Environmental Economics

This is why 'Climate Change' is a better term than 'Global Warming'

The decline in Arctic sea ice has doubled the chance of severe winters in Europe and Asia in the past decade, according to researchers in Japan.

Sea-ice melt in the Arctic, Barents and Kara seas since 2004 has made more than twice as likely atmospheric circulations that suck cold Arctic air to Europe and Asia, a group of Japanese researchers led by the University of Tokyo’s Masato Mori said in a study published yesterday in Nature Geoscience.

“This counterintuitive effect of the global warming that led to the sea ice decline in the first place makes some people think that global warming has stopped. It has not,” Colin Summerhayes, emeritus associate of the Scott Polar Research Institute, said in a statement provided by the journal Nature Geoscience, where the study is published.

via www.bloomberg.com

It's a little known fact...

...Cliff Claven was in The Empire Strikes Back. My worlds have collided. Mind blown.

CO2 emissions increased in 2013

Some time series data:

U.S. energy-related carbon dioxide (CO₂) emissions increased in 2013 by 129 million metric tons (2.5%), the largest increase since 2010 and the fourth-largest increase since 1990. Emissions trends reflect a combination of economic factors (population multiplied by per capita output [GDP/population]), energy intensity (energy use per dollar of GDP), and carbon intensity (carbon emissions per unit of energy consumed).

In the decade prior to 2013, energy intensity decreased on average by 2.0% per year; given that it increased by 0.5% in 2013, this meant there was a 2.5% swing compared to trend. Energy intensity changes can reflect weather variations that directly affect energy use for heating and cooling as well as changes in the composition of economic activity. Heating degree days, a measure of heating requirements, increased about 19% between 2012 and 2013. As compared to the 2003-12 trend, the increase in energy intensity added about 134 million metric tons.

Carbon intensity declined by 0.3% in 2013, but as this decline was less than the previous decade, it led to an increase of about 29 million metric tons of emissions as compared to trend. One factor driving carbon intensity lower has been the changing fuel mix in the electric power sector. The share of electricity generated from natural gas and renewables generally increased while the share from coal decreased through 2012, when natural gas prices fell to their lowest level in more than a decade following a mild winter. With higher natural gas prices in 2013, coal's generation share rose from 39% in 2012 to 40% in 2013, slowing the rate of carbon intensity reduction.

Growth in per capita output in 2013 contributed 38 million metric tons over trend as it was greater than the average rate over the previous decade. Slower population growth (0.7%) put slight downward pressure on emissions growth as compared to the previous decade. Without slower population growth, 2013 emissions would have been about 8 million metric tons higher.

via www.eia.gov

Here are the pictures: 

Daily demand and supply

From the WSJ Micro Review:

Natural-Gas Prices Fall Even With Chill Nearing
by: Timothy Puko
Oct 20, 2014

TOPICS: Supply and Demand

SUMMARY: When cold weather looms across the U.S., natural-gas prices usually rise. This year they are falling, after a record production boom nearly replenished stockpiles left at their lowest since 2003 by last winter's freeze.

CLASSROOM APPLICATION: Students can use supply and demand to examine the effects of shifts in both demand and supply on the equilibrium price of natural gas. Also, they can compare factors, such as weather, that have differing effects on the prices of two major energy sources: natural gas and oil. Lastly, they can examine how bottlenecks in supply chains affect prices.

QUESTIONS: 
1. (Advanced) How do weather forecasts affect the price of natural gas? Why does the weather have a greater effect on the price of natural gas than it does on the price of oil?

2. (Advanced) During periods of high demand for natural gas, how do bottlenecks in the natural gas supply chain affect the price of natural gas?

3. (Introductory) Why did prices for prices for natural gas last week reach to their lowest point of 2014?

Reviewed By: James Dearden, Lehigh University

While written about popular book publishing, the same can be said for academic book publishing

At the risk of biting a hand that fed me a tiny morsel, here's an interesting take on the Amazon/Hachette book fight.  To me, the interesting piece here is the question of value-added.  What value does the publisher add to the publishing process?  

In the traditional book purchasing paradigm, when a reader bought a book at the store there were two separate layers of middlemen taking a cut of the cash before money reached the author: a retailer and a publisher. The publisher, in this paradigm, was doing very real work as part of the value-chain. A typed and printed book manuscript looks nothing like a book. Transforming the manuscript into a book and then arranging for it to be shipped in appropriate quantities to physical stores around the country is a non-trivial task. What's more, neither bookstore owners nor authors have any expertise in this field.

Short story:  When I wrote my first book in 2002 (actually wrote it from 1995-2001--you can still purchase a copy here) I was surprised to learn that: 1) We had to submit a camera ready copy of our book, and 2) we had almost no control over the price that would be charged.  On 1), the publisher added no value--no content, no editing, no nothing.  On 2), we digned what we were told at teh time was the standard contract, with 5% royalties.  I have no idea if that was standard; we might have been really bad negotiators. The book originally sold for $100.  Somehow, buyers were paying an extra $95 for...what?  A nice cover?  A little marketing?  For a first book, the marketing was probably pretty valuable.  But, for the next book I write (whenever that might be), I'm thinking I am just going to post the .pdf to a password secured website and sell passwords for $10.  Sure, I risk piracy, but is that risk really going to be $90 per book?  At $10 per book, everyone is better off--except the publisher.

Back to the story--which kinda makes my point.

Digital publishing is not like that. Transforming a writer's words into a readable e-book product can be done with a combination of software and a minimal amount of training. Book publishers do not have any substantial expertise in software development, but Amazon and its key competitors (Apple, Google, and the B&B/Microsoft partnership) do.

Publishers would like writers to believe that the pressure they are feeling from Amazon will trickle down and hurt authors as well. But there is a big difference. Even in the brave new world of e-publishing, authors are still making a crucial contribution to the industry by writing the books. Publishers are getting squeezed out because they don't contribute anything of value.

via www.vox.com

One thing missing from this argument is that publisher do add value in terms of editing, screening and signaling to readers.  Getting a book published requires passing some threshold of quality.  Publishers can judge whether a book will sell.  This gives readers a signal that someone thinks the book is worth reading.  Unfortuantely, because publishers/editors are not typically subject matter experts, these signals are very noisy.  What a publisher thinks will sell is not necessarily a valuable contribution from teh readers' perspective. Once a book is published, the cleaner signal is word-of-mouth--do readers value the contribution of the book?

I really like when non-economists sound like economists--it means economic thinking is permeating everyday discussions

I've been a fan of Mike Rowe since his early days on the Discovery Channel's 'Dirty Jobs.'  I don't always agree with his political views, but he's entertaining.  He has a new show on CNN called 'Somebody's Gotta Do it,' where he highlights what seem to many like odd jobs.  Apparently in a recent show, he spotlighted efforts to save the Whooping Crane.  A viewer took exception.  In his response, Mr. Rowe sounds a bit like an environmental economist...at least he's asking economic-like questions:

"You did a disservice to Operation Migration and the whooping crane project on "Somebody's Gotta Do It." You came across as bored and disdainful. You say you work for the people who watch you and not the people who pay you -- OK. You're on probation."

Rowe's response:

...

Fair enough. I've been on probation my whole career, and I'll be grateful to remain there as long as you can tolerate me. But for what it's worth, you're mistaken. I was neither bored nor disdainful of anything I saw at the whooping crane facility. In fact, I was genuinely impressed with Dr. French and his team, and glad to give their program some national exposure. Now it's true - I didn't swoon in their presence, or behave as though I agreed with every single thing I heard. Dr. French was very clear about why he does what he does - he believes the whooping crane has as much right to exist as we do. I doubt that everyone shares that view. Should they?

Read on...

As my brain continues to atrophy I seek new publication outlets

Retraction Watch:

There’s a new journal in town.

Inference’s first issue includes a lengthy review of a laboratory by a tennis instructor, a set of caricatures, and an exchange of emails from 1996 that is “perhaps, less remarkable for what it says than for the fact that it took place at all.”

In short, its editors — who “would prefer to remain anonymous” — seem to share a sense of humor with the editors of the Journal of Universal Rejection or the Proceedings of the Natural Institute of Science:

Although the editors appeal to experts for advice, Inference is not peer-reviewed. Writers must please the editors. They need please no one else.

A list of appropriate topics for the journal is best described as random, ranging from “The difference between plants and animals” to “The principle of mediocrity.” ...

Tomorrow being the third Thursday of October, take note:

Editors are pleased to receive death threats on the third Thursday of the month.

via retractionwatch.com

I'd like to get something published there just for a caricature. And I would love, just love, publishing any number of exchanges of emails I've had over the years. 

S/he who is without sin ...

Mark Thoma:

There's a version of this in econometrics, i.e. you know the model is correct, you are just having trouble finding evidence for it. It goes as follows. You are testing a theory you came up with, but the data are uncooperative and say you are wrong. But instead of accepting that, you tell yourself "My theory is right, I just haven't found the right econometric specification yet. I need to add variables, remove variables, take a log, add an interaction, square a term, do a different correction for misspecification, try a different sample period, etc., etc., etc." Then, after finally digging out that one specification of the econometric model that confirms your hypothesis, you declare victory, write it up, and send it off (somehow never mentioning the intense specification mining that produced the result).

Too much econometric work proceeds along these lines. Not quite this blatantly, but that is, in effect, what happens in too many cases. I think it is often best to think of econometric results as the best case the researcher could make for a particular theory rather than a true test of the model.

via economistsview.typepad.com

... cast the first stone.

"Do you too think this is funny?"*

*"I have no idea what Bono and the Edge think is funny."

That's funny, I've had reviewers call whole papers a joke

I also contacted Penny Goldberg, a professor of economics at Yale University and editor of the American Economic Review, to ask if she could think of any joke, any tiny moment of amusement, one solitary witticism that has passed across her desk. Anything, even if it was rejected.

Ms. Goldberg, confirming the reputation of the dismal science in six sad words, wrote back: "I’m afraid nothing comes to mind."

via chronicle.com