for a swim?

From the Columbus Dispatch:

                Lake Erie's public beaches failed so many bacterial tests last year that Ohio ranks second-worst among all states, according to a new report.

Health officials found unhealthful levels of bacteria in 18 percent of the water samples taken from Lake Erie's 7.3 miles of public beaches last year, according to a report released yesterday by the Natural Resources Defense Council.

Only Illinois was worse, with 23 percent of water samples at its beaches exceeding safe levels.

All together now, "We're #2! We're #2!"

Then there's this:

"It takes 24 hours to 48 hours to get (water sample) test results," [Scott Fletcher, parks operations manager for the Ohio Department of Natural Resources] said.  "When we post warnings, we're actually posting what conditions were like the day before."

I'm know I'm getting my bathing suit ready. You?

Quotes of the Day

Is industry jumping on board carbon pricing?

"We need to reaffirm the principle of predictability," George David, chairman of United Technologies Corp, told the House of Representatives Select Committee on Energy Independence and Global Warming.

"We need to say to our world that we are going to have a cost of carbon, whether it's cap-and-trade or a carbon tax," he said in a hearing in Hartford, Connecticut, where United Tech, the world's largest maker of elevators and air conditioners, is headquartered. "There's got to be an understanding that the cost of energy is going to be high for a long time."

David declined to back a particular approach for assigning a cost to emissions of carbon dioxide, the primary greenhouse gas associated with global climate change.

But John Rice, a General Electric Co vice chairman, said GE sees cap-and-trade as the way to go.

GE, the second-largest U.S. company by market value, makes both energy-producing devices from equipment for coal plants to windmills and energy-consuming products like jet engines.

"We believe that a cap-and-trade program can provide a reliable market pricing mechanism for carbon," Rice said.

Coincidence? You be the Judge

July 22, 2008:

An official sister-in-law of EnvEcon moves from Manhattan to Fullerton, California to begin professing Psychology at Cal-State Fullerton*.

July 29, 2008:

The magnitude 5.4 earthquake in metropolitan Los Angeles, California, caused no serious damage or injuries, but experts say it's a reminder that the "Big One" could happen at any time.

*Dr. Nancy Ryba begins teaching at Fullerton in the fall.  If you are in the Fullerton area, she could use some friends.  But don't believe anything she says about the smartest and best-looking (and only) brother-in-law she has.

The effect of gas prices on sharks

The economy is not the only thing feeling the sharp bite of high gas prices. Sharks are taking a hit too, [Randy] Gregory [marine biologist with North Carolina Division of Marine Fisheries] said.

The jump in gas prices has more people looking to fish closer to shore, in shark territory.

Source: New regulations ...

Into the long run?

The NYTimes on energy prices:

Gasoline has slipped below $4 a gallon and is dropping fast as Americans drive less.

If the cause and effect implied is true people are making some long run decisions which is putting the U.S. on a new short run demand curve ... see: Demand vs Quantity Demanded. Dang! But, realistically, the long run isn't permanent (e.g., Chrysler K-cars to SUVs in the 1980s to 1990s).