Environmental Economics

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Are you interested in the internal workings of fish?*

From the inbox:

Dear Dr. Haab,

One of the articles you authored a while ago caught my attention and I am hoping to discuss with you publishing a followup article, or even a review article in the Internal Medicine Review. The article was entitled "A revealed preference approach to valuing non-market recreational fishing losses from the Deepwater Horizon oil spill.". I am sure our readers would find an article that continues this work valuable. The parameters of the article are flexible and I am happy to help in any way I can.

Would you or perhaps one of your students have time to contribute an article over the summer?

 Sincerely,
 Lisseth Tovar, M. D.

 Senior Editor

 Internal Medicine Review

Those parameters must be REALLY flexible.

*Yes, that was my actual response.

"How does a Nobel-prize-winning economist become a victim of bog-standard selection bias?"

Andrew Gelman:

Again, I’m not saying that Heckman and his colleagues are doing this. I can only assume they’re reporting what, to them, are their best estimates. Unfortunately these methods are biased. But a lot of people with classical statistics and econometrics training don’t realize this: they thing regression coefficients are unbiased estimates, but nobody ever told them that the biases can be huge when there is selection for statistical significance.

And, remember, selection for statistical significance is not just about the “file drawer” and it’s not just about “p-hacking.” It’s about researcher degrees of freedom and forking paths that researchers themselves don’t always realize until they try to replicate their own studies. I don’t think Heckman and his colleagues have dozens of unpublished papers hiding in their file drawers, and I don’t think they’re running their data through dozens of specifications until they find statistical significance. So it’s not the file drawer and it’s not p-hacking as is often understood. But these researchers do have nearly unlimited degrees of freedom in their data coding and analysis, they do interpret “non-significant” differences as null and “significant” differences at face value, they have forking paths all over the place, and their estimates of magnitudes of effects are biased in the positive direction. It’s kinda funny but also kinda sad, that there’s so much concern for rigor in the design of these studies and in the statistical estimators used in the analysis, but lots of messiness in between, lots of motivation on the part of the researchers to find success after success after success, and lots of motivation for scholarly journals and the news media to publicize the results uncritically. These motivations are not universal—there’s clearly a role in the ecosystem for critics within academia, the news media, and in the policy community—but I think there are enough incentives for success within Heckman’s world to keep him and his colleagues from seeing what’s going wrong.

Again, it’s not easy—it took the field of social psychology about a decade to get a handle on the problem, and some are still struggling. So I’m not slamming Heckman and his colleagues. I think they can and will do better. It’s just interesting, when considering the mistakes that accomplished people make, to ask, How did this happen?

via andrewgelman.com

Thinking about this in my small world, searching for that one willingness to pay (WTP) estimate that delivers statistical significance that favors your hypothesis is the equivalent of p-hacking. The state-of-the-art, NOAA-Panel-endorsed referendum vote question can be quite sensitive to the nonparametric or parametric estimator chosen to summarize the votes into WTP. This is especially true when the data are "difficult" (Haab and McConnell). When a WTP estimate varies by factors of 3 or 4 depending on whether a nonparametric or parametric WTP estimate is employed then researchers should interpret significance tests conducted with these data very carefully (if not reject them outright). I've become very worried that there is "lots of motivation for scholarly journals ... to publicize the results uncritically." Researchers who have "difficult" CVM data need to present the full range of WTP estimates.  

California might be a weird place, but at least they know how to do environmental economics

From the LA Times, Democrats and Republicans can get along on climate change policy:

California lawmakers voted Monday evening to extend the state’s premiere program on climate change, a victory for Gov. Jerry Brown that included unprecedented Republican support for fighting global warming.

In a break with party leaders and activists in California and Washington, eight Republicans joined with Democrats to continue the cap-and-trade program, which requires companies to buy permits to release greenhouse gases into the atmosphere.

The legislation would keep the 5-year-old program operating until 2030, providing a key tool for meeting the state’s ambitious goal for slashing emissions. Cap and trade also generates important revenue for building the bullet train from Los Angeles to San Francisco, another priority for the governor.

California’s program is the only one of its kind in the U.S. and has been considered an international model for using financial pressure to prod industry to reduce emissions. Bipartisan support for the system comes as Republicans in Washington, including President Trump, have blocked, resisted or undermined national efforts to fight global warming.

Field research: Here I am doing what it takes* to effectively field a stated preference survey

*Doing what it takes: "Hiking" the 4.8 mile roundtrip Grandfather Trail (the last half mile featured thunder, lightning, pouring rain and some hail) at Grandfather Mountain State Park to better understand Hemlock Woolly Adelgid (I think that dead tree in the middle is a Hemlock). The last time I hiked this trail was 7 years ago (enough time to forget how difficult it is) and resulted in my rugged profile picture. Here is another picture from the hike (about 20 minutes before the storm began): 

"Pruitt blasts Europe, Merkel for ‘hypocrisy’ on climate" [part 4]

Actually, the mainstream media seems to be covering the non-climate work that Pruitt is doing at the EPA fairly well (e.g., this, this and this):

Pruitt argued that the media's focus on climate change has distracted from the work he is doing at the EPA on everything from air pollution to regulating dangerous chemicals.

"We’ve got a very positive environmental agenda. [There's] work to be done, opportunity to achieve good outcomes, a plan to do that, and there’s not very much margin, if any at all, with groups that are liberal, conservative, the rest, at getting those things done," he said.

via www.politico.com

From a FOX News interview transcript:

[CHRIS WALLACE, FOX NEWS ANCHOR]: Let me ask you one -- let me ask you one's last question, and again I apologize, sir. Because it goes to the whole question of commitment to trying to improve the environment. Under the president's new budget, the EPA is cut 31 percent, that is more than any other agency.

And I want to put up some of the cuts that are included in the president's budget. Here are some of the 56 programs that would be scrapped: Great Lakes restoration, water runoff control for farmers, pesticide safety.

What does that say about the commitment of this administration and you to cleaning up the environment when you're making a 31 percent cut in your agency and cutting things like that, water runoffs for farmers?

PRUITT: Well, part of -- part of the issue, Chris, is that over the last several years, there has been a lack of commitment to state partnership. You know, we have state Departments of Environmental Quality across the country have the resources and the expertise to deal with clean water and clean air issues. And so, renewing that partnership --

In other words, Scott Pruitt's definition of "very positive environmental agenda" is different than what many environmental economics would consider a positive environmental agenda (i.e., pursue environmental regulations when the benefits exceed the costs ... this administration only considers the costs).

"Pruitt blasts Europe, Merkel for ‘hypocrisy’ on climate" [part 3]

This is the kind of thing I say to annoy and embarrass my kids:

Pruitt bristled at the phrase "climate denier," a description that his critics have often applied to him in light of his repeated statements disputing scientific conclusions about the large role humans play in warming the planet.

"What does it even mean? That’s what I think about it. I deny the climate? Really? Wow, OK. That’s crazy, in my view," he said.

via www.politico.com

For example, I might bristle at the term "father." "What does it even mean? I'm not (all that) fat. I'm not a her. Really? Wow, OK. That's crazy, in my view." Any my kids would be annoyed and embarrassed. 

Scott Pruitt says this sort of ridiculous stuff in a serious interview where he is representing the USEPA. 

"Pruitt blasts Europe, Merkel for ‘hypocrisy’ on climate" [part 2]

Some people will say just about anything:

Pruitt repeated his criticism of the Paris deal, casting doubt on whether the United States would remain part of the climate agreement even if the Trump administration rewrites former President Barack Obama's aggressive plan to cut U.S. emissions. When Trump announced the withdrawal June 1, he held out the possibility of negotiating to "re-enter" the accord "on terms that are fair to the United States."

Pruitt argued that the United States has shown it can address climate change without being bound to an international agreement. He noted that U.S. carbon dioxide emissions have declined since President George W. Bush decided in 2001 to abandon the Kyoto Protocol.

via www.politico.com

Now correlation isn't causation but it appears to me that we were able to cut CO2 emissions by participating in an international recession agreement around about 2007 (in other words, U.S. CO2 emissions fell during the 2007 recession and recovery, CO2 emissions rose during the Bush II administration):

Source: USEPA

 

"Pruitt blasts Europe, Merkel for ‘hypocrisy’ on climate" [part 1]

This guy might be the biggest in a large field of hypocrites:

EPA Administrator Scott Pruitt dismissed European critics of President Donald Trump's climate policies as hypocrites on Wednesday, while chastising German Chancellor Angela Merkel for phasing out her country's nuclear power plants.

"I just think the hypocrisy runs rampant," Pruitt said in an interview with POLITICO. "To look at us as a nation and say, 'You all need to do more' in light of what we’ve done in leading with innovation and technology — the hypocrisy is palpable in those areas."

Pruitt mentioned Merkel by name, urging the public to press her on the issue. If reducing carbon dioxide emissions "is so important to you, Madam Chancellor, why are you getting rid of nuclear? Because last time I checked, it’s pretty clean on CO2," he said.

via www.politico.com

Yes, its clean in terms of CO2 but I can think of two reasons why you wouldn't want nuclear:

1. Nuclear accidents (e.g., this)
2. Nuclear waste storage (e.g., this)

Scott Pruitt seems not to care and/or understand what he is talking about. 

You blink and they grow up

Canadian economist and former* frequent visitor to Env-Econ, Mike Moffatt, posted this interesting picture to his Facebook page.  Mike is center in front of the flag--glory hog.  The interesting part is Canadian Prime Minister Justin Trudeau two seats to his left--sitting at a seat with the wrong name tag for some reason.  I wonder if the President of the U.S. would drop in on a panel and take a seat in front of a different name tag.  Just wondering.

*I have no idea if he still visits or not.  If he comments here I will remove the former tag.  If he gets Trudeau to comment I'll give him a virtual hug.