Environmental Economics

An unbiased look at the rebound effect

About a week ago I did a 15 minute benefit-cost analysis of new CAFE rules. Here is a key part of it:

Concerning new fuel economy rules ...:

The administration says its plan will save 1.8 billion barrels of oil and cut 992 million tons of global-warming gases over the program's lifetime.

If the price of a barrel of oil is about $100 "over the program's lifetime" (61% greater than yesterday's price) then the savings in oil expenditures is $180 billion (about 1.3% of annual GDP).

This week the WJS's Numbers Guy looks at the rebound effect and states:

The EPA has yet to say how it arrived at a projected savings of 1.8 billion barrels of oil under the new mileage rules.

Yikes! However ...

Former President Clinton on green jobs in Spain

From Environmental Capital:

From his speech transcript (ellipses in the original):

Lot of controversy in Spain now. You’ve become, you know, one of the three leading countries in the world in virtually every clean energy category, second behind Germany in the production and the deployment of solar energy… thanks to solar thermal as well as photovoltaics, third behind the United States and Germany in the perce.. in the sheer volume of wind energy generated and now you’ve got a study that says that your commitment to clean energy, I saw it in the press today, has cost you twice as many jobs as it gained you. I don’t agree with that by the way, and I can… I’ll, anybody wants to know why, I’ll tell you why I don’t agree with it. But the point is, you have to ask yourselves…. you young people…. if you want to avoid global warming, and you want Spain and Europe and the world to continue to grow, knowing that it’s expensive to change the way you produce and consume energy, well what are you going to do about that? Because these three problems could wreck your future.

Actually, having heard what some other academics and energy types have to say, we’d like to take the former president up on his offer: Why doesn’t he agree with the green-jobs study that says renewable-energy subsidies have destroyed twice as many jobs as they’ve created?

By the way, my position is still that it makes little sense to talk about "jobs" when debating environmental policy. In short: jobs are the wrong metric.

 

Please provide your own joke in the comments section

Best joke gets a free DriveLess! bumper sticker:

The global climate challenge may have been on the daytime agenda during the recent World Business Summit climate conference in Copenhagen, but in the evenings many businessmen, politicians and civil servants are reported to have availed themselves of the capital’s prostitutes.

No mention of economists.

Another book received from RFF Press: The Emergence of Land Markets in Africa

From RFF Press:

The Emergence of Land Markets in Africa: Impacts on Poverty, Equity, and Efficiency
Stein T. Holden, Keijiro Otsuka, and Frank M. Place, editors

December 2008

“This book deals systematically and competently with the equity and efficiency implications of land markets in sub-Saharan Africa. The rigorous empirical analyses provide important insights to guide decisionmakers and development partners in formulating policies and investments to promote economic growth and poverty alleviation in Africa.”--Gershon Feder, Research Manager for Rural Development in the Development Research Group, the World Bank

Here's the deal: I'll send you the book if you read it and provide us a review. If interested, please send me an email.

Update: The book has been claimed!

Note: We have some reviews overdue ... let me know how these are going ... please!

Book received from RFF Press: Taming the Anarchy

From RFF Press:

Taming the Anarchy: Groundwater Governance in South Asia
Tushaar Shah
December 2008

"Likely to have a significant impact, both on decisionmaking and future research in the region. The book is the best assessment and analysis of irrigated agriculture in South Asia that exists...South Asia can be seen as a proving ground for the groundwater boom and bust cycles that will inevitably play themselves out in other regions." --Christopher Scott, University of Arizona

"Very likely to be a book that will significantly shape the debate on India's irrigation economy, particularly the groundwater economy. The book will push many people to think 'outside of their box.'" - Peter P. Mollinga, University of Bonn

Here's the deal: I'll send you the book if you read it and provide us a review. If interested, please send me an email.

Update: The book has been claimed!

Note: We have some reviews overdue ... let me know how these are going ... please!

The environmental economic litmus test

From Environmental Capital (Sotomayor ... the cost of environmental protection):

Now that Sonia Sotomayor has gone from presumptive front-runner to official nominee for the Supreme Court, what’s that mean for environmental issues? ...

In 2007, Ms. Sotomayor sided with the fishes and against power companies and the Environmental Protection Agency. That is, in Riverkeeper vs. EPA, she argued that the EPA can’t weigh costs and benefits in deciding what the “best technology” is for protecting fish that get sucked into power plants.

In a nutshell, there’s no point in tallying up the marginal costs of extra environmental protections when Congress has already decided they’re worth it. ...

In April, the Supreme Court overturned that decision in a 6-3 ruling; justice David Souter, who Ms. Sotomayor would replace, was one of the dissenters. The Supremes ruled that the EPA could in fact tally up the costs of environmental protections. “Best technology” means the technology that most effectively ensures environmental protections, not that would provide environmental protections at any cost.

In effect, this ruling destroyed thousands of green (consulting) jobs for environmental economists. Do we really want a job destroyer on the Supreme Court?

Sending out the Coase-Signal

From the MailOnline:

When Stephen Munday spent £20,000 on a wind turbine to generate electricity for his home, he was proud to be doing his bit for the environment.

He got planning permission and put up the 40ft device two years ago, making sure he stuck to strict noise level limits.

But neighbours still complained that the sound was annoying - and now the local council has ordered him to switch it off.

Officials declared that the sound - which Mr Munday says is 'the same pitch as a dishwasher and quieter than birdsong' - constituted a nuisance, and issued a Noise Abatement Order...

The turbine generated five kilowatts of electricity a day - the equivalent of boiling 300 kettles - and provided two-thirds of the family's energy needs. It also saved them an average of £500 a year in electricity costs.

The wishful free-market economist in me asks: Where's Coase when we need him?  Doesn't this seem like a perfect case where bargaining should work (and didn't)?

The practical (cheap?) home-improvement do-it-yourselfer in me asks:  What is the useful life of a personal wind turbine?  Saving 500 pounds a year, the turbine is going to have to have a useful life of over 40 years to recover the 20,000 pound investment.

The idiot in me asks: How do you get a pound symbol from a U.S. keyboard?

It's an honor just to be nomina...crap, who am I kidding? We got hosed!

From my snailmail box (forwarded by our esteemed nominator):

On behalf of the AAEA [Agricultural and Applied Economics Association] Awards Committee...I regret to inform you that after a very challenging deliberation process, your nominees, Tim Haab and John Whitehead, were not selected by the AAEA Awards Committee to be honored this year...

Again, thank you for taking the time to honor your colleagues with a nomination for the Quality of Communication Award...

For background, Env-Econ was nominated for the AAEA Quality of Communication award.  Take a look and judge for yourself whether we got shafted.

Check out our new banner image!

 

This picture was taken from the Cliff Walk in Newport, RI. If you have any problems in your browser, please let me know.

And here is a link to the env-econ photo album with some more pics. Here is a link to the view from my hotel room where I spent some time during the NAAFE Forum.

My latest post at The Energy Collective

Begins like this:

I’m serving on a panel of environmental economists at the September 2009 “Business and Environmental Ethics Conference” hosted by the Walker College of Business at Appalachian State University (here is the link to last years ethics conference [I'm hoping I'm able to post a video afterwards!]). Not knowing anything, at all, about ethics (or ethical behavior [smug wink]), I begin reading, er, skimming the Stanford Encyclopedia of Philosophy entry on Environmental Ethics. I learned a number of intrinsically useful things, including the difference between instrumental value and intrinsic value.

“Things,” such as environmental and natural resources, can have instrumental and intrinsic value. Instrumental values are generated from our use of these things. In contrast, things have intrinsic values if they have value in and of themselves. My 10 minute talk in September will focus on environmental ethics and benefit-cost analysis – a tricky subject. ...

Read the whole dang thing here: http://theenergycollective.com/TheEnergyCollective/41517.