Environmental Economics

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.

 

I wonder how taxidermy compares?

From fIvethirtyeight.com:

In 2016, cremation overtook entombment as the most common method of “body disposal” in the U.S. And death is environmentally costly: Millions of gallons of toxic fluids and tens of millions of feet of wood are put in the ground each year. One cremation emits as much carbon dioxide as a 1,000-mile car trip.

 

Predicting Adaptation to Climate Change using Regional Heterogeneity in Mortality Effects of Temperature

Hi!  I am glad to have gotten an invitation from John to guest-blog here.  I am an Associate Professor of economics at the Andrew Young School at Georgia State University. My research on environmental economics is in solar geoengineering, health effects of air pollution and climate change, behavioral economics, and some other stuff.  I teach environmental economics at the undergraduate and PhD level.

So let me start by highlighting some recent research that I've done with co-authors Nolan Miller and David Molitor of the University of Illinois.  In this article in The Conversation, we describe the results from a recent working paper in which we use claims data from Medicare combined with weather monitor data to estimate 1) the effect of temperature extremes on elderly mortality, 2) how these effects differ across different regions of the country, and 3) the extent to which this can inform us about the effects of climate change and the potential to adapt to climate change.

We summarize our findings on the first question:

Our key finding is that both heat waves and cold snaps increase mortality rates. For example, the mortality rate from a day with average temperatures between 90 and 95 degrees Fahrenheit is higher by about 1 death per 100,000 individuals than a day with an average temperature between 65 and 70 degrees. Deaths also increase, by about one-half per 100,000 individuals, on days when the average temperature is less than 20 degrees.

There is also substantial heterogeneity in these effects across the country (FYI the editors of The Conversation didn't want us to use fancy words like "heterogeneity," but I trust that readers of this blog will be OK with them):

In hot places like Miami, cold days have a very large impact on mortality, while the impact of hot days is smaller. In contrast, hot days in Fargo have a very large impact on mortality, but an additional cold day has little effect. In fact, the effect of the hottest days (90 degrees or higher) in the coldest places is about two to three times larger than the effect of the coldest days (less than 20 degrees) in the hottest places.

Finally, we use the cross-sectional heterogeneity across regions to predict the scope for future climate change adaptation.  Basically, as currently-cold places like Chicago warm up and start to look more like currently-warm places like Miami, climate-wise, those currently-cold places will begin to exhibit the temperature-mortality relationship that currently-warm places currently have. Make sense?

This graph summarizes our predictions on the effects of climate change, depending on whether we allow for regional heterogeneity or not and whether we allow for future adaptation or not.  Ignoring heterogeneity (blue bars) makes it look like climate change will be bad for hot places but actually good for cold places.  (This incidentally is what is presented in this recent study by Solomon Hsiang and co-authors, which got quite a bit of press.) But, once you account for regional heterogeneity (green bars), that's not true anymore - climate change is bad everywhere and even worse for cold places than for hot places.  Lastly, when allowing for adaptation (gray bars), climate change isn't as bad.

As we emphasize in the working paper and in the Conversation article, this doesn't mean that adaptation is a silver bullet that solves all climate change problems.  For one thing, we don't model the costs of adaptation, which could be substantial.  Second, we don't consider other responses to climate change like abatement or geoengineering. 

The two main takeaways are that 1) we need to carefully consider regional heterogeneity when modeling climate change impacts, and 2) we need to carefully consider adaptation when modeling climate change impacts. 

Non-sequitur of the Day: Predatory journals at their best

From the inbox:

We had a glance at your published article Reply to "Comment on: A revealed preference approach to valuing non-market recreational fishing losses from the deepwater horizon oil spill and its corrigendum".

We found your article very innovative, insightful & interesting; we really value your outstanding contribution towards Scientific Community. The time and attention you devoted in presenting a realistic and pragmatic article was really appreciated.

With the theme of ‘Serving Scientific Community for a better mankind’,

International Journal of Poultry and Fisheries Sciences is publishing articles dealing with all aspects of etiology, diagnosis, treatment and prevention of liver diseases.

Challenge:  Define a logical path from recreational fishing losses to liver disease.

Go.

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.”

 

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.

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.   

My new autoresponse to appstate.edu emails

Hello,

John Whitehead is happy to report that he is no longer a part-time academic administrator (i.e., Economics Department Chair). If your email is regarding department business, please redirect it to our new chair Todd Cherry at cherrytl at appstate.edu.

John Whitehead is also happy to report that he is on Off-Campus Scholarly Assignment (i.e., sabbatical) in Fall 2017 and back to teaching, research and service in Spring 2018. If your email is about non-department business, he'll reply ASAP (or maybe not).

Thanks,

John Whitehead

P.S. For the remainder of his academic career, John Whitehead will refer to himself in the third person.

My conservative market-based case for how to fix health insurance

I know this isn't environmental, but it's policy related, and I find the health insurance policy debate interesting, and I think market-based policy can go a long way toward solving environmental issues and health care, and just because it's not environmental hasn't stopped us from posting about it before, and it's my blog and I'll blog if I want to.

Let me start by reminding everyone that despite the current administration's hard push to make me liberal, I really want to be conservative (at least economically conservative). For the most part that means I want to let markets do their thing, because I think markets do a lot better job of allocating scarce resources than any person, or government or agency can.  

But that doesn't mean there is no role for government in a conservative economist's world.  Just as the role of a mechanic is to fix an engine when it isn't running properly, a role of the government is to fix a market when it isn't running properly.  So how should the government fix health insurance?

Read on:

Economists believe that the CBO makes credible forecasts

See for yourself: http://www.igmchicago.org/surveys/the-cbo. And here is the information on the survey and panel:

This panel explores the extent to which economists agree or disagree on major public policy issues. To assess such beliefs we assembled this panel of expert economists. Statistics teaches that a sample of (say) 40 opinions will be adequate to reflect a broader population if the sample is representative of that population.

To that end, our panel was chosen to include distinguished experts with a keen interest in public policy from the major areas of economics, to be geographically diverse, and to include Democrats, Republicans and Independents as well as older and younger scholars. The panel members are all senior faculty at the most elite research universities in the United States. The panel includes Nobel Laureates, John Bates Clark Medalists, fellows of the Econometric society, past Presidents of both the American Economics Association and American Finance Association, past Democratic and Republican members of the President's Council of Economics, and past and current editors of the leading journals in the profession. This selection process has the advantage of not only providing a set of panelists whose names will be familiar to other economists and the media, but also delivers a group with impeccable qualifications to speak on public policy matters.

And these economists understand the task. In contrast, politicians who don't understand the task put little credibility on CBO forecasts. I don't understand the dichotomy other than politicians are notoriously partisan and therefore prone to saying whatever and behaving however to accomplish their goals. 

Here is a screenshot: