Environmental Economics

This is really scary

I continue to cringe at the SuperFreakonomics reviews, but I can't stop reading and reposting them. Is that admission a cry for help?

David Roberts at Grist:

Steven Levitt and Stephen Dubner are the latest to do it, in their new book Superfreakonomics. Their chapter on climate change sits awkwardly with the rest of their work; the original Freakonomics was based on Levitt’s academic work, real data and models the authors used to make ostentatiously counterintuitive points about perverse economic incentives. But Levitt did no original work on climate. The chapter’s not about economic incentives. There’s no evidence of deep or sustained engagement with the literature or previous research on the subject. The authors just high-stepped in, cast a cursory glance around, and started condescending to the people involved in it (and stepping on rakes).

Why? What leads people to think that entire areas of climate science and policy, the subject of close study by thousands of very smart people all over the globe every day, can be overturned with facile points of logic and Silver Bullets Nobody’s Thought Of?

I read the section of the climate change chapter on negative externalities. It is good, except for one thing. I don't get how a stray bullet, intended for a drug dealer, that hits an innocent bystander is a negative externality. Negative externalities are the result of voluntary transactions that harm someone not participating in the transaction. Next up is the geoengineering section!

Image source: http://i.ehow.com/images/GlobalPhoto/Articles/4537453/pumpkinsick-main_Full.jpg

Real climate scientists aren't happy

An open letter to Steve Levitt at the RealClimate blog:

... if it has come to pass that we can’t expect the William B. Ogden Distinguished Service Professor (and Clark Medalist to boot) at a top-rated department of a respected university to think clearly and honestly with numbers, we are indeed in a sad way. ...

May I suggest that if you should happen to need some friendly help next time you take on the topic of climate change, or would like to have a chat about why aerosol geoengineering might not be a cure-all, or just need a critical but informed opponent to bounce ideas off of, you don’t have to go very far. For example…

But given the way Superfreakonomics mangled Ken Caldeira’s rather nuanced views on geoengineering, let’s keep it off the record, eh?

Your colleague,

Raymond T. Pierrehumbert
Louis Block Professor in the Geophysical Sciences
The University of Chicago

I finished reading the prostitution chapter (it was great, but "patriotic prostitutes"? that's a reach) and the global cooling section of the climate change chapter. I must agree with the critics, it really does present global cooling as the scientific consensus, implying that the current scientific consensus might be just as nutty.

$230,769 per job

From CNN.com:

The largest stimulus program in the nation's history has created or saved at least 650,000 jobs, according to a report released by the Obama administration on Friday.

Based on approximately $150 billion in spending from the $787 billion recovery package, the tally is the first broad, concrete look at the stimulus program's impact on the economy. The numbers are drawn from tens of thousands of reports from state and local recipients as well as private companies.

We're well read

From the inbox:

Today the Washington Post had an article on the tension at Virgina Tech between those who want to tailgate for Thursday night games and, um, academics. My favorite quote: ' having a prominent football team "does great things for the university, much more so than somebody discovering something in their PhD dissertation, which five people read. That's true, and we're going to have to live with it." '

HAHAHAHAHA. I will bet you money that no more than five people have read my dissertation, and that's generously assuming that my committee did.

I have an AGW replica jersey

If you disagree with the thrust of the SuperFreakonomics climate change chapter, are you a global warming fanatic? Here is the Freakonomics blog post in my Google Reader:

[Steve Levitt] wondered if he was in for a Jim Cramer-type beatdown. But it turns out that Jon Stewart doesn't appreciate the global-warming fanatics either, and gave SuperFreakonomics a thumping endorsement.

Here it is on the Freakonomics blog:

He wondered if he was in for a Jim Cramer-type beatdown. But it turns out that Jon Stewart gave SuperFreakonomics a thumping endorsement.

I nominate Tim, do you have any better ideas?

From the RESECON listserv:

RESECON readers are invited to a Union of Concerned Scientists' event, "Taking Action on Climate Change: An Economists' Weekend," in Chicago, IL.  The event will start with dinner on Friday, November 13, and continue until 4PM on Sunday, November 15, 2009.  The weekend is open to PhD and PhD candidate economists.  Because all roads to climate action lead through the US Midwest, we particularly welcome participants from MN, MI, IA, OH, IL, WI, and MO.  ...

Tim is from The OSU and ...

Do you care about climate change? Would you like to contribute to finding solutions to address it? Join us and fellow economists for a two-day workshop featuring a skills-building session on communicating with the media and legislators, an overview of the current federal climate policy landscape, and discussion on how economists can effectively and strategically call for strong policy.  At the end of the weekend, you will be able to choose from a number of ways to add your voice to debate.

Tim is a real clunker with the media, he could use some skills-building ...

Dr. Michael Hanemann, Professor of Economics from the University of California, Berkeley will be joining us for an address on Friday evening and a session on Saturday on how economists can contribute to the policy discussion on climate change and clean energy.

Dr. Geoffrey Heal, Professor of Economics at Columbia University, will give the keynote address on Saturday evening.

True heavyweights. Tim could learn a lot from these guys...

We hope you will be able to join us for this weekend. We are happy to provide hotel accommodation and meals, and will reimburse participants for reasonable travel expenses. To ensure the most effective workshop, we are limiting the size to no more than 20 participants, so please respond promptly.

Tim, meet Mr. Freebie ...

Finding solutions for climate change is a top priority for UCS. We already work with climate scientists all over the U.S. and are eager to engage similarly with economists. We want to learn from your research and analysis, as well as to share our policy-relevant expertise. Please note that we seek your knowledge and interest, rather than your endorsement of any particular policy or piece of legislation.

Tim does research and analysis ...

So, I nominate Tim. If you have any better ideas about Midwestern economists who might benefit from a weekend with the UCS and climate economists then drop that name in the comments section.

The simple math of green jobs

From Reuters:

Climate change presents a global crisis, but "can also provide an economic opportunity of vast proportions," Dan Reicher, director of climate change initiatives at Google told the Senate Committee on Environment and Public Works.

Besides creating new jobs in solar, wind and geothermal power, he said national regulation of greenhouse gases could help push investments to develop an efficient and robust power grid that would combine with information from the Internet.

That would create new jobs in new technologies across a range of companies, he said. The Web could send information from the "smart grid" to help consumers save money on power bills during peak demand periods and help them determine the cheapest time to charge electric cars that would cut emissions and oil imports.

I agree.

But Bill Klesse, the chief executive of oil refiner Valero Energy Corp, told the panel the bill would cut jobs in his industry because it would force companies to buy billions of dollars worth of carbon credits. He said the costs would hurt refiners who have already lost jobs as the recession cuts fuel demand.

I agree with that too.

Let's explore the math Env-Econ style (That is, let's make a simple problem complicated but witty--that's what we academic-blogging-types do)...

Surprising macroeconomic news

From the inbox:

Output of goods and services grew at a 3.5 percent annual rate, faster than economists expected, according to preliminary figures from the Bureau of Economic Analysis. Even so, it will be months before job-seekers begin to feel the benefits.

Parts of the stimulus arrived around the time that growth began. If you fully attribute the growth to stimulus spending then divide the additional GDP in the 3rd quarter by the additional stimulus money allocated I'll send a bumper sticker to the first reader than posts a link showing this being done in the comments section). The other extreme is to say that the 3.5% growth would have happened anyway and the stimulus spending was unnecessary.

It should be fun to read the blogs (i.e., Krugman, Mankiw, Thoma) today.

I'm in Charleston! And not having fun.

Got in at midnight and will be in a hotel conference room (undisclosed location) from 9 to 4 for an SSC meeting:

The purpose of this joint meeting of the SSC and the SSC Selection Committee is to hold an open discussion on SSC responsibilities, Council needs and expectations, and relevant policies. The first step is a review of current policies and formal expectations. The Committees should consider developing recommendations for any modifications to the current policies to increase clarity and understanding.

Red snapper stock assessments (process) continue to be the big issue.

I hope that punk enjoys his latte

I'm engrossed by SuperFreakonomics (up to page 21). It is a page turner* but I can't help wonder if it is all quite right. For example, at this point in the book, the drunk walking result is an assertion based on a dubious assumption:

If we assume that 1 of every 140 of those miles are walked drunk--the same proportion of miles that are driven drunk--then 307 million miles are walked drunk each year.

Doing the math, you find that on a per-mile basis, a drunk walker is eight times more likely to get killed than a drunk driver.

Why would miles walked drunk be the same as miles driven drunk? If the proportion is less then a drunk walker is less than eight times more likely to get killed than a drunk driver. It might even be safer to walk drunk. What is needed is the evidence ("statistics don't lie"). I hope that I'll find it in later pages.

Update: I forgot to mention that the endnotes mention that  the walking drunk item was suggested by the "brilliant economist Kevin Murphy" but there is no reference for the 1 in 140 assumption.

Note: I went to high school with a Page Turner (not really, but I'm sure someone did, let us know in the comments section).

Personal note: I had my wallet stolen out of my gym locker today as my lock lay helplessly in my gym bag. I canceled my cards and proceeded to the DMV to get a new drivers license when my phone rang. A nice fellow had found it in a bathroom stall (ugh). Nothing was missing except all of my liquid wealth -- $3.