Environmental Economics

User fees at Prime Hook National Wildlife Refuge

Holiday trip to Lewes, DE (more pictures soon):

We haven't posted a good green vs. green spat in a while

From the inbox (with apologies for formatting as it seems my new iPad doesn't support Typepad formatting or allow for downloading of Firefox):

Washington, D.C. - December 29, 2010 – Today, American Bird Conservancy announced that three iconic American bird species face especially severe threats from wind energy development.

"Golden Eagles, Whooping Cranes, and Greater Sage-Grouse are likely to be among the birds most affected by poorly planned and sited wind projects,” said Kelly Fuller, Wind Program Coordinator for American Bird Conservancy, the nation’s leading bird conservation organization. “Unless the government acts now to require that the wind industry respect basic wildlife safeguards, these three species will be at ever greater risk.”

The U.S. Fish and Wildlife Service (FWS) currently estimates that more than 400,000 birds are already being killed each year after being struck by the fast-moving blades of wind turbines. This figure is expected to rise significantly, and will likely eventually pass the million mark as wind power becomes increasingly ubiquitous under a Department of Energy plan to supply 20% of America's power through wind by 2030.

Golden Eagles have already been one of the major victims of the largest wind farm in the United States at Altamont Pass in California. The Altamont wind farm was sited in an area that eagles and other raptors use to hunt ground squirrels and other small mammals. Using the now-outdated towers as perches, thousands of raptors have been killed as they launch out through the spinning turbines towards their prey. While new tower designs have been developed, they don’t completely eliminate the risk. Much of the additional wind build-out planned for the western U.S. is expected to occur in areas used by Golden Eagles.

A further threat to birds is expected to come from the major transmission line build-out required to service new wind farms. Large birds such as the endangered Whooping Crane can fail to see the wires in time and die after colliding with them. According to a recent FWS report, “The Great Plains states traversed by the Whooping Cranes during their fall and spring migrations are among the windiest states in the nation. The best places for wind energy development in these states overlap to a large extent the Whooping Crane migration corridor, and many of these areas provide attractive stopover sites. Thus, the potential for impacts to Whooping Cranes from future wind energy development is high.”

The threat to yet more birds comes not from collisions, but from loss of their habitat due to wind farm construction. The Greater Sage-Grouse is already reduced to a tiny fraction of its former range and population size due to degradation of sagebrush habitat in the West. The proliferation of giant turbines looming over the habitat can cause birds to abandon remaining traditional breeding grounds. The total habitat footprint from wind farms is predicted to exceed 20,000 square miles by 2030, much of it in states such as Wyoming, one of the last remaining sage-grouse strongholds.

While the threat from wind development stands out for these three iconic American birds, it is by no means limited to a small handful of species. More than ten billion birds are estimated to migrate across the country each spring and fall, many at night. Wind turbines will be an unexpected obstacle to these migrations. Plans to build a wind farm at Canada's Point Pelee—a migration hotspot on the Great Lakes—were recently shelved due to a public outcry over the expected impact on songbirds, but other wind developments are planned along the U.S. side of the lakes, and in other areas through which migrating birds funnel, with as-yet uncalculated bird impacts.

While Whooping Cranes are protected under the Endangered Species Act and Golden Eagles under the Bald and Golden Eagle Protection Act, most migratory birds are only protected by the Migratory Bird Treaty Act, which has seldom been enforced to prevent such mortality as is predicted as a result of wind development. The Greater Sage-Grouse, meanwhile, currently receives no federal legal protection, though several states have stepped up to protect remaining core breeding areas. In the face of increasing wind development, realizing the potential for state agencies to do yet more will be important for this species.

“Without strong standards designed to protect birds through smart siting, technology, and mitigation programs, wind power will soon affect millions of birds. Given the subsidies paid to the wind industry by the government, many of the negative impacts to birds will be unwittingly funded by the American taxpayer,” said Fuller. “We understand the problem and we know the solutions. American Bird Conservancy supports wind energy, and some operators are already working to protect birds, but we need to make all wind power bird smart now before major build out occurs.”

Snow

I shoveled snow for about 5 hours total, I don't know if I got much else done:

Snow total reports from around the NC Mountains (Saturday through Monday morning):
Asheville 10"
Bakersville 15"
Beech Mtn 14"
Blowing Rock 9.5"
Boone 9"
Buck Mtn 16"
Buladean 17"
Cove Creek Ridge 19"
Fleetwood 5"
Green Mtn (NW of Bakerville) 20"
Max Patch (Haywood Co) 24"-28"
Marshall 8"-10"
Stone Mtn (Bethel) 14"-15"
Spruce Pine 13"-15"
Sugar Mtn 17"
Waynesville 9"-12"
Weaverville 13" - 15.5"
Wolf Laurel 16"

via booneweather.com

MMQ gets the economics wrong

Peter King:

The Eagles announced last month they would run the first self-sufficient alternative-energy sports stadium in the country. They'll install 80 spiral wind turbines to the stadium and mount 2,500 solar panels. Together, those devices will power about 30 percent of the stadium's energy needs. In addition, a biodiesel plant will be built nearby and that alternative energy source will help power (along with natural gas) the remaining 70 percent of the stadium's power needs. In addition, the project to install all the devices will employ 200 people for a year in, obviously, a down economy.

We all know 2 things about green jobs:

1. In microeconomics they are costs not benefits
2. In macroeconomics, these jobs are likely offset by job losses in some other part of the economy

The Smart Money's on me

"Even in tight-wallet times, a surprising number of consumers have shown they're willing to pay a premium for environmentally friendly products. Hybrid cars have more than doubled their market share in the U.S. since 2005. And spending on energy-related home-remodeling projects has been resilient, despite the housing downturn; it totaled $49 billion in 2009, up 29 percent since 2003, according to Harvard University's Joint Center for Housing Studies. But having paid a little extra to go green, many consumers are now encountering an unexpected irritation: They have to pay more than their neighbors to stay green. The price of maintaining, repairing and even getting insurance for green products can often be higher than for their ordinary counterparts. "There are hidden costs that people don't think about," says Tim Haab, an environmental economist and a professor at Ohio State University. And with many tax credits for energy-efficient upgrades likely to expire soon, some consumers are finding themselves having to recalculate the cost of being eco-conscious." http://www.smartmoney.com/spending/for-the-home/the-hidden-cost-of-gong-green-1292011716331/

Restoration of Lake Mattamuskeet Lodge

A need for some benefit estimates:

Senate leader Marc Basnight sent Gov. Bev Perdue and other statewide elected officials a letter last week asking them to approve borrowing $3.3 million to continue renovations of a Lake Mattamuskeet Lodge in Hyde County.

The lodge, built in 1915, is on the National Historic Register. The state is in the middle of renovating it.

...

The state so far has spent about $5 million on repairs. The total cost to restore it will be about $12 million.

via www.newsobserver.com

The lake, lodge and story behind it are very cool. However, not many people go to the lodge. It is also hard to imagine the private sector undertaking $12 million to restore it, even if they reach the goal of generating paid guests (I think that is the idea, but the link to the "business plan" is not live). As such, much of the benefit of restoration is nonuse values. This would be an interesting study.

NSF "grand challenge" papers

From the American Economic Association:

The National Science Foundation sent out a Dear Colleague letter requesting white papers on grand challenges in the social and behavioral sciences. The Directorate for the Social, Behavioral, and Economic Sciences of the National Science Foundation (NSF/SBE) will use these white papers "to frame innovative research for the year 2020 and beyond that enhances fundamental knowledge and benefits society in many ways. This request is part of a process that will help NSF/SBE make plans to support future research." The Dear Colleague letter is available here. Advance copies of some of the papers were also sent to the AEACGR and are available below.

The "grand challenge" papers include the following:

• Goulder, Lawrence; Integrating Economic and Political Considerations in the Analysis of Global Environmental Policies
• Nordhaus, William; Some Foundational and Transformative Grand Challenges for the Social and Behavioral Sciences: The Problem of Global Public Goods
• Stavins, Robert; Some Research Priorities in Environmental Economics

Marginal Revolution on catch shares

Alex Tabbarok addresses a critic of catch shares in commercial fishing:

Both of these features are benefits not costs. It's true that speculation can create bubbles and other problems but speculators also make the market more future-oriented and this will help to avoid the collapse of fishing stocks by making prices a better early warning system. Moreover, if environmentalists want to buy catch shares to increase the fishing stock then I am all for it.  In Modern Principles, Tyler and I discuss how we bought and retired some SO2 making the air cleaner for everyone (you are welcome! :)). 

Fewer, larger boats is also a benefit not a cost. Under the current system the influx of small boats is simply a form of rent-seeking which raises net social costs--too many fisherman chasing too few fish. Catch shares reduce over-capitilization in the industry raising productivity (see also Modern Principles on this point).

The main problem with catch-shares is setting the size of the catch, which inevitably is a politicized process. Massachussetts congressmen, for example, are trying to withold funds from NOAA until catch shares are increased. Nevertheless with so many fishing stocks nearing collapse it is clear that some limits are needed. Moreover, before catch-shares are put in place few people in the industry appreciate that temporary limits can lead to long-term increases in catch as the fishing stocks recover to sustainable levels. After catch-shares are put in place, however, it is sometimes the fishermen who lobby for greater limits not for monopoly reasons but as they come to reconize that a smaller limit leads to a larger stock and larger profits.

Here is my previous post, Reversing the Decline in Fish Stocks, on catch shares with more links.

via www.marginalrevolution.com

And now the wind is picking up

"Christmas surprise"

The quote above is from Fred Upton, Republican congressperson from Michigan, who doesn't understand that a lot of workers like to get things off their desk before the holiday vacation:

The Environmental Protection Agency announced a timetable on Thursday for issuing rules limiting greenhouse gas emissions from power plants and oil refineries, signaling a resolve to press ahead on such regulation even as it faces stiffening opposition in Congress.

The agency said it would propose performance standards for new and refurbished power plants next July, with final rules to be issued in May 2012. Proposed emissions standards for new oil refineries will be published next December, it said, with the final rules due in November 2012; rules for existing plants would come later. ...

Gina McCarthy, the assistant administrator for air and radiation, said the rules would be “cost-effective” but the agency declined to be more specific, saying only that the agency would consider the costs and benefits of available control technologies.

That left open the question of how much money the agency would demand that an industry spend to avoid emitting carbon dioxide. ...

In the conference call, Ms. McCarthy emphasized that the E.P.A. was not imposing a “cap-and-trade” system, a system that sets a ceiling on greenhouse gas pollution while allowing companies to trade permits, at a price that the market determines.

Approved last year in a House bill, cap-and-trade legislation died in the Senate this year. Later, opponents called it “cap and tax,” and it became a rallying cry for some midterm election candidates who were opposed to the expansion of government authority over industry and the economy.

via www.nytimes.com

The interesting thing will be how the EPA manages the rules to be cost-effective without economic incentive-based policy. The NYTimes speculates that it will be through an attempt at mandated energy efficiency.