Environmental Economics

Happy birthday (co-author) Ash!

I prefer to call them Gulf Coast Sweet Prawns

The tasty influx of the jumbo-sized shrimp (which look more like a small lobster than the little pink crustaceans you see at the grocery store) has increased 10 times in the last year, according to a report from the USGS—from 32 in 2010 to 331 in 2011. The shrimp-eating shrimp have been spotted in waters from North Carolina to Texas.

The black-and-white striped sea creatures have shown up in the Gulf of Mexico and southeast coast and, unlike their bottom-feeding cousins, are big enough—up to 13 inches long and up to a quarter-pound—to gobble up smaller shrimp.

via news.yahoo.com

And I like to gobble up larger shrimp. Steamed in Beer, heavy on the Old Bay.

Here is my solution to any aquatic invasive specie problem. Have the government start a covert marketing campaign designed to convince the public that the invasive specie is in fact a delicacy. They can even rename the specie to make it sound appetizing (think Toothfish to Chilean Sea Bass). But here's the catch... once the public is convinced of the delectable nature of the new exotic seafood, fail to regulate the fishery. As demand increases, prices will rise and the tragedy of the commons will eradicate the invaders.

Sometimes the answers are just staring us in the face.

Gluten-free soft-shell crab

Here is the recipe: Garlic and black pepper soft-shell crabs

Picture of the day: Appstate E & R Workshop

 

Piping Plovers taste like chicken*

I like 'em fried:

North Carolina's two U.S. senators announced legislation Thursday to roll back limits on beach driving -- and walking -- at the Cape Hatteras National Seashore, and a House subcommittee planned a hearing Friday morning on a similar bill filed earlier by U.S. Rep. Walter B. Jones.

This spring the National Park Service started requiring anglers and other Outer Banks visitors to buy permits ($50 per week or $120 per year) for driving at beach locations where vehicles are still allowed.  The new restrictions are the outgrowth of a lawsuit by environmental groups and a consent decree aimed mostly at protecting the nests of rare shorebirds.  In recent weeks, the park service has closed some beach areas to pedestrians as well as vehicles after bird nesting behavior was observed.

The Senate bill announced by Sens. Richard Burr and Kay Hagan would restore less restrictive rules that were implemented in 2007. In a press release, Burr said:

“Restricting ORV use on the Cape Hatteras National Seashore has a negative impact on local communities and the local economy. We must ensure that our state’s residents have access to North Carolina’s scenic treasures, and I am confident we can come to a compromise that allows people to have access while at the same time addressing any potential environmental concerns.”

via projects.newsobserver.com

Here is a previous post on the potential efficiency of these user fees.

*Many locals and tourists don't like what this little bird is doing to their fragile economy:

 

What do you do when you meet the anonymous referee who trashed your work?

You write it up and send it to the Chronicle:

Although I expected that he would be at the conference, I hoped he wouldn't attend my presentation. He did. But even in my wildest imagination I never could have foreseen that over the next three days we would share each other's company over breakfasts, dinners, and drinks. It was as if my academic karma had gone grievously awry in a previous life.

This was, after all, the scholar who had trashed (with prejudice) my book during the peer-review process and thereby scotched any chance I had with my original publisher ...

"AERE" Workshop

Last weekend, the Department of Economics hosted the Appstate Environmental and Resource Economics Workshop ... "AERE" Workshop ... get it?

It is amazing how many excellent E&R economists are within driving distance of Boone, NC (and if you fly from Anchorage you are within driving distance once you get to Charlotte). We invited most all of them (apologies for the few oversights), expecting that 3 or 4 might say yes (we'd have an afternoon of presentations, dinner and a hike or something on Saturday). Instead, most all said yes and we had a 1.5 day workshop.

The presentations were great, the comments were constructive and everyone was friendly (i.e., Kumbayah). We hope to do something like that again.

Here is the website with links to the presentations:

http://economics.appstate.edu/environmental-and-resource-economics-workshop

The Wal-Mart Debate confuses me

"We know now the true economic impact a Wal-Mart store has on a neighborhood when it moves in," Christopher Fowler, who conducted the research for Puget Sound Sage, said. "The research shows that the negative impact is due to the use of the Wal-Mart business model. A new 'generic' grocery store does not equal economic harm, but a new Wal-Mart does."

This should be good (and by good I mean bad economics).

"When Wal-Mart comes to town, it is going to reallocate sales and its impact is going to be a function of the difference between what is currently being paid in wages at the existing stores and what Wal-Mart pays," Fowler said.

But where do the Wal-Mart employees come from?  Presumably they are providing higher wages (or benefits) to attract the workers.

That redistribution in sales is estimated at $25 million annually, according to the research. This means that nearly $660,000 in wages is lost annually.   

By redistribution of sales, I assume we are talking about consumers buying cheaper products and thereby saving money?

"Wal-Mart may say they help people 'Live Better,'" said David West, executive director of Puget Sound Sage, a nonprofit public policy organization that looks at regional economic issues. "But this study shows that communities will be much worse off, with lower wages and less money in the community, after a Wal-Mart opens."

The study may show that, but this story sure doesn't explain it that way.

The losses are tied mainly to the low wages Wal-Mart pays its employees.

I agree that may be a cost, but what about the benefits of having Wal-Mart?  The reason 'generic' stores go out of business when Wal-Mart comes in is that consumers are able to save money (which can be spent elsewhere in the community) relative to shopping at the 'generic' store. 

"These impacts stem from the low wages Wal-Mart pays to its hourly associates compared to the wages earned by comparable employees of existing retail grocery stores," the researchers said. "The difference in wages, which we estimate to be at least $3 per hour, has the capacity to impact not only the workers themselves, but also the people from whom they purchase goods and services."

Again, what about the savings to consumers who shop at Wal-Mart instead of the more expensive 'generic' store?  Those savings go to the purchase of other goods and services.

One important caveat to this research: It applies only to areas where consumer demand for products is already being met. In areas where demand is not being met, however, there is a benefit to having a Wal-Mart since it makes more products available to consumers, Fowler said.

Scratching my head.

via www.mnn.com

Hey W.W., you thought you ruined Funky Winkerbean for me?

You've been usurped!

At least they still have each other. Owen and Cody commiserate in the commissary, arriving at acceptance not only of their ineptitude with the opposite sex, but with sports jargon as well. So engrossed are they in discussion that they are oblivious to the presence of several girls who are not Summer Moore. Plenty of fish in the sea, nerds.

via sonofstuckfunky.com

I enjoyed Funky Winkerbean from 1979-2011. Now I enjoy mocking.

Background post: http://www.env-econ.net/2012/03/son-of-stuck-funky-is-a-climate-skeptic.html

An example of the dangers of an unregulated extractive monopoly

From the New York Times:

For seven decades, Pemex, Mexico’s state-owned oil monopoly and a mainstay of the government’s revenue, regulated itself — which is a polite way of saying it could do pretty much as it pleased.

The Mexican government relies on Pemex oil revenue from wells like these in Veracruz for as much as 40 percent of its budget.

No authority challenged the wisdom of investments like the billions it has spent here in the Chicontepec oil field to extract just a trickle of petroleum even as private companies have pulled torrents from similar shale rock in Texas and North Dakota.

The company’s safety procedures went largely unscrutinized as it joined the oil majors drilling in deepwater areas of the Gulf of Mexico. And the company faced no serious consequences for not keeping its promises to raise output or operate more efficiently.

But in the last few years, that has begun to change. The tiny National Hydrocarbons Commission, created by the Mexican Congress in 2008 to increase regulatory oversight of the company, is proving to be a surprisingly sharp thorn in Pemex’s side.

The five-member panel of energy specialists, which has a staff of 61 and an annual budget of about $7 million, has begun to confront the company’s executives over where and how they drill for oil. With a raft of new regulations and its own blunt assessments of the practicality of Pemex’s projects, the commission is pushing the company to explain its plans.

Pemex does not have to follow the regulators’ recommendations, but the commission’s young president, Juan Carlos Zepeda, is speaking out when it does not.

“The strength of the commission is in public opinion,” said Mr. Zepeda, 42, an economist who contends that Pemex, officially Petróleos Mexicanos, should be more transparent as it spends $20 billion this year to find and pump oil. “The force of change will come from Congress, from opinion leaders, from national universities, from society.”

... In the last few weeks, Pemex and the chief of its production and exploration subsidiary, Carlos Morales Gil, have begun responding to the pressure. The company officially reduced its estimate for probable reserves in Chicontepec by about 30 percent, to 6.49 billion barrels of oil equivalent, ending two years of wrangling with Mr. Zepeda’s team.

Then, at the end of March, Pemex announced that it had signed a contract with Wild Well Control, a Houston company that handles oil well disasters, including the 2010 BP spill, to provide deepwater containment systems, and it is in talks with a consortium of gulf oil companies to provide additional services. Pemex is also analyzing whether it should buy additional insurance for the deepwater wells, Mr. Morales said.