Environmental Economics

Pageviews since the reboot

We made the big announcement that we would try to post more here in January 2023. We average 400 visitors from January through May. That is 600 fewer relative to when blogs were big in  economics (i.e., before Twitter took over the conversation). Summer followed pattern we were accustomed to with only a fraction of the academic semester average number of visitors. Except, except for August 11 when we inexplicably enjoyed 3420 visitors. There was a post on August 20 but nothing to explain that spike -- it received 692 views, 13 likes and 1 retweet on Twitter. I'm not tech savvy enough to figure out where all these came from. I'm just concluding that was a weird day.

Follow the bouncing ball of ethanol policy

I'm just going to leave this here. I have no idea where to start...

 POET announced today it will idle production at its bioprocessing facility in Cloverdale, IN due to recent decisions by the Administration regarding SREs. The process to idle the plant will take several weeks, after which the plant will cease processing of over 30 million bushels of corn annually and hundreds of local jobs will be impacted.

POET has reduced production at half of its biorefineries, with the largest drops taking place in Iowa and Ohio. As a result, numerous jobs will be consolidated across POET’s 28 biorefineries and corn processing will drop by an additional 100 million bushels across Iowa, Ohio, Michigan, Indiana, Minnesota, South Dakota, and Missouri.

“The Renewable Fuel Standard was designed to increase the use of clean, renewable biofuels and generate grain demand for farmers. Our industry invested billions of dollars based on the belief that oil could not restrict access to the market and EPA would stand behind the intent of the Renewable Fuel Standard. Unfortunately, the oil industry is manipulating the EPA and is now using the RFS to destroy demand for biofuels, reducing the price of commodities and gutting rural economies in the process,” said POET Chairman and CEO, Jeff Broin.

The RFS authorizes small refinery exemptions for refiners that (1) process less than 75,000 barrels of petroleum a day and (2) demonstrate “disproportionate economic hardship.” Over the past two years, the EPA has issued waivers to refineries owned by ExxonMobil, Chevron, and other large oil companies—none of which are small and none of which have economic hardship. 

EPA’s mismanagement of SREs has created an artificial cap on domestic demand for ethanol and driven RIN values to near-zero, which weakens the incentive for retailers to offer higher blends. Oil is making billions of dollars, yet still using EPA to stop biofuels growth by handing out hardship waivers to some of the wealthiest companies in the world, in contradiction with President Trump’s public comments. So far, the EPA has cut biofuels demand by 4 billion gallons and reduced demand for corn by 1.4 billion bushels, causing severe damage in rural America. 

“POET made strategic decisions to support President Trump’s goal of boosting the farm economy. However, these goals are contradicted by bailouts to oil companies. The result is pain for Midwest farmers and the reduction of hundreds of jobs and hundreds of millions of dollars of economic activity across Indiana.” said POET President and COO, Jeff Lautt

The recent announcement of 31 new waivers comes in steep contrast to the President’s roll out of year-round E15 earlier this summer. The SREs are wiping out any near-term growth potential for year-round E15 and challenging the President’s promises made to family farmers and rural communities. The President now has the opportunity to show his leadership on this issue and turnaround the rural economy. 

“My long term fear isn’t for the biofuels industry, it’s for rural America. POET can continue to produce ethanol with cheap grain, but we don’t want to lose our family farmers. The EPA has robbed rural America, and it’s time for farmers across the Heartland to fight for their future” said POET Chairman and CEO Jeff Broin.

Quote of the Day: Yep, I'm REALLY that guy

"Are you REALLY the guy that wrote that book on nonmarket valuation?"

Nameless graduate student, to me, at lunch today

Context: I was honored to give the keynote address to open the International Society of Forest Resource Economics Annual Meeting, this morning (Proof here because I know most of you don't believe I would be invited to do this--I was invited because it was on campus and I was wiling to do it for free).  Because the audience was supposed to be* a mix of academics, industry-types, government officials, and graduate students, I decided to give the keynote blog-style (non-technical and UNscholarly).  Filled with anecdotes, and cartoons, and jokes, I talked about Revisiting the Principles of Economics: Lessons from Environmental and Resource Economics. 

I guess my approachable presentation style belies my academic credibility. 

*Turned out to be an all academic audience.  The one gov't rep in the room (Chief of the Ohio Department of Natural Resources Division of Forestry) came up to me afterwards and said "Yours was that best presentation of the day...or at least it was the only one I sort of understood."  At least I made one person happy.  

 

For the 37th year in a row!

What I did today: a little community-based research (warning: self-promotion ahead)

Here is an idea for your time when the hard, gemlike flame threatens to flicker (BS&G ride director happy with 2018 event): 

Blood, Sweat and Gears Ride Director Scott Nelson felt the 2018 edition of the event went as well as it could.

The event, which took place June 23, starting and ending at Valle Crucis Elementary School, hosted 966 riders split between riding the 100-mile and the 50-mile courses. ...

The event raised $103,000 for a variety of causes. Nelson said organizers gave away $50,000 to different organizations, including $20,000 to the Western Youth Network, $10,000 to the Hunger and Health Coalition, $5,000 to Healing Hunger Farms, $5,000 for Spirit Rides, $4,000 for Mountain Alliance, $500 to Watauga County Habitat for Humanity and $2,500 to WAMY.

On top of that, BS&G makes donations to volunteer fire departments and volunteer rescue squads in both Ashe and Watauga counties. Nelson said BS&G also donated to different departments at Watauga High School, including the Robotics Club, the Sustainability Club, the football team and the baseball team.

Another donation was made to the Valle Crucis eighth-grade field trip. The BS&G organization also donated $33,000 to the Winter Warmer Project, which is funded by BS&G riders.

“We’ll likely donate more money before it’s all said and done,” Nelson said. “I just don’t have a number on that yet.”

Nelson said there were 300 volunteers helping with aid stations, registering riders, working along the start-finish line, being timers, traffic control, providing any needed first aid or help with damaged bikes and feeding all of the riders when they were finished.

There were even students from Valle Crucis Elementary ringing cowbells cheering the riders when they crossed the finish line. ...

Nelson said the economics department at Appalachian State University is sending post-ride surveys to the cyclists, which will be reviewed after a few weeks when everybody has had a chance to form an opinion.

Nelson felt everybody involved with the ride did well, but they are always looking for ways to improve.

“We did very well,” Nelson said. “I think the survey results will be more about breaking down different categories maybe where we can improve. The hard part in doing this is when you score so high, how do you motivate everybody to do better?”

Nelson said the planning committee will meet when the surveys come back to see how they can achieve that.

Hey, I was one of those volunteers (but way behind the scenes)! I've done the post-ride survey for 7 out of the last 8 years (missing 2012 for some reason). We ask satisfaction and spending questions. I have students from the economics club do the economic impact analyses. And in return for this bit of free consulting I get to ask stated preference questions. Here are a couple of papers that has come out of this work (hoping there will be more): 

1. Whitehead, John C., and Pamela Wicker. "Estimating willingness to pay for a cycling event using a willingness to travel approach." Tourism Management 65 (2018): 160-169. https://www.sciencedirect.com/science/article/pii/S0261517717302182
2. Whitehead, John C., and Pamela Wicker. Valuing Non-Market Benefits of Participatory Sport Events Using Willingness to Travel: Payment Card vs Random Selection with Mitigation of Hypothetical Bias. Department of Economics Working Paper No. 18-06. 2018. https://ideas.repec.org/p/apl/wpaper/18-06.html

Alas, all good things must come to an end. Scott Nelson is retiring as ride director and I think I'll be scaling down my post-event surveys (I did 5 in 2017, gasp for air). But one survey a year should be enough spark to keep the community-based research flame burning. 

P.S. I re-read the McCloskey piece for the n+1^st time (you should read it at least once) and found this: 

Everyone with gifts that way should be chair of the department for a while, crummy though the job is (it is like being a foreman in a factory - neither labor nor management, chewed up by both). The work has to be done.

Yes.

The climes they are a-changin'

I was talking to my parents last night and they were bemoaning the amount of rain they have had the past month.  These are the same parents who can best be described as climate change skeptics. 

Really they pay little attention to things like climate change other than my father making an off-hand remark on a bad weather day, like a warm day in January, or snowy in May, 'Must be that climate change thing you're always talking about.'

I never talk about climate change around my dad.

Anyways, I decided to take a look at the precipitation totals at BWI airport for a few reasons:

1. To see if there's a noticeable trend.
2. To see if I could use data to make a case to my parents that climate change might just be something worth talking about.  It's always good to try to change a 75 year old's mind, right?

Why BWI to ask?  Well, I grew up, and my parents still live, two miles from BWI as the planes fly (if you draw a straight line from one of the runways, south eastward, you go right through my parents backyard).  Here's proof:

OK, that's not really proof, but you'll just have to trust me, planes fly over that house all day, and all night...all year...nonstop. I blocked out the address to prevent the paparazzi from hounding my parents when the brilliance of this post leaks out.

Where was I?

Oh yeah, definitive proof of climate change so I can stick it to my parents. 

Here's a graph of official annual precipitation readings at BWI from 1951-2017. Here's a link to the data.  The blue dots are rainfall in inches.  The black line is a simple linear regression line to show the trend (we all like simple linear regressions, right)?

There you have it.  Definitive proof that...well..proof of something.  Take that mom and dad!

I'm not an expert at statistics or anything (ok, maybe I am), but that looks like rainfall totals have been trending upward at BWI since 1951.  

"But wait!," you say, "it looks like 1999 was screwy and couldn't that be pulling the slope of that fake regression line upward?"

That's mighty astute of you.  Yes it could.  And not only that, this graph doesn't control for month-to-month variations that may affect annual totals.  I'll bet you didn't think of that, oh-astute-reader, did you? 

So let's look at the year-over-year monthly trend in rainfall at BWI from 1951-2017:

A couple of observations:

1. The screwy 1999 number seems to be driven by a weird observation in October of 1999--Did BWI really get over 40 inches of rain in October of 1999?  I'll look into that for you.
2. 75% of the months (9 out of 12) show an upward trend in rainfall totals from 1951-2017.  Three do not (February, March and November).  February isn't a real month so we can throw that out (how do you count an extra day once every 4 years?).  The trends in March and November look pretty flat.

So there you have it.

Conclusive proof that my parents need to stop telling their friends that I "Still believe in that climate change hoax."  

 

 

Climate Change

Last week (or at least that's when it was covered in the popular press), climate scientist Ed Hawkins put out a simple illustration of changes in global temperatures since 1850.  I used Dr. Hawkins image and had a little fun:

 

 

 

Top 100 Economics Blogs of 2018

I've been taking my OCSA (i.e., "sabbatical") very seriously

I've even taken a sabbatical from this blog. I think that the dog walk has become a substitute (guilty pleasure when I'm working at home*) for the blog post (guilty pleasure when I'm in the office). Whatever is going on, I have too much to say about the way the world works to let this go on much longer. 

*"Working at home" ... hahahahahahahaha!

 

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.