Environmental Economics

Carbon tax is a poison bill

Grist, making my case:

This may piss off some people I respect a great deal. Nonetheless, after hearing it in several off-the-record conversations in D.C. last week, I believe it's something that needs to be said publicly:

The 111th U.S. Congress is not going to pass a carbon tax. Calls for a carbon tax, to the extent they have any effect, will complicate and possibly derail passage of carbon legislation.

It's possible that a carbon tax (and/or cap-and-dividend) bill will be introduced. One or both might even make it to a full vote, though I doubt it. But they won't pass. If you want carbon pricing out of this Congress, cap-and-trade is what you're getting. It follows that your energies are best spent ensuring that cap-and-trade legislation is as strong as possible.

Them's the facts.

I went to DC!

And now I'm back. And here is my best story:

Standing in a Starbucks in Silver Spring, Maryland with ... let's say, Jim and Jack (not their real names) on Wednesday I get a small coffee for $1.75. I give the barista a $5 bill and the barista hands me three $1 bills and a $1 coin (shiny!). I turn to Jim and Jack and smugly say "Watch how honest I am." I tell the barista that he gave me a dollar coin when it should have been a quarter. When the cash register opens again the barista takes the dollar coin and hands me a $1 bill. I remark that I'm going to be really honest and hand back the dollar. Jack remarks that if he gives me four quarters I should just walk, hahahahah, etc ... the barista gives me four quarters and I walk! I still can't stop laughing.

Friday Beer Post

STIMULUS NOW!

Beer usually holds up better than other categories during tough economic times, said Benj Steinman, editor of trade publication Beer Marketer’s Insights, and that trend had been holding true during this recession for some segments of the industry. But the latest figures show the market is trending downward, perhaps accelerating as global economies continue to sputter, and relief seems uncertain.

Beer is “recession-resistant, not recession-proof,” Steinman said.

Recession-proof?  I thought beer was about 8 proof.

(rimshot)

McKinsey's crack at showing the world how to limit the damage from climate change

Marc Gunther puts it best:

The very brainy people at McKinsey & Co. have figured out how we can to cope with global warming.

All we have to do is:

1. Make buildings, cars, trucks, trains planes and factories a whole lot more energy efficient.

2. Generate 70 percent of global electricity from low-carbon fuels, including wind, solar, hydro, nuclear, and so-called clean coal which doesn’t (yet) exist.

3. Avoid the deforestation of 170 million hectares of forest, equivalent to twice the land area of Venezuela, and plant new forests on 330 million hectares of currently marginal land.

And what would that accomplish? Here’s what a new McKinsey report says:

"Cash for Clunkers"

I think I'm ok with this:

The second plan is more politely known as "fleet modernization." It combines economic as well as environmental goals in one package.

Under a bill introduced by Sen. Dianne Feinstein, D.-Calif., owners of older cars would get vouchers worth thousands of dollars toward the purchase of newer, more fuel-efficient vehicle. For the customer to get that cash, the car dealer would have to certify that the trade-in was getting scrapped and not resold. The car's vehicle identification number (VIN) would be tracked to make sure it never shows up on a vehicle registration again.

Crushing the old car has two benefits. First, it ensures that the consumer's purchase of a more efficient vehicle actually has a net environmental benefit. Second, it prevents a glut of used cars on the market, which would reduce trade-in values for new car buyers, which would cut into the sales incentive effect.

In addition to boosting car sales, the plan could save an estimated 80,000 barrels of oil a day, a spokesman for Feinstein's office said. Because it holds appeal for both environmentalists and the auto industry, the cash-for-clunkers idea seems to be generating the most discussion.

Good news for marine recreational fishing demand research

From FishNews (January 22, 2009):

NOAA to Create Saltwater Angler Registry in 2010

NOAA Fisheries Service has released a final rule to create a national saltwater angler registry of all marine recreational fishermen. The improved quality of recreational fishing data achieved through a national registry will help demonstrate the economic value of saltwater recreational fishing, and will provide a more complete picture of how recreational fishing is affecting fish stocks. This kind of information is essential to NOAA’s goal to end overfishing as required under the Magnuson- Stevens Fishery Conservation and Management Act.

The final rule requires anglers and spearfishers who fish recreationally in federal ocean waters to be included in the national saltwater angler registry by Jan. 1, 2010. NOAA will exempt anglers if they are licensed in states that provide complete information on their saltwater anglers to the national registry. NOAA had originally proposed that registration be required beginning Jan. 1, 2009, but based on public input decided to give states another year to put in place their own data collection systems. The registry is one component of the agency's new Marine Recreational Information Program, an initiative to enhance data collection on recreational catch and effort.

For more information, visit http://www.countmyfish.noaa.gov.

Economic impact of fisheries

From FishNews (January 22, 2009):

New Economic Report Finds Commercial and Recreational Saltwater Fishing Generated More Than Two Million Jobs 

U.S. commercial and recreational saltwater fishing generated more than $185 billion in sales and supported more than two million jobs in 2006, according to a new economic report released by NOAA Fisheries Service. The commercial fishing industry - harvesters, seafood processors and dealers, seafood wholesalers and seafood retailers - generated $103 billion in sales, $44 billion in income and supported 1.5 million jobs in 2006, the most recent year included in the report. Recreational fishing generated $82 billion in sales, $24 billion in income, and supported 534,000 jobs in 2006.

The report breaks down the sales, income and job figures for each coastal state. It also includes descriptive statistics on commercial fish landings, revenue, and price trends; recreational fishing effort, catch, and participation rates; and employer and non-employer establishments, annual payroll, and annual receipt information for fishing-related industries such as seafood retailers and ship and boat building.

This report is available online.

Cap'n Trade: Sulfur Dioxide Prices

I've been talking about emissions markets in my Master's level Environmental Econ course for the last week.  In case you're wondering, here's the trend in Sulfur Dioxide prices since the Acid Rain program was implemented.

 

UPDATE:  Sometimes the discussion in the comments section is worth moving to the main post:

Commenter Will: Tim, what's up with that price spike?

Me:  My understanding is that it was a perfect storm of demand increases:

1) Natural gas prices spiked in late 2005 (increasing the demand for coal-powered electricity)

2) Proposed CAIR rules allowed for 4-1 or 3-1 use of Title IV allowances to meet the CAIR cap (increasing demand for Title IV permits)

3) Rollback of New Source Review requirements decreased the cost of new coal fired plants--increasing the demand for permits.

It may be worth noting that Will is an EPA economist.  Now might be a good time to ask whether you should be worried that an EPA employee is asking me why prices spiked in an EPA run program.

I've been acknowledged!

From the inbox:

Hello, Expert Reviewers of the Climate Change Science Program Synthesis and Assessment Product 4.1  - As you may know, the report you reviewed for us in the Fall of 2007, Coastal Sensitivity to Sea-Level Rise: A Focus on the Mid-Atlantic Region, was released on January 16, 2009.
...
The pre-layout version of the report is posted at http://www.epa.gov/climatechange/effects/coastal/sap4-1.html

It's hard to regulate against stupidity

From the Washington Post:

The Georgia peanut plant linked to a salmonella outbreak that has killed eight people and sickened 500 more across the country knowingly shipped out contaminated peanut butter 12 times in the past two years, federal officials said yesterday.