Environmental Economics

This is going into my tragedy of the commons course material

From Marginal Revolution University's Women in Economics:

via Twitter: @Laurent Franckx

David Leonhardt reviews the successes and failures of President Biden's economic team as it transitions

David Leonhardt reviews the successes (low unemployment) and failures (inflation) of President Biden's economic team as it transitions in the NYT's what I think used to be called the the Morning Brief but now it is The Morning. After mentioning infrastructure investment we get this:

Close readers may have noticed that the above list of investments left off one category: clean energy. I think it is important enough to highlight. Given the extreme costs and dangers of climate change, Biden’s investments to accelerate the transition away from greenhouse gases may end up being the most important part of his economic legacy.

The link takes you to July when Senators Schumer and Manchin made a deal: 

The package will include tax credits to speed up the development of wind, solar, hydrogen and nuclear power; a tax credit to reduce the price of new electric vehicles; and money to address the disproportionate burden of pollution on low-income communities and communities of color.

I had totally missed the last part on environmental justice. Can anyone point me to what they did there?

A pure example of free market environmentalism (almost)

From the local paper (Foothills Conservancy making progress to permanently protect iconic Blowing Rock view): 

Foothills Conservancy of North Carolina announced significant progress toward the purchase and permanent protection of a 332-acre parcel of land in Blowing Rock that contains the headwaters of the Johns River and is part of an iconic view seen from The Blowing Rock attraction, U.S. 321 and other locations within the town limits of Blowing Rock.

The property is positioned on the Blue Ridge escarpment, partially located in both the Blowing Rock and Globe communities of Caldwell County, and is part of the viewshed corridor of the immediate sweeping and magnificent mountainous panorama. The Johns River, a major tributary of the Catawba River, begins on the property, and the land harbors a number of significant natural communities and threatened plant and animal species documented by the North Carolina Natural Heritage Program.

Leveraging its experience and national reputation for successfully protecting high-value conservation projects, Foothills Conservancy has raised over $3,200,000 for the permanent protection of this land. The Conservancy has received substantial grant funding for this project from the North Carolina Land and Water Fund, the N.C. Department of Justice’s Ecosystem Enhancement Grant program, and a recently awarded $200,000 grant from the Glass Foundation. Thanks to this grant funding, and combined with considerable support from several private donors, Foothills Conservancy is now only $750,000 shy of reaching its overall fundraising goal of $4 million.

We teach that voluntary contributions will come up short when allocating goods that you can't exclude anyone from consuming it and anyone's consumption doesn't negatively affect another's consumption. Free market environmentalists point to the work of conservancies as a counter example. So, two things:

• The "Blowing Rock" view is excludable, it costs me $9 to see that particular view and I've never been even though it is only 20 minutes away (there are good substitutes). 
• The Foothills Conservancy does great work in the private sector but, like many conservancies, they are getting help from the government. 

You can make a contribution to this public good at the Foothills Conservancy webpage: https://www.foothillsconservancy.org.

Note: Photo courtesy of Foothills Conservancy via the Watauga Democrat.

Env-Econ Book Review: The Fishermen and the Dragon

I just finished reading Kirk Wallace Johnson's The Fishermen and the Dragon: Fear, Greed, and a Fight for Justice on the Gulf Coast. Here's my book review (from the view of an Environmental Economist of course).

The Fishermen and the Dragon tells the true story of the evolution of the Texas Gulf Coast crab and shrimp fisheries in the post-Vietnam era. The era is important to the story because tension builds along the Texas coast when post-war Vietnamese refugees locate to the Gulf Coast creating economic competition and (racial) tension between the existing anglers and the refugees. The racial tensions play out against the backdrop of the encroachment of the Ku Klux Klan into post-war political asylum issues and the the environmental problems that come along with rapid industrialization of the Gulf Coast. 

So why would an environmental economist care? Honestly the story has a bit of everything: Tragedy of the commons, Coasian bargaining, Ostrom-like institutional building, credible (and incredible) threats, industrial organization, the role of government in regulating the commons, natural resource damages (oil spills), environmental and health externalities, social and environmental justice. 

Part Erin Brokovich (an initially reluctant environmental crusader), part John Grisham-like southern legal thriller tinged with undertones of racism, part Pat Conroy-like description of the hardships of coastal life, this true story reads like a popular fiction thriller.

If I have one complaint, it would be that there is a slight disjoint between the story of race tensions between the refugees and local fishers, and the story of corporate greed and environmental disaster. There is overlap in the main characters, but stories seem to be separated in both time and presentation.

Nevertheless, a good read with Env-Econ lessons abound. 

I give it a solid four out of five beers raised.

 

You just have to take some time to get to know Congestion Pricing

New York City will implement its first congestion charge program by the end of 2023... perhaps. The charge was passed in 2019 but has faced delays until present. Unsurprisingly, New Yorkers don't love it... but it will grow on them (if you'll forgive my out of sample prediction). The figure below reports percent of residents supporting congestion charges across five different cities:

In history, even business owners don't oppose the tax. In theory, demand falls for businesses within the congestion zone as it becomes more expensive to access these places. However, demand can also rebound for these places as customers realize reductions in the time costs of travel to get into the city. Leape (2006, Journal of Economic Perspectives) discusses survey results suggesting congestion pricing is OK by many commercial places: 

"A survey of 500 firms carried out in early 2004 found that 72 percent of
businesses felt that the road charging experiment was working (with 14 percent
saying it was a failure) and 58 percent felt it improved London’s image (with 15
percent saying it gave London a bad image to outsiders). Overall, a plurality of
firms felt the impact on London’s economy was neutral (32 percent) with equal
numbers identifying positive and negative effects (26 percent) (Clark, 2004)."

All the while, vehicle entry to London fell by 27% and time spent sitting at idle or traveling less that 6mph fell by 33%. 

I presented something in the business school's lunch and learn session today

Here I am presenting a paper on-campus for the second time that is going big-time at the Society for Benefit-Cost meeting in March:

And here are my slides:  Download Climate change. They might not change too much for the SBCA (except I'll put the real title in there). 

Thursday Beer Post: Env-Econer Turns 60!

Happy 60th Birthday to Env-Econ co-founder John. Let's all raise a cold one to the brains behind this operation (before he forgets who we are). 

Does this mean the tenure police are coming to revoke my tenure?

From the inbox:

The SSRN Processing Team has added the following comment to your submission, Count Data Models and the Problem of Zeros in Recreation Demand Analysis (Abstract ID 3559768):

This submission has been removed from SSRN at the request of Wiley-Blackwell, copyright holder of the work. The publisher will allow authors to submit a working paper or preprint version to SSRN by going to https://hq.ssrn.com and starting a new submission. Once Submitted, contact the SSRN Support Center (https://service.elsevier.com/app/home/supporthub/ssrn/), and we will assist in reinstating your views and downloads.

Some thoughts:

1. I didn't submit anything to start with.
2. That paper was published in 1996--one year after I got my PhD. It was also my job market paper that got me my first job at East Carolina University, where I met John.
3. That paper was also part of my dissertation that won the the AAEA Outstanding PhD Dissertation Award in 1996 (talk about peaking early).
4. It has been cited 132 times according to the Google.
5. A copy of the paper can be found here, (so take THAT SSRN).
6. It has been cited once for each of the last two years. I think its useful life might be over.

Apparently the environment is politically divisive

From a recent Pew Research Survey, greedy nationalistic capitalist Republicans don't give a relative $&*^ about environmental issues compared to tree-hugging bleeding-heart Democrats.

 

If you can't think what to write in your Valentine's cards

Here are some Elvis lyrics*:

Wise men say
Only fools rush in
But I can't help falling in love with you

Your kisses lift me higher
Like the sweet song of a choir
You light my morning sky
With burning love

Well, please, don't ask me what's upon my mind
I'm a little mixed up, but I feel fine
When I'm near the girl that I love best
My heart beats, so it scares me to death

It's now or never
Come hold me tight
Kiss me my darling
Be mine tonight

If these don't work for your love situation there are more at this link. 

*Note: Elvis lyrics from Can't Help Falling in Love, Burning Love, All Shook Up, Now or Never