Category Archive for: Environment [Return to Main]

Friday, April 18, 2014

Paul Krugman: Salvation Gets Cheap

The "price of solar panels has fallen more than 75 percent just since 2008":

Salvation Gets Cheap, by Paul Krugman, Commentary, NY Times: The Intergovernmental Panel on Climate Change ... has begun releasing draft chapters from its latest assessment, and ... the reading is as grim as you might expect. ...
But there is one piece of the assessment that is surprisingly, if conditionally, upbeat: Its ... the incredible recent decline in the cost of renewable energy, solar power...
Before I get to that..., however, let’s talk for a minute about the overall relationship between economic growth and the environment.
Other things equal, more G.D.P. tends to mean more pollution. ... But other things don’t have to be equal. There’s no necessary one-to-one relationship between growth and pollution.
People on both the left and the right often fail to understand this point. ... On the left, you sometimes find environmentalists asserting that to save the planet we must give up on the idea of an ever-growing economy; on the right, you often find assertions that any attempt to limit pollution will have devastating impacts on growth. But there’s no reason we can’t become richer while reducing our impact on the environment. ...
The sensible position ... has always been that ... if we give corporations and individuals an incentive to reduce greenhouse gas emissions, they will respond.

What form would that response take? ... One front many people didn’t take too seriously ... was renewable energy. ... And I have to admit that I shared that skepticism. ...
The climate change panel ... notes that “many RE [renewable energy] technologies have demonstrated substantial performance improvements and cost reductions”... The Department of Energy is willing to display a bit more open enthusiasm; it titled a report on clean energy released last year “Revolution Now.” That sounds like hyperbole, but you realize that it isn’t when you learn that the price of solar panels has fallen more than 75 percent just since 2008.
Thanks to this technological leap forward, the climate panel can talk about “decarbonizing” electricity generation as a realistic goal — and since coal-fired power plants are a very large part of the climate problem, that’s a big part of the solution right there. ...
So is the climate threat solved? Well, it should be. The science is solid; the technology is there; the economics look far more favorable than anyone expected. All that stands in the way of saving the planet is a combination of ignorance, prejudice and vested interests. What could go wrong? Oh, wait.

Tuesday, April 15, 2014

'Rising Sun'

Paul Krugman:

Rising Sun: Joe Romm draws our attention to the third slice of the latest IPCC report on climate change, on the costs of mitigation; the panel finds that these costs aren’t that big — a few percent of GDP even by the end of the century, which means only a trivial hit to the growth rate. ...
In fact, you should be optimistic...: the technological prospects for a low-emission economy have gotten dramatically better.
It’s kind of odd how little attention the media give to the solar revolution, but this is really huge stuff:
In fact, it’s possible that solar will displace coal even without special incentives. But we can’t count on that. What we do know is that it’s no longer remotely true that we need to keep burning coal to satisfy electricity demand. The way is open to a drastic reduction in emissions, at not very high cost.
And that should make us optimistic about the future, right? I mean, all that stands in our way is prejudice, ignorance, and vested interests. Oh, wait.

Monday, February 03, 2014

'Keystone: The Pipeline to Disaster'

In case you want to talk about this (I don't have a well-formed opinion on the pipeline itself, I haven't done enough reading about it, so hoping to learn something from the comments):

Keystone: The Pipeline to Disaster, by Jeff Sachs: The new State Department Environmental Impact Statement for the Keystone Pipeline does three things. First, it signals a greater likelihood that the pipeline project will be approved... Second, it vividly illustrates the depth of confusion of US climate change policy. Third, it self-portrays the US Government as a helpless bystander to climate calamity.. ...
The pipeline will ... facilitate the mass extraction and use of Canada's enormous unconventional supplies. Therein lies the problem. ... The economic implications of the climate science are clear. Either we keep some of the world's oil, gas, and coal reserves under the ground..., or we wreck the planet. ... The most important single step is to keep most of the coal from being burned. ...
The Keystone pipeline is crucial to the global carbon budget. If the world deploys massive unconventional oil sources like Canada's oil sands we will exceed the carbon budget,... cheaper, (relatively) cleaner, and lower-CO2 oil is available. ...
Herein lies the tragic, indeed fatal, flaw of the State Department review. The ... State Department simply assumes ... that the oil sands will be developed and used one way or another. ... According to the State Department, in other words, the US Government is just a passive spectator to global climate change. Either the pipeline is built or the oil will be shipped by other means. ...
But do not lose hope. ... The vast majority of Americans want safety for themselves, their children, and the rest of humanity. Our generation can still turn the tide against environmental disaster.

Tuesday, November 12, 2013

'The Inequality of Climate Change'

Annie Lowrey:

The Inequality of Climate Change, by Annie Lowrey, NY Times: ... “No nation will be immune to the impacts of climate change,” said a major World Bank report on the issue last year. “However, the distribution of impacts is likely to be inherently unequal and tilted against many of the world’s poorest regions, which have the least economic, institutional, scientific and technical capacity to cope and adapt.”
That is the firmly established view of numerous national governments, development and aid groups and the United Nations as well. ...
The reason is twofold. First..., poorer lower-latitude regions are expected to face desertification and more-intense storms. The increase in the sea level might be 15 to 20 percent higher in the tropics than the global average, meaning flooding for coastal cities in regions like southern Asia. Droughts are also expected to increase significantly in lower-latitude areas, including in Africa and the Middle East. (The United States and Australia might also be hard hit...) Moreover, in many countries, the vulnerable poor might cluster in areas where climate change might have a disproportionate impact, like flood zones and dry rural areas. ...
The second, more significant reason is that the poorer the country, the harder it might be for it to respond to a changing climate. ...
For that reason, many poorer countries hold rich countries like the United States responsible for climate change, and want them to help pay for its effects. ...
“Poverty reduction and climate change are linked,” said Dr. Jim Yong Kim, the president of the World Bank... He concluded: “If we don’t confront climate change, we won’t end poverty.”

Thursday, October 24, 2013

'Gambling with Civilization'

In case you missed this in the daily links. From Paul Krugman:

Gambling with Civilization, by Paul Krugman, NYRB [Review of The Climate Casino: Risk, Uncertainty, and Economics for a Warming World, by William D. Nordhaus]:
1. Forty years ago a brilliant young Yale economist named William Nordhaus published a landmark paper, “The Allocation of Energy Resources,” that opened new frontiers in economic analysis. [1] Nordhaus argued that to think clearly about the economics of exhaustible resources like oil and coal, it was necessary to look far into the future, to assess their value as they become more scarce—and that this look into the future necessarily involved considering not just available resources and expected future economic growth, but likely future technologies as well. Moreover, he developed a method for incorporating all of this information—resource estimates, long-run economic forecasts, and engineers’ best guesses about the costs of future technologies—into a quantitative model of energy prices over the long term.
The resource and engineering data for Nordhaus’s paper were for the most part compiled by his research assistant, a twenty-year-old undergraduate... It was an invaluable apprenticeship. My reasons for bringing up this bit of intellectual history, however, go beyond personal disclosure—although readers of this review should know that Bill Nordhaus was my first professional mentor. For if one looks back at “The Allocation of Energy Resources,” one learns two crucial lessons. First, predictions are hard, especially about the distant future. Second, sometimes such predictions must be made nonetheless.
Looking back at “Allocation” after four decades, what’s striking is how wrong the technical experts were about future technologies. For many years all their errors seemed to have been on the side of overoptimism, especially on oil production and nuclear power. More recently, the surprises have come on the other side, with fracking having the biggest immediate impact on markets, but with the growing competitiveness of wind and solar power—neither of which figured in “Allocation” at all—perhaps the more fundamental news. For what it’s worth, current oil prices, adjusted for overall inflation, are about twice Nordhaus’s prediction, while coal and especially natural gas prices are well below his baseline.
So the future is uncertain, a reality acknowledged in the title of Nordhaus’s new book, The Climate Casino: Risk, Uncertainty, and Economics for a Warming World. Yet decisions must be made taking the future—and sometimes the very long-term future—into account. ... And as Nordhaus emphasizes, although perhaps not as strongly as some would like, when it comes to climate change uncertainty strengthens, not weakens, the case for action now.
Yet while uncertainty cannot be banished from the issue of global warming, one can and should make the best predictions possible. Following his work on energy futures, Nordhaus became a pioneer in the development of “integrated assessment models” (IAMs), which try to pull together what we know about two systems—the economy and the climate—map out their interactions, and let us do cost-benefit analysis of alternative policies. [2] At one level The Climate Casino is an effort to popularize the results of IAMs and their implications. But it is also, of course, a call for action. I’ll ask later in this review whether that call has much chance of succeeding. ...[continue]...

Wednesday, October 23, 2013

'Climate Change, Public Policy, and the University'

Robert Stavins:

Climate Change, Public Policy, and the University, by Robert Stavins: Over the past year or more, across the United States, there has been a groundswell of student activism pressing colleges and universities to divest their holdings in fossil fuel companies from their investment portfolios.  On October 3, 2013, after many months of assessment, discussion, and debate, the President of Harvard University, Drew Faust, issued a long, well-reasoned, and – in my view – ultimately sensible statement on “fossil fuel divestment,” in which she explained why she and the Corporation (Harvard’s governing board) do not believe that “university divestment from the fossil fuel industry is warranted or wise.”  I urge you to read her statement, and decide for yourself how compelling you find it, and whether and how it may apply to your institution, as well.
About 10 days later, two leaders of the student movement at Harvard responded to President Faust in The Nation Andrew Revkin, writing at the New York Times Dot Earth blog, highlighted the fact that the students responded in part by saying, “We do not expect divestment to have a financial impact on fossil fuel companies …  Divestment is a moral and political strategy to expose the reckless business model of the fossil fuel industry that puts our world at risk.”
I agree with these students that fossil-fuel divestment by the University would not have financial impacts on the industry, and I also agree with their implication that it would be (potentially) of symbolic value only.  However, it is precisely because of this that I believe President Faust made the right decision.  Let me explain. ...

Monday, September 30, 2013

'World Leaders Must Act Faster on Climate Change'

Speaking of the GOP undermining of the public's faith in the government's ability to solve important problems. This is from Nicholas Stern:

World leaders must act faster on climate change, by Nicholas Stern, Commentary, Financial Times: Governments and businesses should be left in no doubt about the dangers of delaying further cuts in greenhouse gas emissions following the publication of the new assessment report by the Intergovernmental Panel on Climate Change. ... [W]e are seeing fundamental changes to the world’s climate, which could soon be ... causing mass migration and endless conflict. This should focus minds...
But all governments must recognise that they themselves potentially pose the biggest threat. There is a danger that, through vacillation and confusion, they will create policy risk that undermines the confidence of the companies largely responsible for delivering the transition to low-carbon economic growth and development. ...
Some politicians will still seek to deny the science and downplay the risks. Many of them have vested financial interests in protecting the status quo, or ideological beliefs that mean they cannot acknowledge the logic of correcting market failures ... to strengthen the role of markets... Although they are small in number, they still have the power to create confusion and slow action.
But everywhere evidence is emerging of opportunities afforded by new energy sources that are more efficient and less polluting. No investor should fail to be impressed by how rapidly the costs of solar photovoltaics and other technologies are falling. ...
The new IPCC report should now convince all world leaders to accelerate their efforts to tackle climate change and create a safer and more prosperous world.

Given the (intentionally created) political climate surrounding attempts to address this problem, it's hard for me to imagine anything of significance happening anytime soon.

Wednesday, September 25, 2013

Understanding the 'Economic' Arguments Against Dealing with Global Warming

Brad DeLong:

"But We Must Do the Wrong Thing!": Understanding the "Economic" Arguments Against Dealing with Global Warming: The market-based economics that I was brought upon had four principles:

  1. It is important to get the distribution of wealth right, or as right as you can, so that household willingness-to-pay properly represent social marginal values.
  2. It is important to get aggregate demand right--for the government to create the right amount of safe and of liquid assets to match shifting private sector demand and so make Say's Law true in practice if not in theory--so that the problems economic policy is dealing with are Harberger Triangles and not Okun Gaps.
  3. Then you can let the competitive market rip--as long, that is, as...
  4. You have also imposed the right Pigovian taxes and bounties to deal with externalities.

"But the Coase Theorem" you say? The Coase Theorem is three things:

  1. An injunction to carve property rights at the joints--to bundle powers, rights, obligations so that you have to impose as little in the way of Pigovian taxes and bodies as possible.
  2. A powerful way of thinking about whether the proper Pigovian taxes and bounties are best imposed through Article I processes (legislation) or Article III processes (adjudication).
  3. A thought experiment that, as Ronald Coase complained until the day he died, was seized by George Stigler for his own purposes and is much more often misinterpreted than applied.

The self-deluded who don't know what they're doing and the vested interests that fear they would be impoverished when we to do the right thing dealing with global warming are still holding on to their first line of defense: that global warming is not happening. They have, however, built a second line of defense: that global warming was happening until 1995, but then something stopped it, and it will not resume. And behind that is the third line of defense that they are now building which we are here to think about today: that we cannot afford to do the right Pigovian tax-and-bounty thing, for dealing with global warming will cost jobs and incomes.

This is the fifth policy-relevant case I have seen in recent years of the political right that claims to love the market system denying and abandoning the basic principles that underpin the technocrat judgment that the market system can and often is a wonderful social economic calculation, allocation, and distribution mechanism. It is almost as if their previous advocacy of the technocratic case for the market system was simply a mask for their vested interests. We have seen this in opposition to doing the right thing in financial regulation; in the management of aggregate demand; in the provision of the right level of social insurance in the long run; and in shifting the policy mix to partially offset the medium-run rapid rise in inequality. Milton Friedman and George Stigler always used to say that you were better off relying on market contestability rather than capture of old regulatory bureaucracies like the interstate commerce commission to deal with the market failures created by private monopoly, but the problems like excessive inequality and poverty on the one hand and pollution on the other required government action--a negative income tax in the first case, and a market-based antipollution policy via Pigovian taxes and bounties in the second. That is now, largely, out the window.

It is important to recognize what is going on here. ...

There's much, much more in the full post.

Saturday, September 14, 2013

'Ronald Coase, a Pragmatic Voice for Government’s Role'

Robert Frank:

Ronald Coase, a Pragmatic Voice for Government’s Role, by Robert Frank, Commentary, NY Times: ... Nobel Memorial Prize in Economic Science [winner] ... Ronald H. Coase ... spent most of his career at the University of Chicago, where he was revered by its many free-market enthusiasts as the world’s foremost authority on ... negative externalities... He became their champion because they thought his framework provided the most cogent arguments for limiting government’s role in economic life.
That belief was profoundly mistaken. In time, I predict, Mr. Coase’s framework will instead be seen as providing not only the best explanation for why governments regulate..., but also the best advice on how they might regulate more effectively. ...
Mr. Coase’s work cannot be read as a case for minimal government. On the contrary, his message was more purely pragmatic: Because we can’t negotiate efficient private solutions most of the time, we must ask whether laws and other institutions can help steer us toward solutions we would have chosen if negotiation had been practical. ...
Because population density has been rising, behaviors with harmful side effects have been growing steadily more important. Our continued prosperity ... will require thinking clearly about how to mitigate the resulting damage. Mr. Coase has pointed the way forward.

Thursday, September 12, 2013

'Remembering Ronald Coase’s Contributions'

In his post Remembering Ronald Coase’s Contributions, Robert Stavins notes a big surprise, the Wall Street Journal's editorial page being less than forthright (he is summarizing a statement in "an effective essay" by Severin Borenstein on "the effect that Coase’s thinking had decades ago on his own intellectual development"):

the Wall Street Journal in its ... tribute to Coase ... twisted the implications of his work to fit the Journal’s view of the world

Stavins goes on to discuss "The Coase Theorem and the Independence Property":

... In our article, “The Effect of Allowance Allocations on Cap-and-Trade System Performance,” Hahn and I took as our starting point a well-known result from Coase’s work, namely, that bilateral negotiation between the generator and the recipient of an externality will lead to the same efficient outcome regardless of the initial assignment of property rights, in the absence of transaction costs, income effects, and third party impacts. This result, or a variation of it, has come to be known as the Coase Theorem.
We focused on an idea that is closely related to the Coase theorem, namely, that the market equilibrium in a cap-and-trade system will be cost-effective and independent of the initial allocation of tradable rights (typically referred to as permits or allowances). That is, the overall cost of achieving a given emission reduction will be minimized, and the final allocation of permits will be independent of the initial allocation, under certain conditions (conditional upon the permits being allocated freely, i.e., not auctioned). We called this the independence property. It is closely related to a core principle of general equilibrium theory (Arrow and Debreu 1954), namely, that when markets are complete, outcomes remain efficient even after lump-sum transfers among agents.
The Practical Political Importance of the Independence Property
...The reason why this property is of such great relevance to ... public policy is that it allows equity and efficiency concerns to be separated. In particular, a government can set an overall cap of pollutant emissions (a pollution reduction goal) and leave it up to a legislature to construct a constituency in support of the program by allocating shares of the allowances to various interests, such as sectors and geographic regions, without affecting either the environmental performance of the system or its aggregate social costs. Indeed, this property is a key reason why cap-and-trade systems have been employed and have evolved as the preferred instrument in a variety of environmental policy settings.
...Does the Property Always Hold?
...Hahn and I ... carried out an empirical assessment of the independence property in past and current cap-and-trade systems...
I hope some of may find time to read our article, but a quick summary of our assessment is that we found modest support for the independence property in the seven cases we examined (but also recognized that it would surely be useful to have more empirical research in this realm).
Political Judgments
That the independence property appears to be broadly validated provides support for the efficacy of past political judgments regarding constituency building through legislatures’ allowance allocations in cap-and-trade systems. Governments have repeatedly set the overall emissions cap and then left it up to the political process to allocate the available number of allowances among sources to build support for an initiative without reducing the system’s environmental performance or driving up its cost.
This success with environmental cap-and-trade systems should be contrasted with many other public policy proposals for which the normal course of events is that the political bargaining that is necessary to develop support reduces the effectiveness of the policy or drives up its overall cost. So, the independence property of well-designed and implemented cap-and-trade systems is hardly something to be taken for granted. It is of real political importance and remarkable social value. It is just one of many lasting contributions of Ronald Coase.

Saturday, August 31, 2013

A Carbon Tax That America Could Live With?

I expected Greg Mankiw's latest column to be about sales of his textbook. That's important news everyone should know about. But in a complete surprise, he talked about carbon taxes instead:

A Carbon Tax That America Could Live With: ... If the government charged a fee for each emission of carbon, that fee would be built into the prices of products and lifestyles. When making everyday decisions, people would naturally look at the prices they face and, in effect, take into account the global impact of their choices. In economics jargon, a price on carbon would induce people to “internalize the externality.”
A bill introduced this year by Representatives Henry A. Waxman and Earl Blumenauer and Senators Sheldon Whitehouse and Brian Schatz does exactly that. Their proposed carbon fee — or carbon tax, if you prefer — is more effective and less invasive than the regulatory approach that the federal government has traditionally pursued.
The four sponsors are all Democrats, which raises the question of whether such legislation could ever make its way through the Republican-controlled House of Representatives. The crucial point is what is done with the revenue raised by the carbon fee. If it’s used to finance larger government, Republicans would have every reason to balk. But if the Democratic sponsors conceded to using the new revenue to reduce personal and corporate income tax rates, a bipartisan compromise is possible to imagine. ...

Mankiw once said that economists shouldn't consider the political realities of policy, they should just recommend the best policy:

Politics aside: I have finally gotten around to reading the new Ebenstein biography of Milton Friedman. Here is a quotation from Milton that I particularly like:

“The role of the economist in discussions of public policy seems to me to be to prescribe what should be done in light of what can be done, politics aside, and not to predict what is ‘politically feasible’ and then to recommend it.”

So now, when I advocate raising gasoline taxes and cutting income taxes, and my conservative friends tell me that the plan is politically unrealistic, that the government will just keep the extra revenue instead of cutting income taxes, I can quote Milton....

I get that Mankiw really wants his personal taxes to be lowered, he seems to hate the idea of paying a fair share in taxes from what he makes from the textbook he hawks at every opportunity. But why, from an economic standpoint, is lowering his personal taxes (corporate taxes too) the best option (as opposed to simply trying to find something that is politically acceptable to the right)? Has he made that argument? The revenue could be used to help low income households that would be hurt by the tax, for deficit reduction without cutting programs, there are all sorts of ways the revenue could be used and it's not at all clear that his recommendation is, from an economic rather than a political view, the best way to use the revenue from a carbon tax.

Wednesday, August 07, 2013

'A Market to Save Whales?'

What do you think about this proposal?:

A Market to Save Whales?, by Timothy Taylor: The International Whaling Commission imposed a moratorium on commercial whaling in 1986, which is still in effect. However, the moratorium has effectively allowed "scientific" whaling (mainly Japan), "subsistence" whaling (various aboriginal groups), and limited commercial whaling (mainly by Norway and Iceland). The total number of whales caught has doubled since the 1990s to about 2,000 per year, which is a pace that many biologists consider to be unsustainably high. After watching the moratorium approach struggle and fail over the last quarter-century, it's time to think about alternatives. In the Spring 2013 edition of Issues in Science and Technology, Ben A. Minteer and Leah R. Gerber discuss the possibility of "Buying Whales to Save Them."

What Minteer and Gerber have in mind is that the International Whaling Commission or some similar body would set a quota for the number of whales that could be taken, based on estimates of sustainable catch from biologists. These quotas would be marketable; in particular, environmentalist groups could purchase the right to take a whale--but then not do so. ...

As you might expect, this kind of proposals is controversial. Many environmentalists feel that putting a value on whales is unethical, a betrayal of the underlying values involved. Other environmentalists, especially those with an economic turn of mind, note that if those who would be catching whales sell their quota to those who do not wish to catch whales, both parties can be benefit from the exchange--and the result may be that fewer whales are killed. Much of Minteer and Gerber's article is a consideration of these issues. ...

My own sense, trained as I am into economic ways of thinking, is that if ethics are to be meaningful, they need to engage with pragmatic realities. The moratorium on commercial whaling is not, in fact, protecting a biologically sufficient number of whales. The arguments that whales should not be hunted, whatever their merits, have not been winning where it counts--that is, as measured by the size of the whale population. Arguments about the ethics whaling have even not brought us to a biologically sustainable situation, much less to the far more stringent limits on whaling that many environmentalists would prefer. In that situation, real-world ethical behavior calls for looking at alternatives.

Here's a similar proposal to save rhinos: Scientists Call for Legal Trade in Rhino Horn. Not sure it would work, but in my view it would be worth trying.

Saturday, August 03, 2013

'A Republican Case for Climate Action'

Republican administrators of the E.P.A under Presidents Richard Nixon, Ronald Reagan, George Bush and George W. Bush try to convince other Republicans that climate change is real, and that we need to do something about it now, not later:

A Republican Case for Climate Action, by William D. Ruckelshaus, Lee M. Thomas, William K. Reilly, and Christine Todd Whitman, Commentary, NY Times: Each of us took turns over the past 43 years running the Environmental Protection Agency. We served Republican presidents, but we have a message that transcends political affiliation: the United States must move now on substantive steps to curb climate change, at home and internationally.
There is no longer any credible scientific debate about the basic facts: our world continues to warm... The costs of inaction are undeniable. ... And the window of time remaining to act is growing smaller: delay could mean that warming becomes “locked in.”
A market-based approach, like a carbon tax, would be the best path to reducing greenhouse-gas emissions, but that is unachievable in the current political gridlock in Washington. Dealing with this political reality, President Obama’s June climate action plan lays out achievable actions that would deliver real progress. He will use his executive powers to require reductions in the amount of carbon dioxide emitted by the nation’s power plants... The president also plans to use his regulatory power to limit the powerful warming chemicals known as hydrofluorocarbons...
Rather than argue against his proposals, our leaders in Congress should endorse them and start the overdue debate about what bigger steps are needed and how to achieve them — domestically and internationally.
As administrators of the E.P.A under Presidents Richard M. Nixon, Ronald Reagan, George Bush and George W. Bush, we held fast to common-sense conservative principles — protecting the health of the American people, working with the best technology available and trusting in the innovation of American business and in the market to find the best solutions for the least cost.
That approach helped us tackle major environmental challenges to our nation and the world: the pollution of our rivers... The solutions we supported worked, although more must be done. ...
We can have both a strong economy and a livable climate. All parties know that we need both. The rest of the discussion is either detail, which we can resolve, or purposeful delay, which we should not tolerate. ... The only uncertainty about our warming world is how bad the changes will get, and how soon. What is most clear is that there is no time to waste.

Friday, June 28, 2013

Paul Krugman: Invest, Divest and Prosper

The war on coal won't cost jobs in a depressed economy, it "could be just what our economy needs":

Invest, Divest and Prosper, by Paul Krugman, Commentary, NY Times: It has been a busy news week, what with voting rights, gay marriage and Paula Deen. Even so, it’s remarkable how little attention the news media gave to President Obama’s new “climate action plan.”...; this is ... a very big deal. For this time around, Mr. Obama wasn’t touting legislation we know won’t pass. The new plan is, instead, designed to rely on executive action. This means that ... it can bypass the anti-environmentalists who control the House of Representatives.
Republicans realize this, and ... right now they don’t seem eager to attack climate science, maybe because that would make them sound unreasonable (which they are). Instead, they’re ... denouncing the Obama administration for waging a “war on coal” that will destroy jobs.
And you know what? They’re half-right. The new Obama plan is, to some extent, a war on coal — because reducing our use of coal is, necessarily, going to be part of any serious effort to reduce greenhouse gas emissions. But making war on coal won’t destroy jobs. In fact, serious new regulation of greenhouse emissions ...
It’s always important to remember that what ails the U.S. economy right now isn’t lack of productive capacity, but lack of demand. The housing bust, the overhang of household debt and ill-timed cuts in public spending have created a situation in which nobody wants to spend; and because your spending ... this leads to a depressed economy over all. ...
Suppose that electric utilities, in order to meet the new rules, decide to close some existing power plants and invest in new, lower-emission capacity. Well, that’s an increase in spending, and more spending is exactly what our economy needs.
O.K., it’s still not clear whether any of this will happen. Some of the people I talk to are cynical..., believing that the president won’t actually follow through. All I can say is, I hope they’re wrong.
Near the end of his speech, the president urged his audience to: “Invest. Divest. Remind folks there’s no contradiction between a sound environment and strong economic growth.” Normally, one would be tempted to dismiss this as the sound of someone waving away the need for hard choices. But, in this case, it was simple good sense: We really can invest in new energy sources, divest from old sources, and actually make the economy stronger. So let’s do it.

Tuesday, May 28, 2013

'China and the Environmental Kuznets Curve'

Tim Taylor:

China and the Environmental Kuznets Curve: The original Kuznets curve posited, back in 1955, that inequality of incomes would follow an inverted-U pattern as a nation's economy developed, first rising, and then declining. In 1955, this looked reasonable! The "environmental Kuznets curve" suggests that pollution may follow an inverted-U pattern as a nation's economy develops. Pollution first rises as a low income nation industrializes with few limitations on pollution. But then the nation becomes better-off and more able and willing to pay the costs of limiting pollution, and the nation's economy shifts from industry to services, and pollution levels fall. For a useful overview article, Susmita Dasgupta, Benoit Laplante, Hua Wang, and David Wheeler wrote on "Confronting the Environmental Kuznets Curve" in the Winter 2002 issue of the Journal of Economic Perspectives. (Like all articles in JEP, it is freely available online compliments of the American Economic Association. Full disclosure: I've been the Managing Editor of JEP for the last 26 years.)
Of course, the environmental Kuznets curve is a theory that needs to be supported or refuted with evidence... And the experience of China, with its burgeoning economy and extraordinary environmental issues, is at the center of the debate. ...
The conventional environmental Kuznets is that emissions of pollutants rise up until some level between about $5000 and $8000 in per capita income, and then fall after that point. There is some historical evidence to support this claim. ...
According to the World Bank, China's per capita GDP was $5,445 in 2011, so it is just reaching the levels where its pollution should first start to level off, and then to decline. ...
Interestingly, there are signs that for some pollutants, the level of pollution is no longer rising with the growth of China's economy. For example, here's a figure about air pollution. The top line shows the growth of GDP. Emissions of sulfur dioxides and soot have not been rising with GDP, and even emissions of carbon dioxide have been lagging behind the rise in GDP in the last few years.
Here's a similar figure for water pollution. Chemical oxygen demand (COD) measures the level of organic pollutants in water. Both that measure and wastewater are at least not rising at the same pace as GDP.
It remains true that China's amount of pollution relative to its economic output is high by the standards of high income countries. ...
The policy prescription for reducing pollution in China is clear enough: close down older facilities, and make sure their replacements have up-to-date anti-pollution equipment; keep building sewage treatment facilities; put a price on polluting activities to encourage conservation; and so on. Sam Hill's paper has details.
But ultimately, China's path along the environmental Kuznets curve will be determined by politics and public pressure, and public pressure in China does seem to be building for stronger environmental protection. The (wonderfully named) Elizabeth C. Economy at the Council of Foreign Relations recently wrote a brief piece on "China’s Environmental Politics: A Game of Crisis Management," which notes the growing number of environmental public protests in China. In a society under such a high degree of government control, environmental protests can become a place where those discontented with government have a semi-safe space for dissent.

Tuesday, May 21, 2013

'The Climate Skeptics Have Already Won'

Martin Wolf:

Humanity has decided to yawn and let the real and present dangers of climate change mount. ... Judged by the world’s inaction, climate skeptics have won..., however rational it may be to seek to lower the risk of catastrophic outcomes, this is not what is happening now or seems likely to happen in the foreseeable future. ...

The attempt to shift our choices away from the ones now driving ever-rising emissions has failed. It will, for now, continue to fail. The reasons for this failure are deep-seated. Only the threat of more imminent disaster is likely to change this and, by then, it may well be too late. This is a depressing truth. It may also prove a damning failure.

As he says, it's not too late, "Unless the most apocalyptic scenario happens, humanity may be able to curb emissions and buy itself time," but the clock is running and it's hard to see how meaningful change will come about without substantial changes in the political environment. Gridlock favors the skeptics.

Thursday, March 07, 2013

'The Sordid History of Cap-and-Trade'

Richard Schmalensee and Robert Stavins on how "conservatives are choosing to demonize their own market-based creation" for addressing the market failures that lead to "large-scale environmental problems":

The sordid history of Congressional acceptance and rejection of cap-and-trade: Implications for climate policy, by Richard Schmalensee and Robert N. Stavins, VoxEU.org: Not so long ago, cap-and-trade mechanisms for environmental protection were popular in Congress. Now, such mechanisms are denigrated. What happened? This column tells the sordid tale of how conservatives in Congress who once supported cap and trade now lambast climate change legislation as ‘cap-and-tax’. Ironically, conservatives are choosing to demonize their own market-based creation. The successful conservative campaign that disparaged cap-and-trade means it may now be politically impossible to promote it in the US. The good news? Elsewhere, cap and trade is now a proven, viable option for tackling large-scale environmental problems. ...

Wednesday, February 20, 2013

China Says It May Implement a Carbon Tax

China may implement a (modest) carbon tax:

Taxing Carbon, by Vikas Bajaj, NY Times: Long considered the biggest holdout in climate change negotiations, China said this week that the country would implement new taxes designed to curb greenhouse gas emissions. Officials in Beijing provided few details, but a report by the state-owned Xinhua news service suggested that the government is working on a relatively modest plan. ...
The Xinhua report ... did not say how big a tax the country would impose, but it pointed to a three-year-old proposal by government experts that would have levied a 10-yuan ($1.60) per ton tax on carbon in 2012 and raised it to 50-yuan ($8) a ton by 2020. Those prices are far below the $80 (500-yuan) a ton that some experts have suggested would be needed to achieve “climate stability,” and which would raise the cost of gasoline by about 70 American cents a gallon.
China’s plan will not make a serious dent in global warming, though the tax may still have some beneficial impact within the country, where air pollution is a serious problem. ...
Meanwhile, in the U.S., many members of Congress find the idea of carbon taxes totally anathema and think such taxes would wreck the economy. They might, however, want to consider a proposal promoted by Mr. Hansen that would take the money collected from carbon taxes — or carbon fees as he prefers to call them — and rebate it in full to individuals. That would help consumers pay for more expensive electricity and gasoline, while giving them an incentive to cut their use of energy and fossil fuels. It’s an elegant way to limit damage to the economy while giving people incentives to do what is right for the planet.

Contrary to what "many members of Congress" (i.e. many Republicans) claim, eliminating a market failure through a carbon tax moves the economy closer to the optimal growth path rather than further from it.

Wednesday, February 06, 2013

Jagdish Bhagwati Does Not Seem to Like Al Gore

Not sure where to start with this one other than to note that Jagdish Bhagwati does not seem to like Al Gore:

Futurama, by Jagdish Bhagwati: ...Al Gore ... surely succeeded beyond his wildest expectations as the author of An Inconvenient Truth. But his phenomenal success had little to do with science (which has remained somewhat controversial: many of us remember for instance the not-too-distant scare about global cooling, also from climate scientists) and much to do with the photographs of polar bears caught on drifting ice as glaciers melted. An image like that is what we all need when we push our pet agendas. Alas, none of us is so fortunate. Nor is Gore as he turns now to writing about our future. ...
The problem Gore faces in the bulk of this book therefore is that his identification of problems, and his proposed solutions, are not compelling. His erudition is considerable but is necessarily limited since he casts his net wide, and he is both unfamiliar with important issues pertinent to his analysis and also shallow in his prescriptions for remedial policies. ...
Given Gore’s justified reputation on climate change, a disappointing feature of Gore’s book is in the chapter titled “The Edge.” I agree with him that the evidence on climate change, and the contribution to it by man-made carbon emissions, is about as good as science can provide; and he is persuasive in his sketch of the scenario of the dangers that global warming, unchecked, hold for mankind. Where he fails is in the remedies that he discusses. To focus on just one issue: there is now agreement from the last meeting at Cancún on the attempted renewal of Kyoto Protocol that $100 billion be found annually to create new technologies of mitigation and adaptation to climate change. It is expected that a significant share of this will be public funds. We have the precedent that public monies should largely be used to create public good: thus the new seeds under the green revolution were publicly financed and they were available to everyone virtually for free. Should we then not expect the green technologies developed with public funds to be available for free to Mars, China, and India?
But, to my knowledge, Gore has not embraced this proposal, which would make, say, India accept more ambitious targets of carbon reduction because it would reduce the cost of doing so. I would not make the ferocious charges that Gore levels at the opponents of climate change (see page 283). But may I wonder whether the reason for Gore’s omission is that he is heavily invested in green-energy stocks and would like to see public funds to be used only for private payoffs by these firms?
The good in the book is therefore offset by the bad. But even the bad will produce good if it irritates us into thinking harder about the many issues that Gore correctly insists we must confront.

Gore's sin is not embracing a particular proposal, and it must be because "he is heavily invested in green-energy stocks?" Pretty thin charge, and pretty speculative -- I expected a more compelling complaint. (Bhagwati agress with Gore on the science, says he's persuasive, etc., and acts like the know-it-all judge of all things related to climate change, yet he tosses out the global cooling thing? There's a reason this is called the "global cooling myth.")

In another part, I was surprised to hear a call for unions:

...The problem in this world of competition among similar products is that comparative advantage is now fragile: it has a “knife-edge” quality. One day you have it; the next day you do not. Almost every entrepreneur has a rival breathing down his neck; and this need not be from China or India, with their “low wages”—what Gore frets about—but may be Poland or France or Sweden. There are three implications.
First, firms need flexibility in firing if they are to hire.
Second, we can no longer assure economic security for workers by giving them lifetime employment. The security has to be for the worker herself, unrelated to specific occupation and employment.
Third, the volatility also means that we can no longer expect firms to provide training and hence “human capital” to blue-collar workers who can be expected to leave at the next sign of trouble at their plant or firm. We therefore have to provide this human capital through efforts by unions, employers, community colleges, etc.
Gore also accepts uncritically the notion that we are doomed to greater inequality in a globalized world of trade and multinational investment. The evidence is more mixed than he reports...

I think it would only be fair to note the incentives work the other way as well. With firms willing to fire workers at the drop of a hat -- older social obligations to retain workers through tough times are largely gone -- there's no incentive for workers to invest in themselves if the human capital is unique to the particular firm. Why bother if you are unlikely to be there for very long? (That is, I don't think the problem is workers who "leave at the next sign of trouble." f course they'll leave for another opportunity if they fear they'll be fired in the near future due to the "trouble.")

Sunday, January 27, 2013

Climate Policy in Obama's Second Term

I think of Robert Stavins as being on the optimistic side when it comes to action on climate change, but even he seems discouraged despite Obama's mention of this issue in his inaugural address:

The Second Term of the Obama Administration, by Robert Stavins: In his inaugural address on January 21st, President Obama surprised many people – including me – by the intensity and the length of his comments on global climate change.  Since then, there has been a great deal of discussion in the press and in the blogosphere about what climate policy initiatives will be forthcoming from the administration in its second term. ...
Although I was certainly surprised by the strength and length of what the President said in his address, I confess that it did not change my thinking about what we should expect from the second term.  Indeed, I will stand by an interview that was published by the Harvard Kennedy School on its website five days before the inauguration (plus something I wrote in a previous essay at this blog in December, 2012).  Here it is, with a bit of editing to clarify things, and some hyperlinks inserted to help readers. ...
Q: In the Obama administration’s second term, are there openings/possibilities for compromises...?
A: It is conceivable – but in my view, unlikely – that there may be an opening for implicit (not explicit) “climate policy” through a carbon tax. At a minimum, we should ask whether the defeat of cap-and-trade in the U.S. Congress, the virtual unwillingness over the past 18 months of the Obama White House to utter the phrase “cap-and-trade” in public, and the defeat of Republican Presidential candidate Mitt Romney indicate that there is a new opening for serious consideration of a carbon-tax approach to meaningful CO2 emissions reductions in the United States.
First of all, there surely is such an opening in the policy wonk world. Economists and others in academia, including important Republican economists such as Harvard’s Greg Mankiw and Columbia’s Glenn Hubbard, remain enthusiastic supporters of a national carbon tax. And a much-publicized meeting in July, 2012, at the American Enterprise Institute in Washington, D.C. brought together a broad spectrum of Washington groups – ranging from Public Citizen to the R Street Institute – to talk about alternative paths forward for national climate policy. Reportedly, much of the discussion focused on carbon taxes.
Clearly, this “opening” is being embraced with enthusiasm in the policy wonk world. But what about in the real political world? The good news is that a carbon tax is not “cap-and-trade.” That presumably helps with the political messaging! But if conservatives were able to tarnish cap-and-trade as “cap-and-tax,” it surely will be considerably easier to label a tax – as a tax! Also, note that President Obama’s silence extends beyond disdain for cap-and-trade per se. Rather, it covers all carbon-pricing regimes.
So as a possible new front in the climate policy wars, I remain very skeptical that an explicit carbon tax proposal will gain favor in Washington. ...
A more promising possibility – though still unlikely – is that if Republicans and Democrats join to cooperate with the Obama White House to work constructively to address the short-term and long-term budgetary deficits the U.S. government faces,... then there could be a political opening for new energy taxes, even a carbon tax. ...
Those who recall the 1993 failure of the Clinton administration’s BTU-tax proposal – with a less polarized and more cooperative Congress than today’s – will not be optimistic. ... The key group to bring on board will presumably be conservative Republicans, and it is difficult to picture them being more willing to break their Grover Norquist pledges because it’s for a carbon tax.

Here's the surprising part (to me anyway), some optimism after all:

What remains most likely to happen is what I’ve been saying for several years, namely that despite the apparent inaction by the Federal government, the official U.S. international commitment — a 17 percent reduction of CO2 emissions below 2005 levels by the year 2020 – is nevertheless likely to be achieved!  The reason is the combination of CO2 regulations which are now in place because of the Supreme Court decision [freeing the EPA to treat CO2 like other pollutants under the Clean Air Act], together with five other regulations or rules on SOX [sulfur compounds], NOX [nitrogen compounds], coal fly ash, particulates, and cooling water withdrawals. All of these will have profound effects on retirement of existing coal-fired electrical generation capacity, investment in new coal, and dispatch of such electricity.
Combined with that is Assembly Bill 32 (AB 32) in the state of California, which includes a CO2 cap-and-trade system that is more ambitious in percentage terms than Waxman-Markey was in the U.S. Congress, and which became binding on January 1, 2013. ...  In other words, there will be actions having significant implications for climate, but most will not be called “climate policy,” and all will be within the regulatory and executive order domain, not new legislation. ...

Tuesday, January 22, 2013

Time Is Not On Our Side

What if we actually achieve the target of limiting global warming to a 2 degree Celsius increase? We are unlikely to meet this goal -- it's looking much worse than that -- but what if we did?:

 ... It is abundantly clear that the target of a 2-degree Celsius limit to climate change was mostly derived from what seemed convenient and doable without any reference to what it really means environmentally. Two degrees is actually too much for ecosystems. Tropical coral reefs are extremely vulnerable to even brief periods of warming. .. A 2-degree world will be one without coral reefs (on which millions of human beings depend for their well-being)..., there undoubtedly will be massive extinctions and widespread ecosystem collapse. The difficulty of trying to buffer and manage change will increase exponentially with only small increments of warming.
In addition, the last time the planet was 2 degrees warmer, the oceans were four to six (perhaps eight) meters higher. We may not know how fast that will happen (although it is already occurring more rapidly than initially estimated), but the end point in sea-level rise is not in question. A major portion of humanity lives in coastal areas and small island states that will go under water. ...
More than a 2-degree increase should be unimaginable. Yet to stop at 2 degrees, global emissions have to peak in 2016. ...
Environmental change is happening rapidly and exponentially. We are out of time.

Of course, global emissions won't be anywhere near a peak in 2016.

Wednesday, January 16, 2013

'The Right’s Resistance to Regulation'

Peter Dizikes of MIT News:
The right’s resistance to regulation, by Peter Dizikes, MIT News Office: James Watt, who served as Secretary of the Interior from 1981 to 1983, is remembered primarily for a short, business-friendly tenure that ended with his resignation soon after an ill-judged remark about women, minorities and the disabled. And yet, as MIT professor Judith Layzer observes in her new book about environmental politics, “Open for Business,” there is good reason to regard Watt’s impact differently.

For one thing, Watt, among others on the political right, managed to cut government funding for conservation efforts. For another, he installed staff members who emphasized the development of natural resources, rather than just the protection of land. In so doing, Watt was one of many Republicans who instituted fundamental changes in U.S. environmental policy.

“I will build an institutional memory that will be here for decades,” Watt once said of his department, as Layzer recounts.

These kinds of under-the-radar changes, Layzer argues, are one of two ways conservatives have dramatically altered environmental politics since the 1970s, when environmentalists probably reached the high point of their political influence.

The other, says Layzer, an associate professor of environmental policy at MIT, is ideological and rhetorical: Conservatives have gained enormous traction by touting “the virtues of the market system and the horrors of regulation,” thus limiting public backing for stricter government-imposed controls on natural resources. By arguing that the market economy, when left alone, is effectively self-policing and morally sound, conservatives have put environmentalists on the defensive, making them tentative about arguing for environmental protections as a good in themselves. So whereas President Richard Nixon once green-lighted the Environmental Protection Agency, today’s political debates often touch on the necessity of opening further federal lands for oil exploration.

“The set of conservative ideas has really pushed the framing of issues to the point where many people today aren’t even aware of the [older] alternatives,” Layzer says. “Only if you’d been involved or lived through this history would you know it hasn’t always been thus.” ...[continue]...

The one thing I'll note is that "free market rhetoric," which is said to have played a key role in winning (or at least shifting) the battle of ideas, was the vehicle for defending other interests, e.g. business interests in having as few environmental regulations as possible. It (free markets) was not the goal in and of itself.

As to what should be done, for this reason I'm not so sure that “It really was about ideas." And you have to fight ideas with ideas.” It was also about having the political power to make the ideas heard, and to turn them into actual legislation that served the interests of the of those supporting the politicians financially. So I'd say, "It was really about using ideas to serve the interests of those who held the reins of power." Or something like that.

Tuesday, January 15, 2013

'Egregious in its Misuse of Data'

Jeff Sachs is unhappy with the WSJ's editorial page (and not for the first time):

Wall Street Journal: Get a Fact Checker, by Jeffrey Sachs: ...I ... want to talk about fact checking. The [Wall Street] Journal editorial board is egregious in its misuse of data. It writes what it wants without fact checking. Where is the journalistic profession to call them out?
There are two editorial pieces this weekend of note. The story on "Europe's Bankrupt Welfare State" asserts that, "the European way of welfare is bankrupt." This is easy to check. Look at European countries with large welfare states, and see how they are doing in terms of debt, deficits, unemployment, and other indicators of "bankruptcy." I do this in Table 1 here comparing the US with Europe's five leading welfare states: the Netherlands, Denmark, Norway, Sweden, and Germany. ...
Looking at Table 1..., the conclusion is simple. The European welfare states tax and spend more than the US as a percent of GDP, yet also have lower budget deficits as a share of GDP, lower debt-GDP ratios, and lower unemployment rates. Note that the government sectors of Norway and Sweden have net assets rather than net debt. Some bankruptcy!
The second comment is by editorial board member Holman Jenkins, Jr. Mr. Jenkins tries to debunk global warming by writing that "the warmest year on record globally is still 1998 and no trend has been apparent globally since then."
His claim is both false and irrelevant. It is false because most data point to more recent years as being warmer than 1998. ... The claim is also irrelevant, since 1998 was an exceptionally strong El Nino (essentially, a tilt of Pacific warm water towards the west coast of Latin America). ... Comparing subsequent years to a very strong El Nino year mixes up trends and inter-annual variability. ...
The Wall Street Journal editors have failed to notice that even the climate skeptics have come around. ...
The Wall Street Journal editorial board needs a fact checker plain and simple. It's a major paper, with excellent news coverage, and should not destroy its integrity by an editorial board that flouts the basic process of checking the facts.

Monday, December 24, 2012

Real Tree or Artificial Tree?

A bit late for most of you, but in case it comes up over the next few days:

Real Tree or Artificial Tree, by Tim Taylor: My family always had real Christmas trees when I was growing up. I've always had real trees as an adult. Living in my own little bubble, it thus came as a shock to me to learn that, of the households that have Christmas trees, over 80% use an artificial tree, according to Nielsen survey results commissioned by the American Christmas Tree Association  (which largely represents sellers of artificial trees). But in a holiday season where the focus is often on whether we are naughty or nice, what choice of tree has greater environmental impact? ...

Wednesday, December 12, 2012

Just Sayin': It May Already Be Too Late

Tim Haab:

Just sayin': I was thinking of writing a lengthy post about climate change denial being completely unscientific nonsense, but then geochemist and National Science Board member James Lawrence Powell wrote a post that is basically a slam-dunk of debunking. His premise was simple: If global warming isn’t real and there’s an actual scientific debate about it, that should be reflected in the scientific journals.
He looked up how many peer-reviewed scientific papers were published in professional journals about global warming, and compared the ones supporting the idea that we’re heating up compared to those that don’t. What did he find? This:

Powell-Science-Pie-Chart[1]The thin red wedge.   Image credit: James Lawrence Powell

Maximillian Auffhammer at the Berkeley blog:

Doha schmoha: On Saturday (Dec. 8) another wildly unsuccessful round of climate negotiations, in Doha, Qatar, concluded with applying a band aid to solve the rapidly accelerating climate problem. The 1997 Kyoto accord was extended to 2020. If you think this is a good thing, you are severely mistaken. China, the US and the other usual suspects made no significant concessions. Further,  the climate leader — the EU — is internally in disagreement over what reductions should be agreed to. ...
While academics have proposed a number of interesting avenues for further studies of so called architectures for future agreements, time is slowly running out. It is simply too difficult to get 200+ countries to agree and then stick to a binding agreement. So what to do?
I think a simple handshake between the U.S. and China would be a good start. Each agrees to a carbon tax which is collected fairly far upstream. Any country wanting to sell its goods into the U.S. or Chinese markets could either pay a carbon tariff at the border or start charging its own equivalent carbon tax and be exempt from the tariff.
Is this going to happen? Maybe not...
But one thing is for sure: We are becoming richer as a species and we will want to consume more energy services. Unless we start pricing carbon, that energy will largely come from coal. And if that happens, limiting warming to 2 degrees is a pipe dream. In fact, it may already be too late.

Thursday, December 06, 2012

'Climate Science Predictions Prove Too Conservative'

Don't say you weren't warned about the risks of climate change, though you might be able to say you weren't adequately warned:

Climate Science Predictions Prove Too Conservative, by Glenn Scherer and DailyClimate.org: Across two decades and thousands of pages of reports, the world's most authoritative voice on climate science has consistently understated the rate and intensity of climate change and the danger those impacts represent, say a growing number of studies on the topic. 
This conservative bias, say some scientists, could have significant political implications, as reports from the group – the U.N. Intergovernmental Panel on Climate Change – influence policy and planning decisions worldwide, from national governments down to local town councils.
As the latest round of United Nations climate talks in Doha wrap up this week, climate experts warn that the IPCC's failure to adequately project the threats that rising global carbon emissions represent has serious consequences: The IPCC’s overly conservative reading of the science, they say, means governments and the public could be blindsided by the rapid onset of the flooding, extreme storms, drought, and other impacts associated with catastrophic global warming. ...

Wednesday, December 05, 2012

A Counter Example to the 'Tragedy of the Commons'

Running late -- have a dissertation proposal defense to get to, then a final to give to my Ph.D. students -- so a quick one:

A Counter Example to the "Tragedy of the Commons", by Matthew Kahn: ...This OP-ED by Andrew Kahrl is actually quite interesting. ... For at least 20 years, I have lectured on the "tragedy of the commons" that takes place both in cities and in the oceans. Consider a smoker in a city...[numerical example]. This is a simple example of the tragedy of the commons --- this smoker unintentionally degraded the commons as he pursued his privately optimal action. The same logic applies to over-fishing in common oceans. One "solution" to this property rights issue is to privatize the commons and the owner would charge a price to allow the smoker to smoke and the smoker would only smoke if he is willing to pay this fee.

We can now evaluate Professor Kahrl's claims. He argues that the privatization of beaches in the Northeast is the reason that Hurricane Sandy caused so much damage.

He writes; "By increasing the value of shoreline property and encouraging rampant development, the trend toward privatizing formerly public space has contributed in no small measure to the damage storms like Hurricane Sandy inflict. Tidal lands that soaked up floodwaters were drained and developed. Jetties, bulkheads and sea walls were erected, hastening erosion. And sand dunes — which block rising waters but also profitable ocean views — were bulldozed." ...
Kahrl is saying that capitalism and the pursuit of aesthetic beauty nudged us to drop our guard and destroy Mother Nature's coastal defense system. .... For this claim to be true, he must assume that the tragedy of the commons would not have degraded such natural capital. This may be true.

Mother Nature is now engaging in a takings as she tries to seize coastal property from incumbent owners. I say let her win. These place based stakeholders want to use your tax dollars as funds to build a wall around them. A compromise would be for the state government to buy these properties and knock them down and revitalize the natural capital adaptation strategies that the author lists. ...

Monday, November 26, 2012

'Wreaking Havoc on the Environment with Little or No Accountability'

Jeff Sachs says "polluters must pay":

Polluters Must Pay: When BP and its drilling partners caused the Deepwater Horizon oil spill in the Gulf of Mexico in 2010, the United States government demanded that BP finance the cleanup, compensate those who suffered damages, and pay criminal penalties for the violations that led to the disaster. BP has already committed more than $20 billion in remediation and penalties. Based on a settlement last week, BP will now pay the largest criminal penalty in US history – $4.5 billion.
The same standards for environmental cleanup need to be applied to global companies operating in poorer countries, where their power has typically been so great relative to that of governments that many act with impunity, wreaking havoc on the environment with little or no accountability. As we enter a new era of sustainable development, impunity must turn to responsibility. Polluters must pay, whether in rich or poor countries. Major companies need to accept responsibility for their actions. ...
I can't see the companies doing this voluntarily.

Wednesday, October 31, 2012

Climate Change and Hurricane Sandy

Is there a link between climate change and hurricane Sandy?:

Did Climate Change Cause Hurricane Sandy?, by Mark Fischetti, Scientific American: If you’ve followed the U.S. news and weather in the past 24 hours you have no doubt run across a journalist or blogger explaining why it’s difficult to say that climate change could be causing big storms like Sandy. Well, no doubt here: it is.
The hedge expressed by journalists is that many variables go into creating a big storm, so the size of Hurricane Sandy, or any specific storm, cannot be attributed to climate change. That’s true, and it’s based on good science. However, that statement does not mean that we cannot say that climate change is making storms bigger. It is doing just that—a statement also based on good science, and one that the insurance industry is embracing, by the way. (Huh? More on that in a moment.)
Scientists have long taken a similarly cautious stance, but more are starting to drop the caveat and link climate change directly to intense storms and other extreme weather events, such as the warm 2012 winter in the eastern U.S. and the frigid one in Europe at the same time. They are emboldened because researchers have gotten very good in the past decade at determining what affects the variables that create big storms. Hurricane Sandy got large because it wandered north along the U.S. coast, where ocean water is still warm this time of year, pumping energy into the swirling system. But it got even larger when a cold Jet Stream made a sharp dip southward from Canada down into the eastern U.S. The cold air, positioned against warm Atlantic air, added energy to the atmosphere and therefore to Sandy, just as it moved into that region, expanding the storm even further.
Here’s where climate change comes in. ... [more] ...

Saturday, October 27, 2012

Climate Change and 'Free Drivers'

Gernot Wagner and Martin Weitzman on the "allure of geoengineering" as a solution to global warming, and the temptation for individual countries to act on their own:

Playing God: ... All it takes is a single actor willing to focus on the purported benefits to his country or her region to pull the geoengineering trigger. The task with geoengineering is to coordinate international inaction while the international community considers what steps should be taken. The fate of the planet cannot be left in the hands of one leader, one nation, one billionaire.
Fortunately, we are still many years off from the full "free driver" effect taking hold. There's some time to engage in a serious global governance debate and careful research: building coalitions, guiding countries and perhaps even individuals lest they take global matters into their own hands. In fact, that is where the discussion stands at the moment, with a governance initiative convened by the British Royal Society, the Academy of Sciences for the Developing World, and the Environmental Defense Fund, among other deliberations guiding how geoengineering research should be pursued.
With time come the "free drivers"
The clock, however, is ticking. A single dramatic climate-related event anywhere in the world - think Hurricane Katrina on steroids - could trigger the "free driver" effect. That event need not be global and it need not even be conclusively linked to global warming. A nervous leader of a frightened nation might well race past the point of debate to deployment. The "free driver" effect will all but guarantee that we will face this choice at some point.
"Free riding" and "free driving" occupy opposite poles of the spectrum of climate action: One ensures that individuals won't supply enough of a public good. The other creates an incentive to engage in potentially reckless geoengineering and supply a global bad. It's tough to say which one is more dangerous. Together, these powerful forces could push the globe to the brink.

Sunday, October 21, 2012

Stavins: Cap-and-Trade, Carbon Taxes, and My Neighbor’s Lovely Lawn

Speaking of externalities associated with energy use, Robert Stavins throws cold water on "current enthusiasm about carbon taxes in the academic and broader policy-wonk community":

Cap-and-Trade, Carbon Taxes, and My Neighbor’s Lovely Lawn, by Robert Stavins: ...my conclusion in 1998 strongly favored a market-based carbon policy, but was somewhat neutral between carbon taxes and cap-and-trade. Indeed, at that time and for the subsequent eight years or so, I remained agnostic regarding what I viewed as the trade-offs between cap-and-trade and carbon taxes. What happened to change that? Three words: The Hamilton Project.
...In 2007, the Project’s leadership asked me to write a paper proposing a U.S. CO2 cap-and-trade system. ... The Hamilton Project leaders said ... they wanted me to make the best case I could for cap-and-trade, not a balanced investigation of the two policy instruments. Someone else would be commissioned to write a proposal for a carbon tax. (That turned out to be Professor Gilbert Metcalf of Tufts University ... who did a splendid job!) Thus, I was made into an advocate for cap-and-trade. It’s as simple as that. ...
In principle, both carbon taxes and cap-and-trade can achieve cost-effective reductions, and – depending upon design — the distributional consequences of the two approaches can be the same. But the key difference is that political pressures on a carbon tax system will most likely lead to exemptions of sectors and firms, which reduces environmental effectiveness and drives up costs, as some low-cost emission reduction opportunities are left off the table. But political pressures on a cap-and-trade system lead to different allocations of the free allowances, which affect distribution, but not environmental effectiveness, and not cost-effectiveness.
I concluded that proponents of carbon taxes worried about the propensity of political processes under a cap-and-trade system to compensate sectors through free allowance allocations, but a carbon tax would be sensitive to the same political pressures, and should be expected to succumb in ways that are ultimately more harmful: reducing environmental achievement and driving up costs.
Of course, such positive political economy arguments look much less compelling in the wake of the defeat of cap-and-trade legislation in the U.S. Congress and its successful demonization by conservatives as “cap-and-tax.”
A Political Opening for Carbon Taxes?
Does the defeat of cap-and-trade in the U.S. Congress, the obvious unwillingness of the Obama White House to utter the phrase in public, and the outspoken opposition to cap-and-trade by Republican Presidential candidate Mitt Romney indicate that there is a new opening for serious consideration of a carbon-tax approach to meaningful CO2 emissions reductions?

First of all, there surely is such an opening in the policy wonk world. Economists and others in academia, including important Republican economists such as Harvard’s Greg Mankiw and Columbia’s Glenn Hubbard, remain enthusiastic supporters of a national carbon tax. And a much-publicized meeting in July at the American Enterprise Institute in Washington, D.C. brought together a broad spectrum of Washington groups – ranging from Public Citizen to the R Street Institute – to talk about alternative paths forward for national climate policy. Reportedly, much of the discussion focused on carbon taxes.

Clearly, this “opening” is being embraced with enthusiasm in the policy wonk world. But what about in the real political world? The good news is that a carbon tax is not “cap-and-trade.” ... But if conservatives were able to tarnish cap-and-trade as “cap-and-tax,” it surely will be considerably easier to label a tax – as a tax! Also, note that Romney’s stated opposition and Obama’s silence extend beyond disdain for cap-and-trade per se. Rather, they cover all carbon-pricing regimes.
So as a possible new front in the climate policy wars, I remain very skeptical that an explicit carbon tax proposal will gain favor in Washington, no matter what the outcome of the election. ...
I would personally be delighted if a carbon tax were politically feasible in the United States, or were to become politically feasible in the future. But I’m forced to conclude that much of the current enthusiasm about carbon taxes in the academic and broader policy-wonk community in the wake of the defeat of cap-and-trade is – for the time being, at least – largely a manifestation of the grass looking greener across the street.

Wednesday, October 10, 2012

Why Aren't Politicians Talking about Climate Change?

As I'm waiting to board a plane, this surprised me -- promising to address climate change is a vote getter?:

Why Aren't Politicians Listening to Joe Romm About Climate Change?, by Chris Mooney, The Atlantic: He's been called "America's fiercest climate blogger." ... Romm has called Obama's failure to speak out about global warming, loudly and often, his "biggest communications mistake."
Now, a raft of new polls are showing that this issue has the potential to move independent and swing voters... So we stopped to chat with Romm ... about his unusual take on this subject. ...
Do you think this has always been true -- that climate change has always been a potential political winner -- or has it become more true over time?...
There's no question that the Obama team has gotten a misimpression that this is not a winning issue. And that I think is based on some rather questionable analysis done years ago, that basically said, "if you only present the doom and gloom case, you turn some people off." But nobody really does that -- nobody I know does that. ...
The polling data seems clear: This is a classic wedge issue that separates conservatives not just from progressives, but also from moderates and independents. So you know, we can spend a lot of time being puzzled about why this administration does bizarre messaging. If you talk to communications experts, many will say this administration is not great at it. You can get upset about President Obama not bringing up climate change, but this is not an administration that's good at communicating -- and this is just one of the many areas that they mistakenly downplay. ...

 

Friday, September 21, 2012

'Primetime Fox News And WSJ Editorial Climate Coverage Mostly Wrong'

Climate scientists document News Corporation's distortions on climate change:

Brenda Ekwurzel is a climate scientist with the Union of Concerned Scientists. She announced in New York City on September 21st the results of an analysis of climate change coverage at two major properties of the News Corporation, the Fox News Channel and the Wall Street Journal.
“What we found in our analysis was that a staggering 93 percent of all occurrences in the last six months in the prime time news of Fox News were misleading occurrences of climate science. Okay, for the Wall Street Journal opinion section in the last year, we found a surprising 81 percent of the occurrences were misleading. And of the accurate ones, these were all letters to the editor that were submitted in response to misrepresentations in editorials or other letters. So, a broad swath of News Corporation viewers and readership are being misled about the science.”

Tuesday, September 11, 2012

Wind Power

Is wind power the answer?:

Wind could meet many times world's total power demand by 2030, researchers say, EurekAlert: In a new study, researchers at Stanford University's School of Engineering and the University of Delaware developed the most sophisticated weather model available to show that not only is there plenty of wind over land and near to shore to provide half the world's power, but there is enough to exceed total demand by several times if need be...
The new paper contradicts two earlier studies that said wind potential falls far short of the aggressive goal because each turbine steals too much wind energy from other turbines, and that turbines introduce harmful climate consequences that would negate some of the positive aspects of renewable wind energy. ...
Among the most promising things the researchers learned is that there is a lot of potential in the wind — hundreds of terawatts. At some point, however, the return on building new turbines plateaus, reaching a level in which no additional energy can be extracted even with the installation of more turbines.
"Each turbine reduces the amount of energy available for others," Archer said. The reduction, however, becomes significant only when large numbers of turbines are installed, many more than would ever be needed.
"And that's the point that was very important for us to find," Archer said. ...
"We're not saying, 'Put turbines everywhere,' but we have shown that there is no fundamental barrier to obtaining half or even several times the world's all-purpose power from wind by 2030. The potential is there, if we can build enough turbines," said Jacobson.
Knowing that the potential exists, the researchers turned their attention to how many turbines would be needed to meet half the world's power demand — about 5.75 terawatts — in a 2030 clean-energy economy. ...
Archer and Jacobson showed that four million, five-megawatt turbines operating at a height of 100 meters could supply as much 7.5 terawatts of power — well more than half the world's all-purpose power demand — without significant negative affect on the climate.  ...
In terms of surface area, Jacobson and Archer would site half the four million turbines over water. The remaining two million would require a little more than one-half of one percent of the Earth's land surface — about half the area of the State of Alaska. However, virtually none of this area would be used solely for wind, but could serve dual purposes as open space, farmland, ranchland, or wildlife preserve.
Rather than put all the turbines in a single location, Archer and Jacobson say it is best and most efficient to spread out wind farms in high-wind sites across the globe — the Gobi Desert, the American plains and the Sahara for example.
"The careful siting of wind farms will minimize costs and the overall impacts of a global wind infrastructure on the environment," said Jacobson. "But, as these results suggest, the saturation of wind power availability will not limit a clean-energy economy."

[Brad Plumer has more.]

Saturday, August 25, 2012

'Global Warming Has a Fairly Simple and Cheap Technical Solution'

Robert Frank:

Carbon Tax Silence, Overtaken by Events, by Robert Frank, Commentary, NY Times: ...Mitt Romney ... has been equivocal about whether rising temperatures are caused by human action. But he has been adamant that uncertainty about climate change rules out policy intervention. ...
Climatologists are the first to acknowledge that theirs is a highly uncertain science. The future might be better than they think. Then again, it might be much worse. Given that risk, policy makers must weigh the potential cost of action against the potential cost of inaction. And even a cursory look at the numbers makes a compelling case for action. ...
The good news is that we could insulate ourselves from catastrophic risk at relatively modest cost by enacting a steep carbon tax. ... A carbon tax would also serve two other goals. First, it would help balance future budgets. ... If new taxes are unavoidable, why not adopt ones that ... make the economy more efficient? By reducing harmful emissions, a carbon tax fits that description.
A second benefit would occur if a carbon tax were ... phased in gradually, only after the economy had returned to full employment. High unemployment persists in part because businesses, sitting on mountains of cash, aren’t investing it... News that a carbon tax was coming would create a stampede to develop energy-saving technologies. ...
Some people argue that a carbon tax would do little good unless it were also adopted by China and other big polluters. It’s a fair point. But access to the American market is a potent bargaining chip. The United States could ... tax imported goods in proportion to their carbon dioxide emissions if exporting countries failed to enact carbon taxes at home.
In short, global warming has a fairly simple and cheap technical solution. ...
Update: I didn't do a very good job of highlighting Robert Frank's point that we shouldn't "expect to hear much about climate change at the Republican and Democratic conventions," but "Many climate scientists ... are now pointing to evidence linking rising global temperatures to the extreme weather we’re seeing around the planet." Thus, "Extreme weather is already creating enormous human suffering, and "If the recent meteorological chaos drives home the threat of climate change and prompts action, it may ultimately be a blessing in disguise."

Friday, August 10, 2012

Our Not So Fishy Future

North American freshwater fish diversity is in decline:

North American freshwater fishes race to extinction, EurekAlert: North American freshwater fishes are going extinct at an alarming rate compared with other species, according to an article in the September issue of BioScience. The rate of extinctions increased noticeably after 1950, although it has leveled off in the past decade. The number of extinct species has grown by 25 percent since 1989.
The article, by Noel M. Burkhead of the US Geological Survey, examines North American freshwater fish extinctions from the end of the 19th Century to 2010, when there were 1213 species in the continent, or about 9 percent of the Earth's freshwater fish diversity. At least 57 North American species and subspecies, and 3 unique populations, have gone extinct since 1898, about 3.2 percent of the total. Freshwater species generally are known to suffer higher rates of extinction than terrestrial vertebrates. ...  Burkhead concludes that between 53 and 86 species of North American freshwater fishes are likely to have gone extinct by 2050, and that the rate of extinction is now at least 877 times the background extinction rate over geological time.

Monday, July 23, 2012

'U.S. Ethanol Policies Set to Reach Their Illogical Conclusion'

Why is the US selling Brazil two million gallons of ethanol at the same time it is importing more ethanol than that from Brazil?:

Running on Empty: U.S. ethanol policies set to reach their illogical conclusion, by Timothy Wise: I’m as cynical as the next policy wonk, but sometimes even I am surprised at the perverse outcomes of some of those policies. Take the bizarre scenario outlined in the new agricultural outlook report from the FAO and the OECD regarding the projected rise in ethanol trade – ethanol traded for ethanol – between the United States and Brazil. That’s right, 6.3 billion gallons a year sloshing between the world’s pre-eminent ethanol producers by 2021. And all in the name of the environment, without a single drop helping people or the planet.
Why would the United States, which now devotes 40% of its corn crop to the production of ethanol, import more than 4 billion gallons of ethanol from Brazil? And why would Brazil at the same time import a projected 2 billion gallons from the U.S.? Couldn’t we just save all those transactions costs and shipping-related greenhouse gas emissions by keeping our ethanol and cutting our projected ethanol imports from Brazil in half?
Not if your goal is to game the U.S. biofuel mandate.
The U.S. Renewable Fuel Standard, passed in 2007 and known as RFS2, includes a mandate for 36 billion gallons of renewable fuel use by 2022, with a nested set of mandates for different types of biofuels. Conventional or first-generation biofuels, such as ethanol from corn, have limited environmental benefits, with supposed reductions in greenhouse gas (GHG) emissions of about 20%. Congress wisely set the mandate such that the majority of the 36 billion-gallon mandate should be met by “advanced biofuels” with a GHG score of 50% or better in terms of reductions.
Well, advanced biofuel production in the United States isn’t going so well. ... At this point, all we produce is a whole lot of corn ethanol, and we are already nearing the technical limit of 15 billion gallons for non-advanced biofuels.
Fortunately for Brazilian ethanol producers..., the renewable fuel mandate can be met to a significant extent by the use of “other” advanced biofuels. Even though Congress was sold the RFS on the promise of energy independence, those “other biofuels” do not have to be produced in the United States. (In fact, mandating U.S. sourcing could have been subject to a WTO challenge.) Brazil’s sugarcane-based ethanol is considered advanced, with a GHG-reduction score of 50% despite widespread concerns about a range of other social and environmental impacts. ...
Under the FAO-OECD’s baseline scenario, Brazil would import 2 billion gallons of corn ethanol from the United States. Why, if it’s a major ethanol exporter and it produces more environmentally sustainable ethanol? To make up for the domestic shortfall created by its exports to the U.S., and to meet its own rising demand from its expanding fleet of flex-fuel cars. They’ll take our low-grade corn ethanol if they can get a higher price for their sugar-based equivalent.
Talk about perverse. It’s bad enough that we meet our environmental goals not through good old American know-how but by buying it from someone else. Then we turn around and sell them an environmentally inferior equivalent at a cheaper price.
In the process, another round in the food-fuel fight will be won by the fuels, with ethanol demand continuing to put upward pressure on corn prices globally. The FAO-OECD report contains strong warnings on biofuels’ impacts on food prices, and it went to press even before drought parched the U.S. corn belt. They projected stable or slightly declining prices in 2012 and forward. Instead, corn and soybean prices are hitting historic highs and the world is staring down the loaded barrels of the third major spike in commodities prices in the last five years.
Unfortunately, the powers that be seem to have learned nothing from the first two. They certainly haven’t learned that it’s still a bad idea to put food in our cars.
For more, see Wise’s coauthored report, “Resolving the Food Crisis,” and his report for ActionAid, “Biofueling Hunger.”

And beyond the "perverse" influence of the powers behind biofuels, Paul Krugman notes the corrupting influence of Big Oil and Big Coal:

VSPs of Energy: David Roberts has an interesting post about how the “experts” massively underestimated the potential for growth in renewable energy: wind and solar have grown enormously faster than the Very Serious People, energy sector, predicted circa 2000. He links this to the somewhat related tendency of the alleged experts to predict huge costs from efforts at energy conservation, huge costs that keep on not materializing.
Roberts suggests that it’s because conventionally-minded experts aren’t in touch with the potential of technologies that are (a) new and (b) distributed, representing choices by millions of players as opposed to a few big corporations.
Maybe. But I’d place more emphasis on a more cynical view: capture, both crude and subtle, by existing fossil-fuel interests (with nuclear power, another big business venture, somewhat similar).
It should be obvious that Big Oil and Big Coal have a stake in having the public believe that there is no alternative to ever more drilling, digging, and burning. And who employs, funds, and generally shapes the careers of mainstream energy “experts”? Who actually has a seat at the table when international organizations are putting together their scenarios?
It doesn’t have to be raw corruption, although there’s that too. It can instead be a matter of creating a mindset. And a lot of that mindset involves the sense that serious, hard-headed men think in terms of big extractive projects, that solar, wind, and conservation are hippie stuff — a sense that persists even in the teeth of contrary evidence.
The VSPs strike again.

Saturday, July 21, 2012

"An Important Property of Cap-and-Trade"

Another quick one while I wait for a connection at the SF airport --- Robert Stavins explains the independence property for cap-and-trade systems. This property "allows equity and efficiency concerns to be separated. In particular, a government can set an overall cap of pollutant emissions (a pollution reduction goal) and leave it up to a legislature to construct a constituency in support of the program by allocating shares of the allowances to various interests, such as sectors and geographic regions, without affecting either the environmental performance of the system or its aggregate social costs":

Two Notable Events Prompt Examination of an Important Property of Cap-and-Trade, by Robert Stavins: ...In our just-published article, “The Effect of Allowance Allocations on Cap-and-Trade System Performance,” [Robert] Hahn and I ... focused on an idea that is closely related to the Coase theorem, namely, that the market equilibrium in a cap-and-trade system will be cost-effective and independent of the initial allocation of tradable rights (typically referred to as permits or allowances). That is, the overall cost of achieving a given emission reduction will be minimized, and the final allocation of permits will be independent of the initial allocation, under certain conditions (conditional upon the permits being allocated freely, i.e., not auctioned). We call this the independence property. It is closely related to a core principle of general equilibrium theory (Arrow and Debreu 1954), namely, that when markets are complete, outcomes remain efficient even after lump-sum transfers among agents.
The Practical Political Importance of the Independence Property
We were interested in the independence property because of its great political importance.  The reason why this property is of such great relevance to the practical development of public policy is that it allows equity and efficiency concerns to be separated. In particular, a government can set an overall cap of pollutant emissions (a pollution reduction goal) and leave it up to a legislature to construct a constituency in support of the program by allocating shares of the allowances to various interests, such as sectors and geographic regions, without affecting either the environmental performance of the system or its aggregate social costs.  Indeed, this property is a key reason why cap-and-trade systems have been employed and have evolved as the preferred instrument in a variety of environmental policy settings.
In Theory, Does the Property Always Hold?
Because of the importance of this property, we examined the conditions under which it is more or less likely to hold — both in theory and in practice.  In short, we found that in theory, a number of factors can lead to the independence property being violated. These are particular types of transaction costs in cap-and-trade markets; significant market power in the allowance market; uncertainty regarding the future price of allowances; conditional allowance allocations, such as output-based updating-allocation mechanisms; non-cost-minimizing behavior by firms; and specific kinds of regulatory treatment of participants in a cap-and-trade market.
In Reality, Has the Property Held?
Of course, the fact that these factors can lead to the violation of the independence property does not mean that in practice they do so in quantitatively significant ways.  Therefore, Hahn and I also carried out an empirical assessment of the independence property in past and current cap-and-trade systems: lead trading; chlorofluorocarbons (CFCs) under the Montreal Protocol; the sulfur dioxide (SO2) allowance trading program; the Regional Clean Air Incentives Market (RECLAIM) in Southern California; eastern nitrogen oxides (NOX) markets; the European Union Emission Trading Scheme (EU ETS); and Article 17 of the Kyoto Protocol.
I encourage you to read our article, but, a quick summary of our assessment is that we found modest support for the independence property in the seven cases we examined (but also recognized that it would surely be useful to have more empirical research in this realm).
Politicians Have Had it Right
That the independence property appears to be broadly validated provides support for the efficacy of past political judgments regarding constituency building through legislatures’ allowance allocations in cap-and-trade systems. Governments have repeatedly set the overall emissions cap and then left it up to the political process to allocate the available number of allowances among sources to build support for an initiative without reducing the system’s environmental performance or driving up its cost.
This success with environmental cap-and-trade systems should be contrasted with many other public policy proposals for which the normal course of events is that the political bargaining that is necessary to develop support reduces the effectiveness of the policy or drives up its overall cost.  So, the independence property of well-designed and implemented cap-and-trade systems is hardly something to be taken for granted.  It is of real political importance and remarkable social value.

"A Couple of Points about Climate Change"

About to travel home and only have time for quick posts (I've been gone for over four weeks, except for four days in between trips, and am anxious to get there):

Dicing With The Climate, by Paul Krugman: Via Michael Roberts, a new paper (pdf) by James Hansen and associates that helps clear up a couple of points about climate change.
The first is the relationship between extreme weather events and climate change. The normal, cautious thing is to say that there’s no way to attribute any particular event, like a heat wave in the Ukraine, to global warming — and news media have basically been bullied by this argument into rarely mentioning climate change even when reporting on extreme weather. But Hansen et al make an important point: this argument is much weaker when we’re talking about really extreme events, like temperatures more than 3 standard deviations above historical norms. Such events would almost never happen if there weren’t a rising trend in global temperatures; so when they become quite common, as they have, it’s fair to call them evidence of warming.
The second point is how we know that climate change is a bad thing — a question I sometimes get asked. The questioners wonder why the fact that, say, more of Canada becomes agriculturally viable doesn’t offset the damage in places that get too hot.
My first-pass answer is that we have a global economy that is adapted to historically normal climate — not just in terms of what is grown where, but in terms of where we locate our cities. In the long run, after a couple of centuries’ worth of urban development and infrastructure has been drowned by rising sea levels and/or made useless because previously habitable regions need to be abandoned, we might be able to reconstruct an equally productive economy; but in the long run …
But Hansen et al make a stronger point: life as we know it evolved to fit the historical range of planetary temperatures. In the long run it might be able to adapt to a changed world — but now we’re talking millions of years.
In the long run, we are all extinct.

See also: The Climate Change Tipping Point.

Monday, July 02, 2012

Climate Change Skepticism

Here's the climate change skepticism talk that had me Tweeting so furiously (abstract here):

Ivar Giaever: The Strange Case of “Global Warming”

Here's the prebuttal (the talk before this one). Near the end, Mario Molina is very direct about the next speaker -- he makes it clear that he thinks the arguments are nonsense and coming from a non-expert, the word "ashamed" is used, and so on:

Mario J. Molina: The Science and Policy of Climate Change

See also:

Photosynthesis, Biomass, Biofuels: Conversion Efficiencies and Consequences, by Hartmut Michel (he ends up recommending photovoltaic cells and batteries to power cars rather than biogas or biofuels which are much less efficient)

and:

Atmospheric Chemistry and Climate in the Anthropocene, by Paul J. Crutzen

(the last talk is a bit dry).

It's interesting to see Nobel Prize winners in physics accusing each other of engaging in religion/politics rather than science, etc., etc.  It all sounds quite familiar.

[Update: More discussion of today's session here.]

Sunday, July 01, 2012

The Strange Case of 'Global Warming'???

Oh my -- am I reading this correctly? This is an abstract from one of the talks tomorrow (and I hope the science is more accurate than the date given for the talk, it should be July 2, not July 3):

The Strange Case of "Global Warming", by Ivar Giaever: Lecture: Monday, 3 July, 12.00 hrs
In 2008 I participated on a panel at the Lindau meeting discussing "Global Warming" and to prepare, I looked into the subject using the internet. I found that the general belief is that the average surface temperature over the whole earth for a whole year has increased from ~288 oK to 288.8 oK in roughly 150 years, i.e. 0.3% and that it is due to increased CO2. If this is true, it means to me that the temperature has been amazingly stable.
In the same time period the number of people has increased in the world from 1.5 billions to over 7 billions. Is it possible that all the paved roads and cut down forests have had an effect on the climate?
The American Physical Society think differently, however, as its public position is:
Emissions of greenhouse gases from human activities are changing the atmosphere in ways that affect the Earth’s climate. Greenhouse gases include carbon dioxide as well as methane, nitrous oxide and other gases. They are emitted from fossil fuel combustion and a range of industrial and agricultural processes.
The evidence is incontrovertible: Global warming is occurring. If no mitigating actions are taken, significant disruptions in the Earth’s physical and ecological systems, social systems, security and human health are likely to occur. We must reduce emissions of greenhouse gases beginning now.
I believe that nothing in science is "incontrovertible" thus, in my view, APS has become a political (or religious?) society. Consequently, I resigned from APS in the fall of 2011.
In this talk I will explain why I became concerned about the climate, and terrified by the one sided propaganda in the media, In particular I am worried about all the money wasted on alternate energies, when so many children in the world go hungry to bed.
If you still believe that global warming is occurring and that the main cause is CO2 when I have finished this talk, I urge you to argue for two things to save the world:
1. Introduction of nuclear power
2. Limit the population increase by allowing only one child/woman

Surprise! Fox News highlighted this.

This lecture is just before the one above:

The Science and Policy of Climate Change, by Mario J. Molina: Lecture: Monday, 3 July, 11.30 hrs

Climate change is the most serious environmental challenge facing society in the 21st century. The basic science is clear: the International Panel on Climate Change concluded that there is more than 90% probability that human activities are causing the observed changes in the Earth’s climate in recent decades. The average temperature of the Earth’s surface has increased so far by about 0.8 degrees Celsius since the Industrial Revolution, and the frequency of extreme weather events such as droughts, floods and intense hurricanes is also increasing, most likely as a consequence of this temperature change. There are scientific uncertainties that remain to be worked out, connected with issues such as the feedback effects of clouds and aerosols. Nevertheless, the consensus among experts is that the risk of causing dangerous changes to the climate system increases rapidly if the average temperature rises more than two or three degrees Celsius. Society faces an enormous challenge to effectively reduce greenhouse gas emissions to avoid such dangerous interference with the climate system. This goal can only be achieved by taking simultaneously measures such as significantly increasing energy efficiency in the transportation, building, industrial and other sectors, using renewable energy sources such as solar, wind, geothermal and biomass, and possibly developing and using safer nuclear energy power plants.

These are Nobel Prize winners in physics. I thought physics and its adherence to the scientific method was supposed to be free of the kinds of controversy over models, politics, etc. that plagues economics.

Saturday, June 30, 2012

Have Blog, Will Travel

Short travel day by train. Next stop: Lindau, Germany for this year's Lindau Nobel Laureate Meeting dedicated to Physics.

Here's the program for the firsmorning:

09.00 Plenary Lecture Main Hall
Brian P. Schmidt: Observations, and the Standard Model of Cosmology
09.30 Plenary Lecture Main Hall
John C. Mather: Seeing Farther with New Telescopes
10.00 Plenary Lecture Main Hall
George F. Smoot: Mapping the Universe in Space and Time
11.00 Plenary Lecture Main Hall
Paul J. Crutzen: Atmospheric Chemistry and Climate in the Anthropocene
11.30
Plenary Lecture
Main Hall
Mario J. Molina
The Science and Policy of Climate Change
12.00 Plenary Lecture Main Hall
Ivar Giaever: The Strange Case of “Global Warming”
12.30 Plenary Lecture Main Hall
Hartmut Michel: Photosynthesis, Biomass, Biofuels: Conversion Efficiencies and Consequences

I'm particularly interested in the sessions on climate change.

 

Sunday, June 24, 2012

Elephant Underpass

Elephant populations are becoming increasingly fragmented:

Road to Recovery?, National Geographic: An African elephant approaches an underpass beneath the busy Nanyuki-Meru road in northern Kenya...

K2
Photograph courtesy Lewa Wildlife Conservancy

The first of its kind for elephants, the underpass will ideally provide a safe corridor for the large mammals to move throughout the Mount Kenya region (map), where highways, fences, and farmlands have split elephant populations, according to Geoffrey Chege, chief conservation officer of the Lewa Wildlife Conservancy, a Kenya-based nonprofit.
Without the underpass, animals that try to move between isolated areas often destroy fences and crops—leading to conflicts with people.
Since its completion in late 2010, the underpass has been a "tremendous success"—hundreds of elephants have been spotted walking through the corridor...

K1
Photograph courtesy Lewa Wildlife Conservancy

At first, only adult male elephants ventured through the underpass, and then only at night.
But before long whole family groups were passing through during the day...

K3
Image courtesy Lewa Wildlife Conservancy

Currently the region's elephant populations are divided into two isolated groups: 2,000 animals in Mount Kenya and 7,500 in the Samburu-Laikipia ecosystem, according to the Lewa Wildlife Conservancy.
The elephant underpass ... could improve the genetic health of northern Kenya elephants, since more genes will mix as the animals move into various territories and find new mates.
The corridor may also mean that elephants will move around more, reducing pressure on habitats—and possibly helping other species that use the same resources, such as the black rhinoceros, according to the conservancy. ...

Tuesday, May 29, 2012

Disbelief in Climate Science: Is It Stupidity?

Tim Haab:

Study rules out stupidity as a cause of disbelief in climate science*:

And the Yale research published today reveals that if Americans knew more basic science and were more proficient in technical reasoning it would still result in a gap between public and scientific consensus.

Indeed, as members of the public become more science literate and numerate, the study found, individuals belonging to opposing cultural groups become even more divided on the risks that climate change poses.

Funded by the National Science Foundation, the study was conducted by researchers associated with the Cultural Cognition Project at Yale Law School and involved a nationally representative sample of 1500 U.S. adults.

"The aim of the study was to test two hypotheses," said Dan Kahan, Elizabeth K. Dollard Professor of Law and Professor of Psychology at Yale Law School and a member of the study team. "The first attributes political controversy over climate change to the public's limited ability to comprehend science, and the second, to opposing sets of cultural values. The findings supported the second hypothesis and not the first," he said.

"Cultural cognition" is the term used to describe the process by which individuals' group values shape their perceptions of societal risks. It refers to the unconscious tendency of people to fit evidence of risk to positions that predominate in groups to which they belong.

The results of the study were consistent with previous studies that show that individuals with more egalitarian values disagree sharply with individuals who have more individualistic ones on the risks associated with nuclear power, gun possession, and the HPV vaccine for school girls.

via www.enn.com

*Unless you classify stubbornness as stupidity.

Saturday, May 26, 2012

Climate Change and Political Polarization

Robert Stavins has always seemed optimistic about the potential for action on climate change, but there seems to be a shift toward a more pessimistic posture. After making the case for a market-based regulatory approach (as opposed to, for example, mandates), which is worth reading too, he says:

Can Market Forces Really be Employed to Address Climate Change?, by Robert Stavins: ...The U.S. political response to possible market-based approaches to climate policy has been and will continue to be largely a function of issues and structural factors that transcend the scope of environmental and climate policy. Because a truly meaningful climate policy – whether market-based or conventional in design – will have significant impacts on economic activity in a wide variety of sectors and in every region of the country, it is not surprising that proposals for such policies bring forth significant opposition, particularly during difficult economic times.
In addition, U.S. political polarization – which began some four decades ago and accelerated during the economic downturn – has decimated what had long been the key political constituency in Congress for environmental (and energy) action: namely, the middle, including both moderate Republicans and moderate Democrats. Whereas congressional debates about environmental and energy policy have long featured regional politics, they are now largely partisan. In this political maelstrom, the failure of cap-and-trade climate policy in the Senate in 2010 was collateral damage in a much larger political war.
Better economic times may reduce the pace – if not the direction – of political polarization. And the ongoing challenge of large federal budgetary deficits may at some point increase the political feasibility of new sources of revenue. When and if this happens, consumption taxes – as opposed to traditional taxes on income and investment – could receive heightened attention; primary among these might be energy taxes, which, depending on their design, can function as significant climate policy instruments.
Many environmental advocates would respond that a mobilizing event will surely precipitate U.S. climate policy action.  But the nature of the climate change problem itself helps explain much of the relative apathy among the U.S. public and suggests that any such mobilizing events may come “too late.”
Nearly all our major environmental laws have been passed in the wake of highly publicized environmental events or “disasters,” including the spontaneous combustion of the Cuyahoga River in Cleveland, Ohio, in 1969, and the discovery of toxic substances at Love Canal in Niagara Falls, New York, in the mid-1970s. But note that the day after the Cuyahoga River caught on fire, no article in The Cleveland Plain Dealer commented that the cause was uncertain, that rivers periodically catch on fire from natural causes. On the contrary, it was immediately apparent that the cause was waste dumped into the river by adjacent industries. A direct consequence of the observed “disaster” was, of course, the Clean Water Act of 1972.
But climate change is distinctly different. Unlike the environmental threats addressed successfully in past U.S. legislation, climate change is essentially unobservable to the general population. We observe the weather, not the climate. Until there is an obvious and sudden event – such as a loss of part of the Antarctic ice sheet leading to a dramatic sea-level rise – it is unlikely that public opinion in the United States will provide the bottom-up demand for action that inspired previous congressional action on the environment over the past forty years.

But then some of the optimism returns:

Despite this rather bleak assessment of the politics of climate change policy in the United States, it is really much too soon to speculate on what the future will hold for the use of market-based policy instruments, whether for climate change or other environmental problems.
On the one hand, it is conceivable that two decades (1988–2008) of high receptivity in U.S. politics to cap-and-trade and offset mechanisms will turn out to be no more than a relatively brief departure from a long-term trend of reliance on conventional means of regulation.
On the other hand, it is also possible that the recent tarnishing of cap-and-trade in national political dialogue will itself turn out to be a temporary departure from a long-term trend of increasing reliance on market-based environmental policy instruments. Perhaps the ongoing interest in these policy mechanisms in California (Assembly Bill 32), the Northeast (Regional Greenhouse Gas Initiative), Europe, and other countries will eventually provide a bridge to a changed political climate in Washington.

To me, one of the most frustrating elements of this is so-called market defenders in the GOP standing in the way of policies that would internalize externalities and improve how these markets function. Despite what Republican "market defenders" say, in the end distribution -- who gets what -- is more important than efficiency for this group. They talk about efficiency, growth, blah, blah, blah, but in the end protecting the ability of supporters to earn high profits in finance, energy -- wherever -- carries the day over regulations that could make these markets work better.

Thursday, May 10, 2012

"Game Over for the Climate"

I think it would be faid to say that James Hanson is not a tar sands advocate:

Game Over for the Climate, by James Hansen, Commentary, New York Times: Global warming isn’t a prediction. It is happening. That is why I was so troubled to read a recent interview with President Obama ... in which he said that Canada would exploit the oil in its vast tar sands reserves “regardless of what we do.”
If Canada proceeds, and we do nothing, it will be game over for the climate..., concentrations of carbon dioxide in the atmosphere eventually would reach levels higher than in the Pliocene era, more than 2.5 million years ago, when sea level was at least 50 feet higher than it is now. ... Sea levels would rise and destroy coastal cities. Global temperatures would become intolerable. Twenty to 50 percent of the planet’s species would be driven to extinction. Civilization would be at risk.
That is the long-term outlook. But near-term, things will be bad enough. Over the next several decades, the Western United States and the semi-arid region from North Dakota to Texas will develop semi-permanent drought... Economic losses would be incalculable. ...
If this sounds apocalyptic, it is. This is why we need to reduce emissions dramatically. President Obama has the power not only to deny tar sands oil additional access to Gulf Coast refining,... but also to encourage economic incentives to leave tar sands and other dirty fuels in the ground. ...
We should impose a gradually rising carbon fee,... then distribute 100 percent of the collections to all Americans ... every month. The government would not get a penny. ... Not only that, the reduction in oil use resulting from the carbon price would be nearly six times as great as the oil supply from the proposed pipeline from Canada, rendering the pipeline superfluous...
But instead..., the world’s governments are forcing the public to subsidize fossil fuels with hundreds of billions of dollars per year. ...
President Obama speaks of a “planet in peril,” but he does not provide the leadership needed to change the world’s course. ... The science of the situation is clear — it’s time for the politics to follow. ... Every major national science academy in the world has reported that global warming is real, caused mostly by humans, and requires urgent action. The cost of acting goes far higher the longer we wait — we can’t wait any longer to avoid the worst and be judged immoral by coming generations.

Thursday, April 26, 2012

The Clean Water Act Worked

Pollution levels off the California coast have dropped significantly since the passage of the Clean Water Act (i.e., contra Repulicans, government is not always the problem):

First evaluation of the Clean Water Act's effects on coastal waters reveals major successes, EurekAlert: Landmark legislation helped clean up LA's coastal waters over the past 40 years, study indicates
Levels of copper, cadmium, lead and other metals in Southern California's coastal waters have plummeted over the past four decades, according to new research from USC.
Samples taken off the coast reveal that the waters have seen a 100-fold decrease in lead and a 400-fold decrease in copper and cadmium. Concentrations of metals in the surface waters off Los Angeles are now comparable to levels found in surface waters along a remote stretch of Mexico's Baja Peninsula.
Sergio Sañudo-Wilhelmy, who led the research team, attributed the cleaner water to sewage treatment regulations that were part of the Clean Water Act of 1972 and to the phase-out of leaded gasoline in the 1970s and 1980s. ...

Friday, April 13, 2012

Lower Growth Can Be Better Than Higher Growth

Whenever the subject of carbon taxes is raised, the inevitable response from the political right is that such a tax would lower economic growth and employment, and therefore we shouldn't do this (the "it will kill growth and jobs" objection is a standard reply to policies the right doesn't like). Lower growth is, of course, worse than higher growth.

But that's not necessarily true. If firms are allowed to pass some of the costs of production to others in the form of externalities, then it's likely that firms will grow faster than is optimal when all costs are internalized. If we force these firms to internalize the costs of production -- to pay the full costs of production, including in pollution/environmental costs -- then instead of moving away from the optimal growth path to a lower, suboptimal path, we would be moving from higher than optimal growth toward the optimum. More is not better when more depends upon being able to pass environmental costs costs off to others.

Sunday, April 08, 2012

Links for 2012-04-08

Saturday, March 31, 2012

"Why Gas Prices Are Out of Any President’s Control"

One more quick one from the airport -- Richard Thaler attempts to nudge people away from the idea that the president can control gas prices (and he calls for an increase in the gas tax):

Why Gas Prices Are Out of Any President’s Control, by Richard Thaler, Commentary, NY Times: Everyone knows it’s dangerous to ingest gasoline or to inhale its fumes. But I am starting to believe that merely thinking about the price of gasoline can damage cognitive processing. Thus I may be risking some of my precious few remaining brain cells by writing about that topic.
Here is a one-item test to see whether you are guilty of cloudy thinking about gas prices: Do you believe that they are something a president can control? Many Americans believe that the answer is yes, but any respectable economist will tell you that the answer is no.
Consider a recent poll of a panel of economists conducted by the University of Chicago Booth School of Business, where I teach. ... The 41 panel members were asked whether they agreed with the following statement: “Changes in U.S. gasoline prices over the past 10 years have predominantly been due to market factors rather than U.S. federal economic or energy policies.”
Not a single member of the panel disagreed with the statement.
Here is why: Oil is a global market in which America is a big consumer but a small supplier. ...[continue reading]...