Environmental Economics

Bold move to ask @Jeem_Tweets to serve as a referee

The editor of Marine Resource Economics is also on this list. Are there any other editors that you'd think might get a pass or turn down most every referee request? I wonder how many papers these folks review for other journals?

Jason Shogren is in Boone today

He'll be presenting "Cooperation under oath: A case for context-dependent preferences" (with Joao Vaz) at 2 pm today (the link to the paper isn't working but I've sent an email to try to get it fixed). Here is the "research highlights" video from his webpage:

The best part about the paper is that they are using one-sided tests, which I think is appropriate. Why do we all use two-sided tests when we have theory that signs the direction of an effect. If you tell me that it is to be more rigorous I'll say why don't you go with 1% (5%) significance instead of 5% (10%). As a follow-up, why do we use arbitrary cutoffs for significance levels when a p-value is continuous? We should just present the p-value ("my beta is statistically significant at the 0.087 level"). I've been trying to follow my own rant but sometimes old habits die hard. 

I think my future boss is telling me I have been doing things wrong my whole career.

Important new discussion paper from a star-studded cast of environmental and resource economists*...

...on the need for the environmental economics discipline to take better care in considering the systemic issues of race and justice in our research published by Resources for the Future:

Our paper argues that systemic racism is such a fundamental force in our world that, if we’re not careful, it will embed itself in the work we do, including well-intentioned efforts to improve environmental quality through research and policy. We define systemic racism as racial discrimination that extends beyond individual beliefs and interactions to pervade institutions, policies, and unwritten norms—in this case, racial discrimination that’s woven into the tools and conventions of environmental and natural resource economics. Even if we don’t think our work is “about” race and racism, systemic racism may be built into that work.

And particularly relevant for my (and John's) pursuit of better measures of willingness to pay and willingness to accept:

Willingness to pay and willingness to accept are two different ways of inferring how much a person values or cares about something...

But these measures embed systemic racism, regardless of the race of the people we’re studying. If people of color are blocked from living in a neighborhood that has plenty of green space because of discrimination, or if people of color know they’ll be made to feel unwelcome there, they will seem to have a low willingness to pay for a house in that neighborhood, and therefore they’ll seem to have low willingness to pay for green space. Another example we give in the paper is that racism can push some people to seek out recreational fishing locations where they’ll be less likely to encounter other races—a behavior that will distort these inferred values, as well.

Notably, a person’s willingness to pay for something is necessarily limited by their ability to pay—and systemic discrimination has limited the income and wealth of people of color, especially Black people. As a result, these groups of people may appear to value environmental and health-related amenities less. This phenomenon also can interfere with the measurement of people’s willingness to accept; for example, people who are constrained in their means and options may be forced to accept worse outcomes, though to a lesser extent.

I'm going to spend the rest of the day staring questioningly in a mirror.

*We are thrilled (some a little too thrilled) that Amy Ando is replacing me as Chair of the Department of Agricultural, Environmental, and Development Economics at Ohio State in July. 

Have y'all seen the Partha Dasgutha video from the @nytimes yet?

Here is the link and story:

Partha Dasgupta is a Cambridge University economist who in 2021 prepared a more than 600-page report for the British government about the financial value of nature.

Not your average bedtime reading.

But believe us when we say his report, the culmination of decades of scholarship, is incredibly important. Or at least believe the United Nations, which awarded him the title Champion of the Earth for his work. Or King Charles III, who this year made Mr. Dasgupta a Knight Grand Cross of the Order of the British Empire — an extremely rare honor — for his services to economics and the natural environment.

Mr. Dasgupta’s voluminous study is so important, that we decided to publish a short film about it, the Opinion video above. To make his complex review digestible, the film employs old-timey cartoons, some cursing, a clip of Boris Johnson in a hard hat while dangling from a cable, a very apt soccer metaphor, a bit of Strauss and a title that could be viewed as an exaggeration.

We even hired the Swedish actor Alexander Skarsgard to help simplify its concepts and convey why the report is, if not required reading for everyone, at least something everyone should know about.

You should watch it: 

Society for Benefit-Cost Analysis: "Benefit-Cost Analysis for Beginners" workshop

From the inbox: 

Location: Via Zoom
Please note: All workshops will be recorded. Registrants will have access to the recordings.

Dates and Times: 

April 28, 2023 - Online
9:30 a.m. – 11:30 a.m. ET 
1:00 p.m. - 3:00 p.m. ET 

This short course provides an introduction for “beginners” who have not previously had formal instruction in benefit‐cost analysis. It is designed to help those who encounter benefit‐cost analysis to better understand its purpose and methods as well as those who are curious about how it might be useful in their work. Although some prior exposure to economics would be helpful, the workshop is designed to be accessible to a general audience. Upon completion of the workshop, attendees should have a clear understanding of the purpose, underlying concepts, strengths, and weaknesses of benefit‐cost analysis.

The workshop will compare benefit‐cost analysis to other analytical approaches commonly employed by policy analysts to put it into perspective. It will also introduce and explain a number of key benefit‐cost analysis concepts including standing (whose costs and benefits count), incremental costs and benefits (clear alternatives to current policy), opportunity cost (what we give up to do the alternative), willingness to pay (how much people value the impacts of the alternative), “shadow prices” (monetizing impacts), discounting (taking account of the timing of costs and benefits), and sensitivity analysis (taking account of uncertainty). Several examples of benefit‐cost analyses will be discussed to provide illustrations of concepts and facilitate discussion among attendees.

For more information and to register: https://www.benefitcostanalysis.org/workshops

Bad Graph Interpretation of the Day: Well, if I had to guess, I would say bad math happened.

Saw this tweet this morning with 2.3M views:

Just eyeballing it, from 1995-2000, boy suicide rates fell from about 18 to around 9, a 50% drop. Girl suicide rates fell from about 4 to about 2 per 100K, a 50% decline. Correspondingly, the overall suicide rates fell from around 11 to about 5.5 per 100K, a 50% decline. 

I'm not seeing the claimed gender difference in the fall in rates.

I think the more relevant question is why the strong rebound from 2007 or so on? 

I'm going to posit that the rise in social media might play a role.

But that's just a guess.

 

Adaptation to climate change at Northwestern North Carolina ski resorts

From the local paper (Changing climates means changing ski season):

Snowfall in the High Country is around 25 percent less than the long-term average, according to data from local meteorologist Ray Russell of Ray’s Weather Center. However, local ski resorts only need to maintain cold temperatures for a successful season.

Kimberly Jochl, vice president of Sugar Mountain Resort, notes how the resort is constantly investing in new snowmaking infrastructure. In order to make artificial snow, temperatures need to be at or below freezing.

According to the National Oceanic and Atmospheric Administration, average global temperatures have risen nearly two degrees from 1901 to 2020. Although temperatures have been changing, Russell notes, “They can put so much snow on the slopes on a cold day that it mitigates a lot of the problems of climate change.”

“It’s a real science, it’s a real craft,” says Jochl of the specifics in snow making. Even if temperatures are not freezing but the humidity is low enough, there is a factor called wet bulb, a condition in which makers can still be able to blow snow at temperatures slightly above freezing.

This season, Sugar Mountain was able to open on November 15 after 24 hours of cold temperatures and snow blowing. “Weather is our friend. We work with Mother Nature as much as we can,” said Jochl.

“It’s amazing how much snow they can make now compared to 30 years ago,” said Russell.

Jochl notes how the majority of this season has [not] been cold and snowy with some warm spells here and there. Overall though, Jochl notes how this season has been a success due to the cold temperatures allowing the mountain to blow snow.

According to Russell, one of the most significant climatological aspects that is changing is the “false spring” that has been coming in late February or early March, where a warm spell comes in and, in essence, tricks crops and plants into thinking it is time to bloom.

Even when there are warm temperatures, the resort still often attracts skiers and visitors.

“The climate makes or breaks a ski business,” said Jochl, adding that the team at Sugar works hard to “squeeze every snowflake out (that) they can each season.”

Although temperatures fluctuate globally, technology is advancing alongside it to keep ski resorts in North Carolina booked and busy.

I added the [not] above because this season has not been cold and snowy. Jeezus folks, that confuses the whole article. 

You can see the snow totals at Ray's Weather. 

If the WIllow Project is approved and fewer people know about it, are the environmental costs reduced?

One of the big problems of nonmarket valuation of projects that impact the environment is that the benefits and costs from the project depend on how many people know about it. 

US government officials are expected to make a decision on one of the biggest US oil projects in decades this week.

Environmental groups and some Native residents have long opposed the proposal because of its potential for climate impacts and wildlife damage.

But opposition has grown rapidly in the last few weeks as the #stopwillow campaign has gone viral on TikTok.

So, if Congress bans TikTok, will that decrease the net costs of the Willow project.

Some bad economics at the Department of Energy

From E&E News (DOE: Major LNG project ‘would not increase’ CO2) from June 2022: 

A proposed liquefied natural gas project in Alaska would not raise greenhouse gas emissions, according to a new federal environmental review that assumes LNG exports elsewhere will continue to meet demand even if the planned pipeline and terminal aren’t built. ...

The Department of Energy’s draft SEIS includes a life-cycle analysis of the greenhouse gas emissions tied to the project’s LNG exports. It finds that “exporting [liquefied natural gas] from the North Slope would not increase GHG emissions when providing the same services to society,” as the No Action Alternative, a scenario where the Alaska LNG project is not developed.

If you don't believe E&E news then here is the screenshot:

So, as asserted earlier, this isn't how markets work. In the no action alternative supply and demand don't move and there is no change in price or quantity of liquidfied national gas (LNG). With a new LNG facility the supply curve shifts to the right and the quantity of LNG increases (and price falls):

If there is no climate impact from the increase in LNG supply as the DOE report claims then either (1) buyers want the same amount no matter the price (i.e., the demand curve is vertical) or, (2) in the no action scenario, someone else magically increases the supply of LNG. Here is how the EPA puts the second scenario in their comment letter: 

Hat tip: Patrick Walsh in response to this post: link.  

Running the LA marathon is exhausting...

...I know because I watched my second oldest daughter run it on Sunday and she looked really tired at the end (Picture is at the start line at Dodger Stadium the day before the race).