Environmental Economics

Not funny

If you know me well, and who doesn't, then you know I like Tennessee jokes (insert your own dang Kentucky joke here):

Like businessmen everywhere, the college sports executives [attending the IMG Intercollegiate Athletics Forum] bemoaned the high cost of doing business these days. Multimillion-dollar salaries for coaches had gotten out of hand, it was generally conceded. Even worse were the buyouts being paid to fired coaches. Auburn had recently fired its football staff — and faced the prospect of paying out $11 million in contractually obligated buyouts to its former coaches. And the University of Tennessee had paid $5 million to get rid of its football coach, Derek Dooley, after three losing seasons.

Indeed, Tennessee had already paid out a $6 million buyout to another former football coach, Phillip Fulmer — as well as to a former baseball coach and an ex-basketball coach. The buyouts at Tennessee for coaches totaled at least $9 million. When the athletic director, Mike Hamilton, finally resigned in June 2011 — with the athletic department on track to lose $4 million that fiscal year — he got, naturally, a big buyout. You will perhaps not be surprised to learn that the athletic department has been forced to suspend an annual $6 million payment it made to support the academic side of the university. This at a school where the state has cut its funding by 21 percent since 2008.

via www.nytimes.com

This joke on UT academics isn't very funny.

It's rare that one admits defeat in an academic debate...especially one over climate change in the American Economic Review

(26) The Economic Impacts of Climate Change: Evidence from Agricultural Output and Random Fluctuations in Weather: Comment

Anthony C. Fisher, W. Michael Hanemann, Michael J. Roberts and Wolfram Schlenker

In a series of studies employing a variety of approaches, we have found that the potential impact of climate change on US agriculture is likely negative. Deschênes and Greenstone (2007) report dramatically different results based on regressions of agricultural profits and yields on weather variables. The divergence is explained by (1) missing and incorrect weather and climate data in their study; (2) their use of older climate change projections rather than the more recent and less optimistic projections from the Fourth Assessment Report; and (3) difficulties in their profit measure due to the confounding effects of storage.

Full-Text Access | Supplementary Materials

(27) The Economic Impacts of Climate Change: Evidence from Agricultural Output and Random Fluctuations in Weather: Reply

Olivier Deschênes and Michael Greenstone

Fisher et al. (2012)––henceforth, FHRS––have uncovered coding and data errors in our paper, Deschênes and Greenstone (2007), henceforth, DG. We acknowledge and are embarrassed by these mistakes. We are grateful to FHRS for uncovering them. We hope that this Reply will also contribute to advancing the literature on the vital question of the impact of climate change on the US agricultural sector.

Beware all you field researchers

Make sure that you actually collect data when you do field research: 

A professor from N.C. State University used grant funds to go on family vacations at top-dollar beach resorts, according to a report by the Office of the State Auditor.

The report accuses Stacy Nelson, an associate professor in the Department of Forestry and Environmental Resources, of taking two personal trips under the guise of doing research in 2011.

For a couple decades, the department has counted restoration of ecosystems among its responsibilities. In 2009, as a part of that effort, Nelson submitted a grant proposal to the state Department of Transportation to examine whether submerged aquatic vegetation in the Currituck Sound could be monitored using remote sensors.

Nelson allegedly used $3,359 from the grant funds to take his family on trips to the Outer Banks in July and August 2011. ...

No documentation of conducting plant or water samples – the stated purpose of the trip – was provided to investigators. Nelson claims to have not kept records, which is a violation of policy. ...

The audit cost the state $35,136 and took 488 man hours to conduct.

Dennis Patterson, a spokesman for the auditor’s office, said that even though the process overturned less than it cost that it’s part of the process.

via projects.newsobserver.com

It seems like every time I conduct an activity that involves money the UNC system paperwork takes 488 hours to conduct.

This also made it into the Chronicle.

Quote of the day

From Go Vols Xtra

When coaches start speaking passionately about their loyalty to school and players, I usually zone out faster than I would in an economics lecture.

Insert UT Department of Economics joke here.

Aguanomics: Cap and trade in practice

David Zetland:

I ran a cap and trade experiment in my class,* to show students how they could benefit from a market that allowed them to trade their (capped permits) for pollution emissions.**

This experiment [65 minute mp3] clarified how "normal" people can listen to the idea but not understand how to implement it.

It also clarified the importance of setting a real cap, understanding whether manufacturers are pursuing profit or volume, and the efficiency with which market prices reveal social values

via www.aguanomics.com

If you know of any elected government officials who are, oh, I dunno, looking around for revenues, please let them know that California figured out how to raise $300 million while discouraging a bad activity

More on California's carbon auction from Jasmin Ansar:

The results of the auction announced by the California Air Resources Board showed that all ‘current’ 2013 allowances, totaling 23.1 million tons, were sold at a price of $10.09, nine cents above the regulator’s minimum (reserve) price of $10 per ton. In addition, about 14 percent of the advance 2015 allowances were sold for $10 per ton. The buyers in the auction were primarily major polluters who will need to pay for their carbon emissions starting in 2013.

The broader public should also be sanguine about the auction results. There was no evidence of any market impropriety, and bidding was brisk for the current auction, with bid volume being three times greater than the volume for sale.

One slightly puzzling result did emerge. The current auction had a much larger bid volume than did the advance auction, where only 5.5 million out of 39.5 million available 2015 allowances were sold. This could mean that companies are waiting to buy these 2015 allowances closer to the compliance date, or possibly, that companies are planning to ramp up new programs to abate future emissions and expect these programs to be more profitable than investments in carbon allowances.

Daily Demand and Supply: Marginal Cost Pricing

Traveling to Minneapolis yesterday and today. Upon arriving in Minneapolis yesterday, and not knowing much about the city, I took a cab to my hotel. Price $40.05 plus tip. Upon leaving this afternoon I noticed a light rail running through the city. After a 1/2 mile walk to the closest terminal I purchased a ticket back to the airport. Price $1.75.

Lesson: I'm a crappy traveler.

Because money is not free?

From the inbox:

The Sustainable Development Student Alliance will hold another free market Wednesday, Dec. 12, from 11 a.m. to 2 p.m. in the Multicultural Room of the student union.

Take a quick lunch break from finals and come trade things for something new. This is a great opportunity to clean out before the New Year, or get Christmas gifts for friends. Bring clothes, books, CDs, artwork, or anything else to trade. This is a free market, so no money will be exchanged, just old items for new. Get creative. Give massages. Play music. Teach something. Take something home.

Everything that remains after 2 p.m. will be saved for the next market.

Let's exchange and get to know each other.

Sustainable Development students aren't required to take an economics course.

I am not the deputy secretary of state

From the inbox:

Good Morning Mr. Whitehead,

My name is [first last] I am an international producer for [a radio program] that broadcastas in ... and the east coast of the United States. ...

We want to interview you regarding the letter you sign with other world leaders about the drug debate.

Let me know if you are available. it will be a 10 min phone interview. ...

My reply:

I haven't signed a letter about the drug debate (and I'm not a world leader!). Maybe it is another John Whitehead?

The reply:

I am sorry I contacted the wrong person. I thought you were deputy secretary of State. Thank you anyway for replying

Benefits and and costs of college

The opportunity cost has risen in Texas:

A public debate has been raging in the state over the rising cost and, some say, the questionable value of a college degree. At the same time, the oil and gas boom has employers hiring people with or without one. For some students, the case for higher education is weaker, and college recruiters are scrambling to adapt.

College enrollment, while still growing, has slowed noticeably in areas closest to major petroleum-production sites. If that trend continues, educators worry, it could threaten statewide efforts to create a more highly educated work force. And if the booming oil business one day goes bust, people who opted out of college could find their opportunities limited.

In response, colleges are trying to make themselves relevant to an industry that typically trains its own workers. The colleges are doing so by starting and expanding both certificate and degree programs to produce welders, pipe fitters, truck drivers, and, at the four-year and graduate levels, engineers. Institutions are making the case that even if a degree isn't required for a first job, it can help advance a career.

via chronicle.com