Environmental Economics

Monday's Misleading Headline: A short-term dip does not a trend make

Gallup reports: "Concern About Several Environmental Problems Dips in U.S."

Here's the evidence.

So, I downloaded the data, redrew the graphs, added trendlines, then deleted the original data to better suss out the underlying trends without all the confusing squiggly lines. Here you go.

Oh, and I gave it a new title: No Obvious Conclusion Can be Drawn about Trends in Attitudes Toward Environmental Problems in the U.S.

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%. 

If you need an example of a negative externality for your class today then here is a good one from NOAA

From NOAA Research News (One facility makes a big contribution to Salt Lake’s winter brown cloud):

The 2.4 million people who live along Utah’s Wasatch Front experience some of the most severe winter particulate matter air pollution in the nation. Now, analysis of measurements taken during NOAA research flights in 2017 indicates that emissions from a single source, a magnesium refinery, may be responsible for a significant fraction of the fine particles that form  the dense winter brown clouds that hang over Salt Lake City. 

The finding was published this week in the journal Environmental Science and Technology.

This diagram depicts the estimated influence of halogen emissions on the generation of PM 2.5 by halogens, including chlorine and bromine, based on measurements during NOAA research flights over the Salt Lake basin in Utah in January - February 2017. Credit: Caroline Womack, NOAA/CIRES

Lead author Carrie Womack, a CIRES scientist working at NOAA, said analysis of airborne measurements directly from the plume rising from the US Magnesium refinery during a 2017 winter air pollution study in Utah found that emissions of chlorine and bromine, known as halogenated compounds, were significant contributors to the persistent winter brown clouds. 

And here is a great picture of a negative externality if your students don't believe you: 

Electric vehicles made up 10% of the market for the first time in 2022

From the WSJ (EVs Made Up 10% of All New Cars Sold Last Year): 

Electric-vehicle sales crossed a global milestone last year, achieving around 10% market share for the first time, driven mainly by strong growth in China and Europe, according to fresh data and estimates.

While EVs still make up a fraction of car sales in the U.S., their share of the total market is becoming substantial in Europe and China, and they are increasingly influencing the fortunes of the car market there as the technology goes mainstream. The surge in EV sales also contrasted with the broader car market that suffered from economic worries, inflation and production disruptions.

...

Other manufacturers reported a similar divide of strong growth in sales of electric cars—boosted in part by the availability of a wider array of models in addition to market leader Tesla Inc.—and weak or declining sales of conventional vehicles. Ford Motor Co., Mercedes-Benz Group AG and BMW each said their EV sales more than doubled in 2022, while their total vehicle sales declined.

The biggest reason for the increase seems to be sales in China but there have been increases in the rest of the world:

This is likely to change with subsidies in China expiring after more than 10 years and the new $7500 US subsidy from the Inflation Reduction Act (WaPo: Sparks Will Fly in the Electric-Car Trade War).

Daily Demand and Supply: Bill Nye Explains the Law of Demand...and Carbon Pricing, MFers.

Warning:  NSFW (Unless you work at a University and part of your job is to watch stuff like this and post it on a blog).

The highlights of this have been around all week, but most of the clips are just Bill Nye the Science Guy saying "motherf***ers.   But this segment on Last Week Tonight really does a nice job of simply explaining how Carbon Pricing works.  If you don't want to watch the whole thing, just fastforward to the 9:27 mark or so, and sit back and enjoy.

Bill Nye explains the Law of Demand from 10:21 to 10:37.

Now if I can just figure out how to use this in class without trigger warnings.

The price of a coal mining job-related air pollution premature death @rff_org

Here is a summary of an analysis of part of the Trump Administration energy policy from a new RFF working paper by Daniel Shawhan and Paul Picciano:

A leaked US government memo proposes preventing the scheduled retirement of coal and nuclear power plants for two years. Using a detailed simulation model, we estimate the effects of such a policy on emissions, mortality, and coal-mine jobs.

• We estimate the effects of a proposed US policy to delay retirement of coal and saveable nuclear power plants that have announced they will close by the end of 2020.
• The policy would cause 353 to 815 premature deaths in 2019-2020 from additional emissions of sulfur dioxide and nitrogen oxides.
• The policy would support 790 coal-mine jobs (1580 job-years), though it would be likely to reduce economy-wide employment.
• These results indicate that each year the policy would cause 1 death for each 2 to 4.5 coal-mine jobs that it supports.

If coal jobs earn $80,000 then the Trump administration is willing to trade 1 premature death for a mere $160,000 to $360,000 (and loud cheers at campaign rallies). My read of the literature says that the value of avoiding a premature death is actually larger than those numbers and so this policy is an inefficient allocation of scarce resources.

If you hold your breath, air quality doesn't matter either

And then there's this...

Citing the risk of conflicts of interest, the EPA administrator instituted a sweeping change to the agency’s core system of advisory panels on Tuesday, restricting membership to scientists who don’t receive EPA grants.

In practice, the move represents “a major purge of independent scientists,” Terry F. Yosie, chair of the EPA’s Science Advisory Board during the Reagan administration, told the Washington Post. Their removal paves the way for a fresh influx of industry experts and state government officials pushing for lax regulations.

The advisory boards are meant to ensure that health regulations are based on sound science, but that role may be changing. As of Tuesday, the new chair of the Clean Air Safety Advisory Committee is Tony Cox, an independent consultant, who has argued that reductions in ozone pollution have “no causal relation” to public health.

The new head of the Science Advisory Board is Michael Honeycutt, the head toxicologist at the Texas Commission on Environmental Quality, who has said that air pollution doesn’t matter because “most people spend more than 90 percent of their time indoors.”

The figureheads of science denial were on hand to celebrate Pruitt’s announcement. Representative Lamar Smith, a Republican from Texas, called the move a “special occasion.”

 

Graphic of the Day: I think we still have a problem

Is Climate Change Fair?

Just got around to reading the Hsiang et al piece in Science on the inequitable economics impacts of climate change.  Here's the abstract:

Estimates of climate change damage are central to the design of climate policies. Here, we develop a flexible architecture for computing damages that integrates climate science, econometric analyses, and process models. We use this approach to construct spatially explicit, probabilistic, and empirically derived estimates of economic damage in the United States from climate change. The combined value of market and nonmarket damage across analyzed sectors—agriculture, crime, coastal storms, energy, human mortality, and labor—increases quadratically in global mean temperature, costing roughly 1.2% of gross domestic product per +1°C on average. Importantly, risk is distributed unequally across locations, generating a large transfer of value northward and westward that increases economic inequality. By the late 21st century, the poorest third of counties are projected to experience damages between 2 and 20% of county income (90% chance) under business-as-usual emissions (Representative Concentration Pathway 8.5).

Here's a pretty picture (with a really long caption) that sums things up:

Caption: County-level median values for average 2080 to 2099 RCP8.5 impacts. Impacts are changes relative to counterfactual “no additional climate change” trajectories. Color indicates magnitude of impact in median projection; outline color indicates level of agreement across projections (thin white outline, inner 66% of projections disagree in sign; no outline, ≥83% of projections agree in sign; black outline, ≥95% agree in sign; thick white outline, state borders; maps without outlines shown in fig. S2). Negative damages indicate economic gains. (A) Percent change in yields, area-weighted average for maize, wheat, soybeans, and cotton. (B) Change in all-cause mortality rates, across all age groups. (C) Change in electricity demand. (D) Change in labor supply of full-time-equivalent workers for low-risk jobs where workers are minimally exposed to outdoor temperature. (E) Same as (D), except for high-risk jobs where workers are heavily exposed to outdoor temperatures. (F) Change in damages from coastal storms. (G) Change in property-crime rates. (H) Change in violent-crime rates. (I) Median total direct economic damage across all sectors [(A) to (H)].

Env-Econ Summary: We're all screwed, just some of us are screwed more than others.   

Quote of the Day: "The fact is places like Ohio were getting dramatically cleaner anyways"

From the front page of the Columbus Dispatch:

As President Donald Trump signed an executive order Tuesday easing environmental regulations, he said to coal miners standing nearby: "You know what it says, right? You're going back to work.

But it's not quite that simple.

The announcement could have mixed effects in Ohio, where cheap natural gas, mechanization and competitive renewable technologies have contributed to an industry-wide move away from coal.

"That's going to happen no matter what. That's just economics," said Brent Sohngen, an environmental and resource economist at Ohio State University.

"The fact is places like Ohio were getting dramatically cleaner anyways. This just makes it 10 percent slower, 20 percent slower."

Brent is a colleague here at Ohio State.  He is also conservative (for an academic environmental economist), studies climate change, and has won a Nobel Prize*.

*Nobel Peace Prize...along with 1500 of his close colleagues as a member of the IPCC writing team.