Environmental Economics

What I'm doing this afternoon

September 30 Michael Price
(University of Tennessee)

"Are There 'Hidden Costs' of Control in Naturally Occurring Markets: Evidence from Field Experiments"

Supplemental Material

via www.business.appstate.edu

Submit your pointed questions for Mike in the comments section and I'll try to bring them up during the seminar.

Environmental Campaigns, Norms, and Implications for Public Goods Policy

From the inbox (FW)*:

Article title: WOODSY THE OPTIMAL OWL:ENVIRONMENTAL CAMPAIGNS, NORMS, AND IMPLICATIONS FOR PUBLIC GOODS POLICY
Reference: ECOLEC4002
Journal title: Ecological Economics
Corresponding author: Dr. Matthew G. Interis
First author: Dr. Matthew G. Interis
Received at Elsevier: 6-JUL-2011
Final version published online: 28-SEP-2011
Full bibliographic details: Ecological Economics 70 (2011), pp. 2327-2333
DOI information: 10.1016/j.ecolecon.2011.07.005

Dear Dr. Interis,

The final version of your article with full bibliographic details is now available online at:

http://dx.doi.org/10.1016/j.ecolecon.2011.07.005

*Yes, I'm copying John (but Matt did just send me this last night).

Measuring the impact of sea-level rise on coastal real estate

From the inbox (FW):

Dear Prof Okmyung Bin,

Journal: Journal of Regional Science

Article title: "Measuring the impact of sea-level rise on coastal real estate: A hedonic property model approach* "

Your article is currently at the following stage of production:

Stage 4 (of 4): The issue containing your article is now published online.

Here is the abstract:

This study estimates the impact of sea-level rise on coastal real estate in North Carolina using a unique integration of geospatial and hedonic property data. With rates of sea-level rise approximately double the global average, North Carolina has one of the most vulnerable coastlines in the United States. A range of modest sea-level rise scenarios based on the IPCC Fourth Assessment Report projections (2007) are considered for four counties of North Carolina—New Hanover, Dare, Carteret, and Bertie—which represent a cross-section of the state's coastline in geographical distribution and economic development. High-resolution topographic LIDAR (light detection and ranging) data are used to provide accurate inundation maps for the properties that will be at risk under six different sea-level rise scenarios. A simulation approach based on spatial hedonic models is used to provide consistent estimates of the property value losses. Considering just four coastal counties in North Carolina, the value of residential property loss without discounting in 2030 (2080) is estimated to be about $179 ($526) million for the mid-range sea-level rise scenarios. Low-lying and heavily developed areas in the northern coastline are comparatively more vulnerable to the effect of sea-level rise than the other areas.

A new env-econ category

Tim opened a can of worms with his "Just Because" post. Here I demonstrate just how far afield we might be able to take the category:

Source: CFT

Count 'em, 20,000 green jobs (if the pipeline is operated according to regulations)

Environment economics classroom example of the day (I'm not even teaching the course, I do this only for you*):

Is the [Keystone XL] pipe in the national interest?

Addressing that question, though — especially in the sprawling sweep of six huge states through which the pipeline or its pump stations would run like a spine — takes in a universe of conflicting, interlocking issues, from short-term economics to global climate, from the discontent of a rural belt losing population to issues of national energy security, joblessness, corporate power and prices at the corner pump. ...

The State Department concluded last month that the project, Keystone XL, would cause minimal environmental impact if it was operated according to regulations, and the operator, TransCanada, has said the nearly 2,000-mile line would create 20,000 jobs in the United States. Opposition groups around the country, though, said the federal study did not consider the effects of a major spill, while supporters said the nation’s economy had continued to worsen, making Keystone XL all the more crucial. ...

Keystone XL’s opponents also point to a Enbridge Energy spill of 843,000 gallons of oil sands crude near Marshall, Mich., as an example of what can go wrong.

A little over a year after the spill, a 35-mile stretch of the Kalamazoo River remains closed. And just this week, Enbridge stated in federal filings that the cost associated with the spill, originally estimated at $585 million, might now increase by 20 percent.

via www.nytimes.com

Sometimes it helps to visualize the job gains. From Wikipedia, the U.S. section is 1379 miles long. At 5280 feet per mile, it is 7,281,120 feet long. That amounts to one job every 364 feet of pipe, or about the length of a football field including the endzones. So many jobs that those guys could wave to each other.

*And to solidify my microcelebrity status and a bit of Google Ad money.

Toothless but interesting*

Prestigious US academic institution Princeton University will prevent researchers from giving the copyright of scholarly articles to journal publishers, except in certain cases where a waiver may be granted.

The new rule is part of an Open Access policy aimed at broadening the reach of their scholarly work and encouraging publishers to adjust standard contracts that commonly require exclusive copyright as a condition of publication.

Universities pay millions of dollars a year for academic journal subscriptions. People without subscriptions, which can cost up to $25,000 a year for some journals or hundreds of dollars for a single issue, are often prevented from reading taxpayer funded research. Individual articles are also commonly locked behind pay walls.

Researchers and peer reviewers are not paid for their work but academic publishers have said such a business model is required to maintain quality.

At a September 19 meeting, Princeton’s Faculty Advisory Committee on Policy adopted a new open access policy that gives the university the “nonexclusive right to make available copies of scholarly articles written by its faculty, unless a professor specifically requests a waiver for particular articles.”

“The University authorizes professors to post copies of their articles on their own web sites or on University web sites, or in other not-for-a-fee venues,” the policy said.

“The main effect of this new policy is to prevent them from giving away all their rights when they publish in a journal.”

Under the policy, academic staff will grant to The Trustees of Princeton University “a nonexclusive, irrevocable, worldwide license to exercise any and all copyrights in his or her scholarly articles published in any medium, whether now known or later invented, provided the articles are not sold by the University for a profit, and to authorise others to do the same.”

In cases where the journal refuses to publish their article without the academic handing all copyright to the publisher, the academic can seek a waiver from the open access policy from the University.

The policy authors acknowledged that this may make the rule toothless in practice but said open access policies can be used “to lean on the journals to adjust their standard contracts so that waivers are not required, or with a limited waiver that simply delays open access for a few months.”

via theconversation.edu.au

*Some might say that about some of my relatives

Marginal Revolution: Why they call it Green Energy

Did I really stay up until midnight and watch the Braves lose in 13 innings, after leading in the ninth, and get knocked out of the playoffs?

Anyway.

The Energy Collective wants us to write more about wind, so here goes:

The LA Times reports that Larry Summers and Timothy Geithner ”raised warning flags” about the loan guarantee program for renewables long before the Solyndra bankruptcy. The article doesn’t have a lot of new information (the key players are clearly protecting themselves) but it does link to a fascinating briefing memo written for the President in October of 2010 by Summers, Ron Klain (then chief of staff to the Vice President), and energy advisor Carol Browner.

The memo says that OMB and Treasury were concerned about three problems, “double dipping” (massive government subsidies from multiple sources), lack of “skin in the game” from private investors and  ”non-incremental investment,” the funding of projects which would occur even without the loan guarantee.

The memo then illustrates with one such program, the Shepherds Flat Loan guarantee. ...

via marginalrevolution.com

Keep reading! My favorite part of the Shepherds Flat Loan guarantee is this:

If this wind power displaced power generated from sources with the average California carbon intensity, it would result in about 18 million fewer tons of CO2 emissions through 2033. Carbon reductions would have to be valued at nearly $130 per ton CO2 for the climate benefits to equal the subsidies (more than 6 times the primary estimate used by the government in evaluating rules).

An efficient subsidy would equate the per ton benefits with the per ton subsidy costs. So, without reading anything but MR's excerpt, this might be comparing apples and oranges. But still, this subsidy smells inefficient in addition to contributing to an ineffective stimulus (snark: makes me think the stimulus just wasn't big enough).

Daily Demand and Supply: Choosy moms choose JIF...now

Due to drought (supply decrease), peanut butter prices are expected to rise in November.  The effect today should be an increase in demand for peanut butter which will cause prices to rise sooner rather than later.

Where do they get these people?

From the comments ...

Posted by: Killian O'Brien | September 21, 2011 at 09:31 AM

Then, the economist, in typical fashion, also fails to address the real costs of this extraction. The economic cost to consumers of the high prices is huge and is reason why the housing crisis was focused first in the suburbs where gas prices matter most. The costs to the environment, global climate, etc., are ignored by economists who refuse to include these costs for fossil fuels which leaves prices for them artificially low compared to wind and solar, which would be more than competitive with fossil fuels if the accounting were accurate.

Posted by: PatrickW | September 28, 2011 at 09:46 AM

Am I the only one who thinks it is ironic that this guy criticizes economists for not accounting for externalities on a site that mostly focuses on the problem of externalities? Maybe I am just acting in typical fashion.

Posted by: John Whitehead | September 28, 2011 at 11:08 AM

Er, no.

I've grown weary of responding to these ignorant attacks on "economists who refuse".

Here is another one from "Killian O'Brien" (if that is really your name ... the Irish Samual Adams?*):

Since you call yourself an ecological economist, this is an astounding failure of analysis.

Er, no. We call ourselves "environmental economists." Ecological economists get things even more wrong than we do!

I also call myself "Superjohn" (one word).

Note: When your last name is a pimple, you feel like you can make fun of others' names.

Just because

Water tower comes down from Dublin, Ohio, USA on Vimeo.

Decommissioning of a water tower near my house yesterday. And yes, I was the type of kid who got a thrill of using firecrackers to blow things up, just for fun.