Environmental Economics

Is it possible for the federal government to raise taxes?

Here is one we are watching closely:

H.R. 5069 would allow the Department of the Interior (DOI) to raise the price charged for Federal Migratory Bird Hunting and Conservation Stamps (referred to as federal duck stamps). Federal duck stamps are annual permits sold by the federal government to hunt migratory waterfowl. The stamps also allow entry to National Wildlife Refuges that charge entrance fees. Sales proceeds are used to acquire wetlands for inclusion in the National Wildlife Refuge System.

CBO estimates that enacting H.R. 5069 would reduce the deficit by $5 million over the 2015-2024 period. Collections from the sale of duck stamps are recorded in the budget as revenues, deposited in the Migratory Bird Conservation Fund (MBCF), and later spent. Because the bill would affect direct spending and revenues, pay-as-you-go procedures apply. In addition, we estimate that implementing the bill would have no significant effect on discretionary spending.

H.R. 5069 contains no intergovernmental mandates as defined in the Unfunded Mandates Reform Act (UMRA) and would impose no costs on state, local, or tribal governments.

By increasing the annual fee for duck stamps, H.R. 5069 would impose a private-sector mandate, as defined in UMRA, on individuals required to obtain the stamp as a federal permit to hunt migratory waterfowl. Based on information from gaming officials at DOI, CBO estimates that the incremental cost of complying with the mandate would fall well below the annual threshold for private sector mandates ($152 million in 2014, adjusted annually for inflation).

via www.cbo.gov

If the federal government does manage to raise revenue it is only because almost all of the revenue will be used to buy wetland habitat, effectively scaling the no-new-taxes-no-matter-the-need constraint that we find ourselves in. 

This part of the cost estimate got me to thinking [pdf]:

H.R. 5069 would increase the price of federal duck stamps from $15 to $25 for an annual permit. Based on information provided by DOI, CBO estimates that federal revenues would increase by $119 million over the 2015-2024 period. That estimate includes a reduction in the number of stamps sold compared with the number that would be sold at a price of $15, reflecting CBO’s assessment of the effects of prior stamp price increases.

I'm not sure about the "CBO's assessment of the effects of prior stamp price increases" since the two most recent duck stamp price increases, $10 to $12.50 in 1989-90 and $12.50 to $15 in 1991-92, have been followed by increases in sales (the 1987-88 increase from $7.50 to $10 led a 7.3% decrease in sales, an elasticity of -0.22; you can get the data here).

It would be interesting to know how price sensitive the CBO thinks waterfowl hunters are. In a sport that requires thousands of dollars of equipment, I wonder how much a $10 increase would have on the participation decision. The FWS says that 1,517,647 duck stamps were sold in 2011-12 (pdf). If revenues increase by $13 million annual, my back of the envelope calculation suggests that they think they'll sell 1.42 million stamps.*

Most (I say most because I don't read them all, I don't even read a few, but all that I've read have done this) of the CBO's "cost analyses" are actually benefit-cost analyses where market prices are assumed constant. Under this assumption the benefits of a government program is the government revenue and the cost is the government expenditures. This reason I find this one interesting is that the policy is a price increase so that the one thing that is missing is the lost consumer surplus, which I estimate is about $400,000.* 

The Senate bill (S. 1865) would raise the price to $30 after five years of $25 and revenues are estimated to increase by $8 million. I'll leave these calculations as an exercise (i.e., I can't figure out why sales do up, unless we are adding a population trend). 

*Here is my logic (invoking ceteris paribus at the outset): Let's say that 1.5 million duck stamps are sold. At a price of $15 that is revenue of $22.5 million (which is the correct order of magnitude). Given a downward sloping linear demand revenue will rise by area a and fall by area e. The CBO estimates that the revenue increase (a - e) will equal $13 million suggesting, logically, inelastic demand (the picture is not to scale!). Based on this it looks like 1.42 million duck stamps are expected to be sold (i.e., 1.42 = [25.5+13]/25). These numbers suggest an elasticity of -0.08 which is more inelastic than the 1987-88 experience. 

The only cost that is not included in this calculation is the lost consumer surplus from area b. Area b is equal to $400,000. However, all is not lost because the waterfowl hunters that remain in the market will likely take more visits to wildlife refuges with more habitat, increasing consumer surplus [what am I missing?]. 

 

I'd like to teach the world to sing

This is outrageous, probably part of some Reagan-era Department of Interior program:

As part of an effort to provide equal opportunities across habitats and enrich the lives of wildlife throughout the nation, officials from the EPA unveiled a new biodiversity program Friday that will bus in species from different ecosystems. “We are firmly committed to creating a diverse biosphere by fostering relationships between flora and fauna with unique experiences and perspectives,” agency spokesman Adam Wilson said of the federally funded program, which launched this week by shuttling two dozen species of plants and animals from the Everglades to the northern Great Plains. “Before these exchanges, many fir trees in the Colorado Rockies, for example, might go their entire lives without ever meeting a clam. But soon, they’ll be able to live together in harmony and gain a new understanding of their different backgrounds and biomes.” ...

And no, I wasn't aware that this is from The Onion.

 

"Pondering existence value"

That was in the subject of an email I received yesterday from someone we'll call "friend."

Photo Credit: Brad Wimmer (who says "I was at the SD zoo, saw the gorillas and couldn't help but think of someone running ahead of the group, and then crashing through bushes.")

My nickname for my roommate in grad school was "Dirty Dave", but that was mostly a common pool resource problem

What do you do when you run out of contrived nicknames?

http://comicskingdom.com/mark-trail/2014-07-15

The best comment at the website is the first:

Chris must have heard that Mark won't fight dirty. Well played. Well played indeed.

And subsequent strips reveal that Mark is faster than a herd of frightened water Cape buffalo*. Here he is with the buffalo between himself and Lori (whom he claims not to be interested in ... don't lie to Dirty boy!) and here he is way out in front of them (and with Lori firmly in his grasp ... yes, we know something ain't right!). 

*http://wiki.answers.com/Q/Are_cape_buffalo_and_water_buffalo_the_same

Another example of natural resource firms response to endangered species listings

And theses ensue:

Now, federal officials are weighing putting [the sage grouse] on the endangered species list — setting off a mad scramble among the unlikeliest of allies to save the bird and avoid disrupting the nation’s enormous growth in energy production. With a range stretching over more than 165 million resource-rich acres across 11 states, the grouse is at the center of one of the country’s most important struggles: to balance the demand for energy against the needs of nature. And in the process, it has put two environmental priorities — preserving species and fostering renewable energy — on a collision course.

“Remember the economic impact of the spotted owl and how much it reduced timber production on federal lands?” Representative Cory Gardner, Republican of Colorado, said in an interview. “The sage grouse has seven times the acreage of the spotted owl. You are looking at billions of dollars in lost economic activity, millions of dollars in lost state and local revenues and tens of thousands of jobs being lost.”

Environmentalists say the only way to save the grouse is to restrict use of the lands — whether for energy, housing, mining, ranching, hunting or recreation — which is exactly what an endangered species designation would do. Already, federal officials have delayed, altered or denied permits for more than two dozen energy projects in the West because of the bird. ...

That prospect has prompted an unusual collaboration among state and industry leaders to show federal wildlife officials, who have until September 2015 to decide on the endangered designation, how the bird can coexist with economic development. And federal officials, frequently at odds with one another over such matters in the past, are in on the act, overseeing an enormous effort among all the affected states to pre-empt the designation.

via www.nytimes.com

Remember preemptive harvesting? If you were suspicious that you might have a red-cockaded woodpecker on your land then you would go ahead and cut down your longleaf pine trees ahead of the optimal rotation.The difference here is that the natural resource is underground and you can't destroy the habitat (well, you can but the birds are already there) before the species is put on the endangered list.

A good example of why we need ecosystem services valuation

Off-shore windfarms versus rare birds...who should win?

Invasive Specie or Star Wars Character?

The Columbus Dispatch reports that the Ohio Department of Natural Resources has released a new list of 10 species banned from being imported, exported, sold or possessed in Ohio. In the list below are the 10 evil invaders (some are edited to take away any identifying characteristics like 'shrimp' and others I used the scientific name because the ommon name is well, common) along with 5 names of Star Wars characters mixed in.  Have some fun and try to identify the Star Wars characters (the list of Ohio invasive species is linked below the list--so you are less temped to cheat).

1. Marron
2. Yabby
3. Dreissena polymorpha
4. Grand moff tarkin
5. Quagga
6. Rudd
7. Beru lars
8. Stone moroko
9. Zander
10. Wicket
11. Silurus glanis
12. Dikerogammarus
13. Wedge
14. Limnoperna fortune
15. Greedo

Here is the Columbus Dispatch article with the 10 banned species.

Well it's about dang time...

In the mail yesterday--get yours today (it will help our publisher recoup our whopping advance):

"Sea turtle eggs!"

The Comics Curmudgeon:

Mark Trail, 3/31/14

As was foretold in prophecy Friday, Mark has shrugged off a sucker-punch to the face and responded with fisticuffs of his own, somehow managing to wind up and knock Marlin down with a right hook despite literally being an inch and a half away from him. Still, this victory is bittersweet, as Mark looks poignantly at the avalanche of sea turtle eggs cascading comically out of Marlin’s green poachin’-sack. Yes, there’s an exclamation point at the end of his dialogue, but based on his stricken facial expression I would guess that this is as close as we’ve ever come to seeing Mark on the verge of tears, bereft over the senseless loss of endangered animal life.

By the way, is sea turtle egg-poaching an actual thing? Like, could those eggs ever hatch now that they’ve been removed from their nest and plopped in a big pile in a bag? Do people try to keep sea turtles as pets? Do people eat sea-turtle eggs? Have we been reading the wrong meaning of “poaching” in this storyline all along?

Mark Trail even thinks to himself with exclamation points!

What I'm keeping my eye on today

Crawfish, salamanders and frogs...oh my.

Federal environmental officials now estimate more than 20,000 gallons of crude oil — double the initial estimates — leaked from a pipeline into a nature preserve in southwest Ohio.

...

The 374-acre nature preserve in suburban Colerain Township is part of the Great Parks of Hamilton County system. Wildlife officials say animals including crawfish, salamanders and frogs have been affected by the oil, with a few found dead at the scene. Contaminated animals are being collected, cleaned and released, officials said, adding that colder weather, with freezing temperatures at night, has reduced the number of wildlife moving through the leak area.

via www.dispatch.com