Environmental Economics

My latest (and last) exclusive post at the Energy Collective

Titled, Preliminary results from an offshore wind farm / recreation survey in North Carolina, begins like this:

In an ongoing study, Craig Landry (East Carolina University), Tom Allen (ECU), Todd Cherry (Appalachian State University) and myself (ASU) are trying to estimate the impacts of coastal wind farms on recreation and tourism.

And ends like this:

The take home message seems to be that coastal recreation and tourism won’t be creamed with wind farms. More results are sure to follow, so stay tuned.

Picture of the Day: Global warming my a$$ edition

It's March the friggin' 26th and it was 70 degrees 2 days ago!

 

I thought conservatives were opposed to government interference in markets

I'm fairly conservative when it comes to letting markets do their thing.  I don't like it when governments interfere with and regulate fairly well-functioning markets.  That's why it bugs me a little when conservatives blame the President for simple fluctuations in markets that are a result of basic economic adjustments*.  Like this:

Gas up $1 a gallon on Obama's watch: Pressure rises for exploration

Gas prices have risen $1 since just after President Obama took office in January 2009 and are now closing in on the $3 mark, prompting an evaluation of the administration's energy record and calls for the White House to open more U.S. land for oil exploration...

It's not the President's job to 'watch' prices.  Prices in gas markets adjust to changes in supply and demand.  Say, for example, the costs of an essential input, like oil, increases while the demand for gas increases in rapidly developing countries. 

John B. Townsend II, a spokesman for AAA Mid-Atlantic, said price increases are a result of the cost of crude oil, thanks to a decision by the Organization of the Petroleum Exporting Countries not to raise production even as economic growth in countries such as Russia and China spurs more demand.

"From all indications, we're going to see $3 gas again this summer," he said.

Hey, that's what I said. 

But, I think the President gets it:

The Obama administration also blames the market for the high prices and argues that its record for expanding energy development has been solid over the past year.

"The prices are set by the world market," said Kendra Barkoff, a spokeswoman for the Interior Department, which manages federal lands that would be leased for oil exploration.

IMPEACH!

Yes, I know this is just politics, but still, the economic point is relevant. 

A paper I've been waiting for

Ready, Champ and Lawton, Using Respondent Uncertainty to Mitigate Hypothetical Bias in a Stated Choice Experiment -- Ready et al. 86 (2): 363 -- Land Economics

In a choice experiment study, willingness to pay for a public good estimated from hypothetical choices was three times as large as willingness to pay estimated from choices requiring actual payment. This hypothetical bias was related to the stated level of certainty of respondents. We develop protocols to measure respondent certainty in the context of a choice experiment, and to calibrate hypothetical choices using these certainty measures. While both the measurement of respondent certainty and the use of certainty measures to calibrate responses are complicated by the multiple-choice nature of choice experiments, calibration successfully mitigated hypothetical bias in this application.

via le.uwpress.org

Seriously: one of the knocks on choice experiments was that they asserted a lack of hypothetical bias in the willingness-to-pay estimates.

I'd like to go ahead and read the paper but I canceled my Land Econ subscription last year (after 20+ years of subscribing) when my university paid for it. Now my university is logged in at the website but I'm unable to retrieve it. AAAAGGGGHHHH!!!!

One year of clean energy investment does not a trend make...so says me...in the newspaper

That whooshing sound was China passing the United States in clean-energy investment last year, a potentially ominous sign for business leaders who hope to establish a domestic foothold in green manufacturing, according to a new report.

"There are reasons to be concerned about America's competitive position in the clean-energy marketplace," said the study, issued by the Pew Charitable Trusts.

Worldwide investment in clean energy, a majority of which went to solar- and wind-power projects, was up 230percent since 2005.

About $162 billion was invested last year. China passed the U.S. for the top spot with $34.6 billion. The U.S. posted $18.6 billion and the United Kingdom, $11.2billion.

"China is emerging as the world's clean-energy powerhouse," said Phyllis Cuttino, global-warming campaign director for the Pew Environment Group, in a conference call.

But Tim Haab, an Ohio State University environmental economist, doesn't give much credence to just one year of China's results.

"Year-to-year fluctuations don't hold much weight if you want to know what's going on," he said. "To me, the bigger question is, 'Are we investing in the right places?'"

He doesn't know of anyone who has a good answer to that question. For example, there is major disagreement about the relative merits of different technologies, such as wind and solar power.

via www.dispatch.com

Of all the dumb things I may have said in the interview, that may have been the least dumb. So I guess that's a good thing.

If I wanted to be viewed as average, I'd stay home everyday

To the right is my Student Evaluation of Instruction for my latest offering of PhD Applied Econometrics, er Quantitative Methods in Agricultural, Environmental and Development Economics (click for a bigger picture--ratings are 1-5 with 5 being bestest). 

Does anyone else find it strange that students would rate me above average in every category and then find me surprisingly average overall? 

In related news

The states participating in the Regional Greenhouse Gas Initiative (RGGI) today announced the results of the first quarterly auction of carbon dioxide (CO2) allowances in 2010. The auction, held Wednesday, March 10th, yielded $87,956,944.56 for investment in the clean energy economy.

All of the 40,612,408 CO2 allowances for the first three-year control period (2009-2011) offered in Wednesday’s auction sold at a price of $2.07.

...

Proceeds from all auctions held to date now total more than $582.3 million. States are investing proceeds to improve energy efficiency and accelerate the deployment of renewable energy technologies, creating thousands of jobs.
...
Across the region, businesses are hiring workers to implement the growing variety of energy efficiency and renewable energy programs funded with RGGI CO2 allowance proceeds.

In particular, companies that conduct energy audits and install home weatherization measures are expanding to meet the demand for efficiency services. The workforce at the Center for Ecological Technology, a company that conducts RGGI-funded efficiency work on behalf of electric utilities in New England, has doubled over the last year, from 50 to 100 full-time employees, according to Laura Dubester, the company’s Co-Director. New positions range from field technicians and quality control personnel to IT and customer service specialists.

via www.envirovaluation.org

In related news, higher electricity costs (e.g., $583 million) decreases product supply and labor demand. Reduced labor demand actually reduces employment in energy-intensive sectors.

However, let's don't mention that because it interferes with the propaganda machine.

To, too and two

At the end of my wonderful lecture (I may have overheard a student mention "inspiring") I passed out journals and asked students to find one violation of McCloskey's writing rules (this is a 10 minute exercise; i.e., not difficult at all). Here is one response I received:

Review of Agricultural Economics page 24, second and third paragraphs:

The author makes these paragraphs difficult to read by including to many variables within two few of sentences. The use of semicolons and shorter sentences would improve this.

My reply:

Ahem, you used the word “to” and “two” incorrectly!

P.S. Is it OK if I poke some gentle fun with this on my blog? Name withheld, of course.

His reply:

Sure. I bet you can't wait for my paper...

That's how we roll.

WTP = f[dF(+),U.S.(-)]

In a recent survey of residents in the U.S. and Sweden, RFF Fellow Alan Krupnick and his colleagues in Sweden found that 92% of Swedes and 71% of Americans are willing to pay for climate change mitigation efforts. The average amount people are willing to pay to avoid a 4^oF temperature rise was $306/year in Sweden and $204/year in the U.S. – amounting to between 2-3% of the respondent’s per-capita income. They were willing to pay even more if temperature increases could be held to 3^oF: $330 per year in the U.S. and $552 per in Sweden. These levels of expenditure are in line with most of the economic estimates of the cost of climate change mitigation – generally thought to be between 1-3% of GDP.

via energy.nationaljournal.com

Hat tip: Weathervane.

Economical writing

I presented McCloskey's Economical Writing in senior seminar today.* I'll be receiving 13 15-20 page papers in a few weeks so some instruction in writing is a good idea.

I read Economic Writing in graduate school and enjoy the executive summary every other year or so. Both are highly recommended. Here is the short version, based on the executive summary, and my own interpretation:

1. "Choose a reader and stick with her." In other words, if you are writing for a non-economist don't use jargon or technical stuff. If you are writing for an economist, don't explain the most basic stuff.
2. "Avoid boilerplate." In other words, don't cut and paste your own paragraphs.
3. "Impenetrable theoretical utterances have prestige in economics, but shouldn't." In other words, write in English and try to avoid showing how smart you are.
4. "The table-of-contents paragraph is an abomination to the Lord thy God." Oddly, McCloskey uses more than one religious reference (in another item she damns some writers to hell, with a capital H). But I say, is the TOC paragraph really THAT bad? Does god care if you waste journal space with a few sentences laying out the rest of the paper? 
5. "Tables are writing." This is a big one for me. One of my committee members told me that your data and regression tables should be standalone. Don't include your mnemonic in the list of variables; i.e., use "Smoke less" instead of "SMKLSS."
6. There is no #6 in the executive summary!
7. "Don't overload your sentences. ... An English sentence has ... three parts: subject, verb, object."
8. "Paragraphs should have a structure like (AB)(BC)(CD)." The Bs and Cs are repetitions of the same thought/word.
9. "Avoid elegant variation." If your key word is "wetlands" don't try to spice things up by referring to bogs, swamp and marsh.
10. "The semicolon (;) means roughly 'futhermore'; the colon (:) means roughly 'to be specific.'"
11. "Weak writers these days use too many commas ...." Bloggers are weak writers.
12. Rearrange the order or words and phrases of every sentence you write. Huh?**
13. The end of the sentence is the place of emphasis. Huh?
14. "This-ism is becoming a plague. These bad writers think this reader needs repeated reminders that it is this idea, not that one, which is being discussed." Avoid "this."
15. "Watch out for bad words." For example: via, intra, and/or, respectively, thus, overall, basic, factor, etc. We had a nice discussion of "respectively." 

I violate all of these rules in my own writing, I'm sure.

A few additional rules of my own:

1. No exclamation points. (This rule is not a rule for bloggers, by the way.)
2. No question marks. No multiple question marks. (This rule is not a rule for bloggers, by the way.)
3. Scientific writing is not creative writing (creative writing is what your blog is for).

And, by the way, my students told me that the business writing and communication courses taught in the English department failed to cover writing a research paper. The course seems to focus on writing memos and resumes. Crap!

*We also watched the Awareness Test and the first part of Jodi Begg's Humor talk at the ASSA meetings.

**Each "Huh?" suggests I need to re-read Economical Writing.