Thursday, November 30, 2006

"Eco-Freaks": The 2% fight back

Given the relatively green/greenybrown nature of this blog it is always good to provide a little balance.

The issue however harks back to a post Matt wrote about media balance. Journalists often feel the need to put both sides of an argument to "balance" their piece even if, as the CEO of Shell said in a post 3 or so back, 98% of scientists believe in one thing.

The question, therefore, is how much attention should the 2% get? Of course this very post falls into the same trap.

However, in this case the 2% are showing quite clearly why they are the 2%. The review of this book has to be read to be believed. I also include a link to the original "green" review that cannot be posted here due to its rather "industrial" nature.

Book Description

Tree-huggers may actually be squeezing the life out of the environment.

In book that is alternately alarming, enlightening, ironic, and entertaining, award-winning journalist John Berlau explores the many ways that shortsighted environmentalism actually endangers trees, wildlife, and people. In chapter after chapter, Berlau debunks myths and libels about:

global warming and climate change
the dangers of pesticides like DDT
trees and pollution
fuel economy and the auto industry
the threat posed by asbestos
the lifesaving role of dams and levees
plans to "rewild" America
Mother Nature is not a gentle person, and Berlau's pointed reporting reveals the very real dangers to people and their environments when Eco-Freaks prevent us from restraining her.

"Berlau makes a powerful case. . . . Thinking environmentalists who read this book will be forced to revisit at least some of their most deeply held beliefs."
-Joel Himelfarb, Washington Times

"Berlau says a lot of things that are not generally known that needed to be said."
-Bruce N. Ames, recipient, National Medal of Science, 1998

Save the Planet . . . and Ourselves

In Eco-Freaks, award-winning journalist John Berlau provides a much needed and startling expose about how the environmental movement with its radical, shortsighted eco-activists has actually helped amplify the dangers of natural disasters and destroyed the lives and property of millions of Americans.

As Berlau writes, "America . . . is still mighty prosperous, but environmentalism is putting us on the brink of danger as well. As technology after technology that our grandparents put in place is being banned, and new technologies never even come to market, we risk a public-health disaster. Environmentalists have promoted all sorts of doomsday scenarios about population explosions and massive cancer crises from pesticides that have been shown to be false. But now, because we have done away with so many useful products based on those scares, we are in danger of an old-fashion doomsday returning, because we've lost what protected us from the wrath of nature. Indeed, as we will see throughout this book, public health hazards caused by environmental policies are already on the scene."

To read EarthchangeII's opinion read "listen up you kommie lying evil SOB eco terrirists, we're on to ya, and we know where you live..."

I think we know from which side of the fence this reviewer comes from. Equally, Jerry Saperstein's review provides the climate change skeptic view.
John Berlau has a mesage that must not be ignored: environmentalism - and environmentalists - are hazardous to your health and safety. Far from being a crackpot, Berlau exposes leading environmentalists for the crackpots, often dishonest crackpots, they are. More importantly, more shockingly, Berlau patiently explains in detail just how environmentalism, often based on pseudo-science or outright falsity, is killing people or subjecting them to unnecessary danger.

Everyday, children in Africa and other places die from malaria and other preventable diseases - because of the zeal of so-called environmentalists in insisting on a ban of DDT. DDT has never been proven to cause disease in humans or to be a danger to animals in normal amounts, but its effectiveness in combatting mosquito-borne diseases is unquestioned. In fact, some environmentalists may actually see the untold thousands of preventable deaths as a blessing, helping to keep the Earth's population under control.

In the United States, well over a million schoolchildren and millions of adults are put at risk because environmentalists - based on the findings of a fake doctor - have forced asbestos out of the marketplace. No fireproofing as effective as asbestos has been found. In fact, had asbestos been used, the World Trade Center towers might not have collapsed or at least would have stood longer, preventing the deaths of hundreds, if not thousands.

Misguided, uninformed environmentalists are changing the shape of the world through their crusade in behalf of "nature". Except the nature of the environmentalists "nature" is an illusion. For example, Berlau recounts that the American Indian reshaped North America in the 13,000 or so years before the Europeans arrived. The treeless Great Plains are a result of Indians tampering with "nature" for their own survival. Likewise, Berlau explains how America is now more heavily forested than it was hundreds of years ago - and that this may not be an entirely good thing.

Berlau is not a crank in any sense of the word, though is cannot be doubted that the environmentalists and their fellow-travelers will shortly subject him to their slime machine. What the environmentalists won't talk about is the racism of John Muir, a founder of the Sierra Club or their own rather frightening attitudes toward the need to control population by whatever means necessary.

Berlau painstakingly documents each of his assertions. Al Gore, by the way, is provably a major prevaricator on the environment.

Author Berlau surveys a wide swath of American life in this expose: from how environmentalists are responsible for much of the Hurricane Katrina damage to New Orleans because of their opposition to flood gates to the real rationale for enviro campaigns against automobiles and accessible woodlands.

Environmentalists are not your friends. And environmentalists are certainly less than honest in their campaigns to dramatically change your life and freedoms. John Berlau has done the nation, if not the world, a valuable service in exposing the environmentalist movement. (His well researched background briefs on some of the leaders of the movement are worth well more than the price of the book - you will not believe that the media takes some of these people seriously after reading their biographies and philosophies.)

This is definitely a "wake-up" and highly recommended.

You could not make it up. Whilst we would certainly not recommend buying this book if you do use the above link as it will certainly not be going into our new and improved bookstore with 26 recommended texts now listed ;-)

Wednesday, November 29, 2006

Global CO2 emissions continue to rise

Not only are global CO2 emissions rising, but the rate of growth is rising too, so says a recent study by the Global Carbon Project.

"From 2000 to 2005, the growth rate of carbon dioxide emissions was more than 2.5% per year, whereas in the 1990s it was less than 1% per year," said Dr Mike Rapauch of the Australian government's research organisation CSIRO, who co-chairs the Global Carbon Project.
their study suggests that these recent increases are a result of 2 factors;

(i) we are now becoming less carbon efficient so, globally, CO2 emissions per unit of GDP are now rising after many years of decline. In short, the project concludes that energy efficiency gains have stalled.

(ii) as the price of oil increases some parts of the world are turning to charcoal use which has a higher carbon content than oil.

"At these rates, it certainly sounds like we'll end up towards the high end of the emission scenarios considered by the IPCC," commented Myles Allen from Oxford University, one of Britain's leading climate modellers.

Full story here.

The above story suggests we should be all the more grateful for the fact that Phase 2 of the EU emissions trading scheme sounds like it will require bigger cuts in emissions (i.e. fewer permits will be distributed). Phase 1 of the permit scheme was criticised for requiring only modest emissions abatement. See full story here and also Rob's post below.

European Emissions Trading Scheme: Facts and Figures

This post is simply to provide some facts and figures related to the European Trading Scheme so that they are always to hand for myself as much as anything. I hope others also find this useful. Thanks to ENN.

What is the European Emissions Trading Scheme?
Some key facts about the European Union's carbon market.

** The EU's carbon market is the 25-nation bloc's main weapon against climate change and is meant to put a price on emissions of carbon dioxide (CO2) and so motivate industry to look for clean sources of energy.

** CO2 is one of several greenhouse gases that trap heat in the atmosphere and are expected to contribute to potentially catastrophic climate change -- including droughts, floods and heatwaves -- by 2100, if emissions continue unchecked.

** CO2 is a by-product of burning fossil fuels like coal, oil and gas for power and transport. Alternative sources of energy like biofuels, wind, solar and nuclear have much lower or zero CO2 emissions.

** Europe's carbon trading scheme launched in 2005 and covers almost half of the European Union's CO2 emissions, from energy-intensive sectors including power, pulp, paper, ferrous metals, oil, gas, cement, lime and glass.

** The scheme is meant to drive down CO2 emissions and so help the EU meet its Kyoto Protocol target of cutting its greenhouse gas emissions by 8 percent by 2012 versus 1990 levels.

** The EU scheme works on a "Cap and Trade" basis -- each installation covered by the scheme gets a certain quota of emissions permits and they can buy or sell permits depending on whether they exceed or undercut that quota. There is an overall European quota cap which cannot be exceeded.

** Installations must surrender by 30 April each year the number of permits equalling their total emissions for the preceding calendar year.

** In its first phase from 2005-07, the European market allocated permits allowing 2.19 billion tonnes of carbon dioxide emissions per year from some 11,428 industrial installations across some 25 EU member states.

** In 2005 actual emissions were roughly some 1.97 billion tonnes, meaning there was a surplus of permits which sent carbon prices crashing in April and May this year, when the surplus was revealed.

** Emissions permits for December 2006 delivery traded at some 30 euros ($39.41) in April 2006, but subsequently crashed and were trading at 8.5 euros on the European Climate Exchange on Tuesday.

** On Wednesday the European Commission gets the chance to restore a higher carbon price for the second phase of the market from 2008-12 by rejecting member states' proposed future emissions plans, which most analysts say are too lax.

** According to the World Bank, the EU carbon market traded some 764 million tonnes of emissions permits worth $18.8 billion in the first nine months of 2006, versus 324 million tonnes worth $8.2 billion in the whole of 2005, the market's first year.

Tuesday, November 28, 2006

"Multinationals and globalization" - The New Animal Testing Haven Hypothesis

Matt Cole and myself have written numerous (too many) papers that examine different aspects of the "pollution haven hypothesis" that hypothesises that:

"The pollution haven hypothesis (PHH) implies that a country with a lower than average level of environmental regulations will have a comparative advantage in pollution intensive production. Since there is a high correlation between a country’s per capita income level and the stringency of its environmental regulations the pure PHH implies that developing countries or regions (the South) will become pollution havens, whilst the developed world (the North) will specialize in clean production."

The reason for our research is that, although fairly intuitive, the evidence for PHH effects is mixed at best. So maybe multinational corporations are not always the bad guys or at least not as bad as they are often portrayed.

However, in a article in today's International Herald Tribune comes news that there may be another "Haven Hypothesis" to get our teeth into.

Now it appears that China has a comparative advantage in the testing of drugs and chemicals on animals. Where such work has become increasingly difficult in the West it is still relatively easy to get such work done in the developing world.

For all the protests and regulatory pressures in the West it appears life is not getting any better for the global animal population.

This article pulls no punches and is an interesting read and marks an important development. Hence I have posted it in full. There must be an academic paper in here somewhere...

Few rules and fewer protesters draw animal testing to China
BEIJING: Glenn Rice wants to turn China's dogs into global economic assets.

Because animal rights groups make it difficult for drug companies to build or expand animal-testing laboratories in the United States, Europe and India, Rice, the chief executive of Bridge Pharmaceuticals, is outsourcing the work to China, where scientists are cheap and plentiful and animal-rights protesters are muffled by an authoritarian state.

"This is a country with a large number of canines and primates, and if we establish preclinical testing facilities here, we can change the dynamics of the industry," said Rice, who in 2004 created his company, which is based in San Francisco, out of the life sciences department at the Stanford Research Institute in Menlo Park, California. "Animal testing also does not have the political issues it has in the U.S. or Europe or even India, where there are religious issues as well. So now big pharma is looking to move to China in a big way."

Beijing is fast becoming the leading Chinese biotechnology center, and Bridge, with a base here in Zhongguancun Life Science Park, was given "big benefits and a five-year tax holiday" for choosing the capital as its home, Rice said.

"But beyond that, it's the whole menu of advantages that attracted us," said Rice, who now alternates weekly between Beijing and San Francisco. "In terms of animal supply, China is a good place to be, as it is the world's largest supplier of lab monkeys and canines - mostly beagles."

Large drug companies like Novartis, Pfizer, Eli Lilly and Roche plan to set up research and development centers in China. But the real growth is likely to come from midsized companies that outsource their animal testing or preclinical trials to companies like Bridge, which can offer them prices that are about half of those charged by U.S.- based competitors. By 2008, that could double the size of the preclinical outsourcing industry, which was worth $2 billion last year, Rice said.

Outsourcing research to China will also benefit people suffering from so- called orphan diseases, illnesses that afflict small numbers of people.

Given the steep cost of drug development and the steeper rates of failure, "unless there is a market of about $500 million a year for a drug, big pharma companies will not invest in it," Rice said. With China's lower costs, he said, "it becomes feasible to develop drugs for orphan diseases."

Despite such benefits, the subject of animal testing is a difficult one. U.S. regulations generally require that all drugs be tested on at least two species, usually rats and then dogs or monkeys, before being submitted for approval in the United States by the Food and Drug Administration. Bridge's Beijing facilities have been designed to meet U.S. standards on animal care, and it expects to be certified by the year-end. Air and water quality are carefully monitored, and the cages are regularly cleaned.

But there is no denying the work being done here: The beagles in Bridge's cages are infected with diseases, operated on, and fed substances that can severely affect their health. Eventually, their organs are removed and examined.

"Unfortunately, there is no substitute to testing on live animals," Rice said. "If we stopped animal testing, new drug development would stop short in its tracks."

While animal rights are discussed in China, advocates are not openly militant. The government would not allow it. "We believe in engagement rather than protest," said Lu Di, director of the Chinese Association for the Protection of Small Animals in Beijing.

"Animal testing is inevitable, and we want to focus on advocating companies and universities use the best standards and processes they can to minimize any pain caused to the animals."

But it is unclear how well the Chinese animal testing industry will be regulated. Beijing did not enact any animal welfare regulations until 2004, and they are ineffective and inconsistently implemented, said Lu, whose organization is the largest animal welfare group in China. The track record of Chinese companies that conduct animal testing is not well documented, mostly because neither the government nor the industry has studied it.

"We are very aware and very concerned about this recent and disturbing trend of companies to contract with laboratories in countries in which animal welfare oversight is poor and public awareness is low," said Jason Baker, Asia- Pacific director for People for the Ethical Treatment of Animals, or PETA. "There is no doubt this is intended to circumvent American animal welfare laws, as minimal and unenforced as those may be."

Baker said PETA tried to "hold companies accountable for the actions of their contractors" and publicized any abuse of animals by companies operating overseas. The group has an office in Hong Kong and hopes to open an office in mainland China.

Rice said that when Bridge considered doing business in China, it realized that it could not rely on local companies because they lacked rigid standards and quality control.

"We've built our own organization," he said, "so we can control every aspect of it, and we spend a lot on hiring the best people and training them."

For example, Bridge's operations in Beijing are headed by Ada Kung, who is from Taiwan and who studied and worked in the United States. Without a core team of U.S.-educated and experienced managers, Bridge would not be able to maintain international standards on quality and intellectual property rights protection, Rice said, but the company's Chinese employees are learning fast.

"Today, it may seem like it's too early to do much more than we are doing in China," he said. "But tomorrow, or the day after, it'll be a different story."

Hat-tip to this gristmill story.

Monday, November 27, 2006

Mercury from China to Canada: Now that's transboundary pollution

Mercury From Chinese Coal Use Pollutes Oregon's Willamette River

Via the Oregonian , we learn that “The inky smoke belched by chimneys in Chinese cities such as Linfen and Datong contains mercury, a metal linked to fetal and child development problems. Trace amounts of the poison can take less than a week to reach Oregon, where research suggests that about one-fifth of the mercury entering the Willamette River comes from abroad -- increasingly from China.” No doubt the same thing is happening along much of the west coast of Canada, which is why China’s sanctioning of coal to liquid technology to produce transportation fuel is directly significant to North Americans, and why it is so important to help China become more reliant on efficient processes and products. Wondering how those salmon get mercury contamination? Herein lies a partial answer. Engagement on a post-Kyoto international agreement looks ever more important.

Hofmeister quote: Shell and Climate Change

A quick post with a quick quote:

Even right-wingers will have difficulty dismissing the likes of Shell Oil executive John Hofmeister, who was quoted at a National Press Club function saying:

"We have to deal with greenhouse gases. From Shell's point of view, the debate is over. When 98 percent of scientists agree, who is Shell to say, 'Let's debate the science'?"

Hat-tip Gristmill, Climate change deniers irrelevant.


This quote is from a Washington Post article - Energy Firms Come to Terms With Climate Change.

In a follow up to my post on the launch of the Inconvenient Truth DVD comes the news that:
Exxon Mobil Corp., the highest-profile corporate skeptic about global warming, said in September that it was considering ending its funding of a think tank that has sought to cast doubts on climate change. And on Nov. 2, the company announced that it will contribute more than $1.25 million to a European Union study on how to store carbon dioxide in natural gas fields in the Norwegian North Sea, Algeria and Germany.

Perhaps, if the paymasters have stopped paying, then some climate change skeptic journalists will soon have to start writing about something else after all .

Sunday, November 26, 2006

"China and the Environment" - from bad to worse?

Not a day goes by without more evidence of the serious state of environmental degradation in China.

Here are three recent summaries:

Pollution in China getting worse (November 23rd 2006)

The level of pollution in China is getting worse, AFP reported. A report by the State Environmental Protection Administration, the country's environmental watchdog, said local governments and industries continue to ignore environmental laws in their pursuit for growth. Pollution in rivers and lakes is worsening and air pollution in cities is affecting the health of millions. Booming industries coupled with a lack of emphasis on environmental controls at the local level are mostly to blame, the report noted. "Some district level governments are evaluating only 30 to 40 % of industrial projects before approving them," the administration said. The country produced more than 12 billion tons of industrial waste-water in the first six months of the year, up 2.4% from the same period in 2005.

Study links pollution, rising lung disease (November 17th 2006)

A study of patients in 30 hospitals in six big cities, including Beijing and Shanghai, found that worsening environmental conditions are causing a rise in the incidence of chronic lung diseases, state media reported. Researchers also said increasing numbers of urban youths are suffering from emphysema and chronic bronchitis, diseases normally associated with the elderly. About 9% of sufferers in the study were aged under 40, while 73% of those surveyed with chronic lung disease were male. Around 43 million people in China have chronic lung disease, with about one million of them dying each year.

Now for the good news:

China plans world's largest solar plant (November 22nd 2006)

China said Tuesday it will build the world's largest solar power station in the poor but sunny northwestern province of Gansu, Reuters reported, citing the official Xinhua news agency. The 100 megawatt project in Dunhuang would cost approximately US$766 million and construction would take five years. Xinhua claimed the world's current largest solar power station was a 5mw project in Leipzig, Germany, with 33,500 solar panels. But a solar plant in Arnstein near Wuerzburg in southern Germany has a 12mw capacity, according to its operator S.A.G. Solarstrom, Reuters said. The country is seeking to ease its dependence on coal, which currently accounts for about 70% of its energy consumption.

The figures that still take some thinking about are the estimates of 43 million Chinese with chronic lung disease with a million dying each year.

The Stern Report and the discounting issue: The Nordhaus Review

This recent review of the Stern Report is by William Nordhaus (Sterling Professor of Economics; Cowles Foundation, Yale University).

Hopefully, our own David Maddison will soon be providing his take on the Stern Report - by all accounts he has read the entire 700 pages. One issue that is sure to come up is that concentrated on by Nordhaus - "discounting".

The Stern Review on the Economics of Climate Change [PDF]

I will just pull out the main points - reading is recommended.

Some comments:

First, the Review is an impressive document, buttressed by more than a dozen background studies. There is little new science or economics here, but it provides many new syntheses of the extensive and rapidly growing literature. While not as balanced and ponderously reviewed as the reports of the Intergovernmental Panel on Climate Change (IPCC), it is much more current than the latest IPCC report, published in 2001.

Second, while I question some of the Review’s modeling and economic assumptions, its results are fundamentally correct in sign if not in size. The approach taken in the Review – selecting climate-change policies with an eye to balancing economic needs with environmental dangers – is solidly grounded in mainstream economic analysis.

Third, the Review should be viewed as a political document.

However, it is not an academic study. Like most government reports, the Review was published without an appraisal of methods and assumptions by independent outside experts. But even the analysis of HM Government needs peer review.

The fourth comment concerns the Review’s emphasis on the need for increasing the price of carbon emissions. The Review summarizes its discussion here as follows, “Creating a transparent and comparable carbon price signal around the world is an urgent challenge for international collective action.” In plain English, the Review argues that it is critical to have a harmonized carbon tax or similar regulatory device both to provide incentives to individual firms and households and to stimulate research and development in low-carbon technologies. Carbon prices must be raised to transmit the social costs of GHG emissions to the everyday decisions of
billions of firms and people. This simple yet inconvenient economic insight is virtually absent from most political discussions of climate change policy (including the marathon slide show by Al Gore in An Inconvenient Truth).

But these points are not the nub of the matter. Rather, and this is the final comment, the Review’s radical revision arises because of an extreme assumption about discounting. Discounting is a factor in climate-change policy – indeed in all investment decisions – which involves the relative weight of future and present payoffs. At first blush, this area would appear a technicality that should properly be left to abstruse treatises and graduate courses in economics. Unfortunately, it cannot be buried in a footnote, for discounting is the central to the radical revision. The Review proposes using a social discount rate that is essentially zero. Combined with other assumptions, this magnifies enormously impacts in the distant future and rationalizes deep cuts in emissions, and indeed in all consumption, today. If we were to substitute more conventional discount rates used in other global-warming analyses, by governments, by consumers, or by businesses, the Review’s
dramatic results would disappear, and we would come back to the climate policy ramp described above. The balance of this discussion focuses on this central issue.

The conclusion, after a further 20 pages describing and explaining the discounting problem, is as follows:
The radical revision of the economics of climate change proposed by the Review does not arise from any new economics, science, or modeling. Rather, it depends decisively on the assumption of a near-zero social discount rate. The Review’s unambiguous conclusions about the need for extreme immediate action will not survive the substitution of discounting assumptions that are consistent with today’s market place. So the central questions about global-warming policy – how much, how fast, and how costly – remain open. The Review informs but does not answer these fundamental questions.

Any "green" economist or activist should read this document to get an understanding of how the Stern report uses discount rates to arrive at its conclusions and the profound effect that the choice of discount rate has on these conclusions.

Trading taken too far?

This site is wholly in favour of the EU emissions trading scheme whereby major emitters of carbon dioxide in Europe are forced to participate in a cap and trade scheme. Although the scheme has not succeeded in reducing carbon emissions by much this is purely due to the overly generous allowances. The Observer reports that the EU is soon to announce the allocations for Phase II of the scheme and hopefully these will be less liberal.

One suggestion being considered by the EU is that each individual road user be given an allocation of carbon permits. I find this quite extraordinary: why should road users be handed a further subsidy? Presumably carbon allowances will not be given out to those who do not own a vehicle. In addition, what are the transactions costs of the scheme and wouldn't it be simpler to adjust national fuel taxes for the same purpose? If anyone should be included in the scheme it should be the petrol retailers and not motorists. The effect will be the same because they will immediately pass on the cost to individual road users. But in this way road users avoid becoming involved in two transactions, one for the petrol and one for the carbon.

This week the EU will reveal allocations for the next phase of the Europe-wide greenhouse gas emissions trading, a market worth ¤12bn (£8.1bn) and covering 11,000 installations throughout Europe. It is determined to issue less generous allocations to countries after criticism that the scheme was failing to achieve its target.

The EU is keen to include airlines in the scheme but does not want to put them at a commercial disadvantage with US carriers, which received huge federal subsidies after the 9/11 terrorist attacks.

The Commission is considering bringing individual car drivers into the scheme, giving people a personal carbon allowance to buy or sell. It also wants to take forward a ¤2.5bn European Institute to partner universities and private sector firms exploring new, clean technologies.

Friday, November 24, 2006

Inconvenient truth released: full truth, half truth or pure hollywood excess?

To celebrate the release of the DVD of Al Gore's Inconvenient Truth (click below) we post the following example of how the Oil company millions are used to employ "senior researchers" to print the "truth".

I am not sure why I am surprised that so there are so many groups such as the Competitive Enterprise Institute paid to put out such propaganda but it certainly disappoints. I accept the charge that this post helps to publicise this well funded Institute but one should always consider all sides of a story. Interestingly, it does not take much digging to realise that some of these so-called Think-Tanks are linked. For example, Iain Murray (Senior Fellow) of CEI also "owns and runs The Commons Blog, a web log promoting the cause of free market environmentalism" - a site we have mentioned on here before.

This suggests these "think-tanks" actually have a lot less thoughts that one might have originally expected. I would also like to see a list of "donors" to these sites. These sleak media outfits are obviously well funded and must pay these so-called "experts" a good wage. I can't help feeling that some of these writers (with PhD's from Harvard and other places) could find better ways to employ their talents.

Gore ‘Inconvenient Truth’ DVD Dogged by Falsehoods
Al Gore’s “An Inconvenient Truth” documentary is scheduled for a Tuesday DVD release, but here’s what won’t be included in the purchase price: the actual truth. In a new short video series, PowerPoint presentation, and forthcoming book, CEI Senior Fellow Marlo Lewis, Jr. rebuts a few false and misleading Gore claims.


· Gore: “We have vastly increased the amount of carbon dioxide—the most important of the so-called greenhouse gases.”

· The Truth: Using a misleading and manipulative picture, Gore wants us to think we’re literally seeing carbon dioxide pour out of smokestacks. But carbon dioxide is as invisible as oxygen. More important, carbon dioxide is a form of fertilizer for plants. Literally hundreds of scientific observations show that plants raised in carbon dioxide-enriched environments grow faster, larger, and produce more fruit. Get the full story.


· Gore: “Textbooks had to be re-written in 2004. They used to say, ‘It’s impossible to have hurricanes in the South Atlantic.’ But that year, for the first time ever, a hurricane hit Brazil.”

· The Truth: Gore would have us believe that global warming and the associated rise in sea surface temperatures created Hurricane Catarina, the first hurricane on record ever to strike Brazil. Here’s what really happened. In 2004, Brazil had the coldest summer months in 25 years; the air was so much colder than the water that it caused the same kind of heat flux from the water to the air that fuels hurricanes in warm seas. Get the full story.


· Gore: “And in recent years the rate of [global warming] increase has been accelerating."

· The Truth: That’s just plain wrong. Over the last 30 years, the warming rate has been remarkably constant—about 0.17 degrees Celsius per decade. And for 25 years before that, the world was actually cooling! The actual rate of warming is modest and non-accelerating. A better title for a documentary about global warming would be: “Apocalypse Not!” Get the full story.


· Gore: “When the [melt-]water reaches the bottom of the ice, it lubricates the surface of the bedrock and destabilizes the ice mass, raising fears that the ice mass will slide more quickly toward the ocean.”

· The Truth: Seems plausible, but only because Gore rips images out of their context. The photograph and diagram shown in the documentary come from a NASA study published in Science magazine in 2002. The study found that “moulins”—vertical water tunnels formed from pools of melt water at the surface of the ice sheet—accelerate glacial flow in the summertime, but the increase in speed over the entire year is no more than a few percent. Get the full story.

There are even powerpoint slides available. They are sure to provide interesting viewing.
Inconvenient Truths for Al Gore

In Al Gore's An Inconvenient Truth, the only facts and studies considered are those convenient to Gore's scare-them-green agenda. And in many instances, he distorts the evidence he cites. In fact, nearly every significant statement Gore makes regarding climate science and climate policy is either one sided, misleading, exaggerated, speculative, or wrong.

--Marlo Lewis, Jr., Senior Fellow, Competitive Enterprise Institute

In the following book, videos, and Powerpoint presentation, CEI Senior Fellow Marlo Lewis, Jr. reveals the inconvenient truths that Al Gore ignored in the book and movie versions of his global warming presentation, An Inconvenient Truth.

Read the book: A Skeptic's Guide to An Inconvenient Truth (downloadable by chapters in PDF)

Download the Powerpoint presentation

This is one slide from the powerpoint presentation that caught my eye (probably because it had "GDP" in the first line).

Quote from Inconvenient Truth:
“The United States is responsible for more greenhouse gas pollution than South America, Africa, the Middle East, Australia, Japan, and Asia—all put together.” (AIT, pp. 250-251)

Powerpoint slide:
The U.S., with less than 5% of global population, produces 28.3%* of global GDP, including:
Agricultural products and research (we feed people)
Medical advances on every front (we fix people)
Consumer products (we fulfill people)
Global investment (we fund people)
Defense of democracy (we free people)
Without our CO2 emissions, the world would be poorer, sicker, and less free

Where does one start?

The best line of course is:

Consumer products (We fulfill people).

I can't help feeling that Americans and many others could be more fulfilled if they did not have the pressure (from advertising) "to consume" just so much in an attempt to reach some materialist heaven. Can we only become fulfilled by consuming things?

Finally, is the final sentencce saying that if the US cut its emissions of CO2 that the world would become less free? The high US emission levels per head must mean Americans are the "most free" citizens in the world. Is this a generally agreed statement?

Thursday, November 23, 2006

Pollution causes Hong Kong downgrade by Merrill Lynch

Following up on the comment to the previous post this article makes for interesting reading. The economics of this story are linked to some nice work in the Urban Economics literature. Matt Kahn covers this issue in depth in his accessible Green Cities book.
Green Cities: Urban Growth and the Environment
As an aside I intend to write a full review of this text in the next week or so but for now I would recommend it to anyone interested in environmental economics but does not want to feel like they are reading a textbook or actually working. It has a Freakonomics for environmental economists feel to it but has more structure and a little more depth (which may unfortunately cost it some of the more casual non-economist readers).

This is the sort of issue that is covered in Green Cities - how local governments can use the greening of a city via green policies to attract high skilled workers who also tend to work in "clean" jobs, thus helping to create a virtuous circle for the area (and an increase in house prices). The well-educated and skilled workers then tend to vote for even greener politicians and policies. There are, as you can imagine, numerous ramifications and caveats along the way.

The article below however, also reveals what the “browning” of a city can do. I suspect that Hong Kong politicians now have pollution high on their list of things to address if they are not already doing so. The question is how much they can do about transboundary pollution from the nearby industrial regions in China?

Merrill Downgrades HK Office Sector, Cites Pollution

HONG KONG - Merrill Lynch is advising clients to sell Hong Kong office landlords in favour of Singapore's, saying the city's air pollution will prompt skilled talent to move further south.

"Buy Singapore office landlords, sell Hong Kong office landlords," the US investment bank said in a report. "The government in HK is relatively powerless to address the true causes until Beijing gets tough. It could be a long and choking wait that many could choose not to endure."
The long-term competitiveness of Hong Kong is in "some doubt" due to the poor air quality and potential exodus of highly skilled talent, especially from the financial service sector, who would chose to live elsewhere, the report said.

"Official policy fails to recognise, and ultimately respond, to the competitive threat from Singapore," Merrill Lynch said.

Merrill Lynch forecast a 5 percent decline in Hong Kong office rents in 2007 and downgraded the office sector.

It rated "sell" on Hongkong Land Holdings Ltd., Hysan Development Co. Ltd. and Great Eagle Holdings Ltd.

The bank said the Singapore companies it would pick included City Developments, Suntec REIT and CapitaCommercial Trust.

Singapore is set to benefit with the population likely to almost double over the next decade due to mass immigration, including from Hong Kong, leading to growing demand for housing and Grade A office, the US bank said.

The report said "this is a developed economy with developing standards of particulate contamination drifting down from the Pearl River delta" and the Hong Kong government estimated the clean-up costs would amount to HK$51 billion (US$6.5 billion).

Shares of Great Eagle gained 0.43 percent to HK$23.50 on Wednesday morning, Hysan was up 0.5 percent at HK$20.15 while Hongkong Land fell 2.7 percent to US$3.58.

Wednesday, November 22, 2006

Hazardous Fog in China: Where did that Javelin go?

This photograph shows clearly (or not so clearly) the continuing pollution problems in China (Beijing in this case).

The key point is that the pollution index is obviously very high. If such an "event" occured during the Olympics you can imagine the chaos. Javelin anyone?

Apartment and office buildings in Beijing central business district are covered by heavy fog which enveloped the Chinese capital and much of north China November 21, 2006.

Heavy fog enveloped Beijing and much of north China on Monday, forcing the closure of highways, delaying flights across an area as large as Britain and lifting the pollution index in the capital to one level below hazardous.

Sunday, November 19, 2006

To Iceland we no longer "goeth"

I echo Gristmill's sentiment:
Ah, I love it when the market works! Bottom line: you want tourist dollars, then stop killing whales.

This is a follow on post from our "Buy a Whale: the Coase theorem in action" article where a whale was estimated to be worth $180,000. The idea was to raise this money on EBAY and pay Icelandic fishermen NOT to kill one whale - Coase in action.

I suspect the cost to Iceland will be a lot greater than any money raised by hunting whales. The problem is of course that those in Iceland that suffer (hotel owners etc.) are not those that are killing the whales. Coase (or problems with Coase) again.

The Resumption Of Whaling Hurts Iceland Tourism (New York Times).
The Icelandic government is getting a quick lesson in ethical tourism as a result of its decision last month to resume commercial whaling, despite a 21-year international moratorium on the practice. The airline Icelandair and several of the country’s leading whale watching companies have reported cancellations in response to the Fisheries Ministry’s policy, which maintains that the whales are a sustainable resource. The new rules allow the taking of 30 minke whales and 9 fin whales, like one killed last month, right, by the end of August 2007.

“We have had people canceling their reservations as a political gesture,” said Clive Stacey, managing director of Discover the World, a British company that sends on average 7,000 tourists a year to Iceland, and that has now added a travelers forum to its Web site ( As one tourist writes, “We had told all our friends to go and visit Iceland to see the whales, as well as the wonderful scenery, but how can we do that now?”

According to Asbjorn Bjorgvinsson, the chairman of the Icelandic Whale Watching Association, last year some 90,000 tourists went on whale watching trips — an industry begun in the early 1990’s following a Greenpeace-organized boycott that led to the government ban on whaling in 1989.

Mr. Bjorgvinsson and the managing director of Icelandair, Jon Karl Olafsson, who is also chairman of the Icelandic Tourism Association, are lobbying against the government’s decision, as are some 460 Icelandic companies worried about the effect on tourism.

“Travelers need to know that boycotting Iceland will only hurt the whales,” Mr. Stacey said. “The only people fighting for them are those in the tourist industry, and we need their support.”

The International Fund for Animal Welfare is also gathering protest letters from around the world at

I am not sure I buy the argument from Mr. Stacy that a boycott will only hurt the whales? Why? Will more whales be killed than are already being killed if tourism stops? Will the protests stop if the tourists stop? It could be argued that the tourist industry would protest a lot stonger if there were no tourists at all (at least before they all go bust).

Instead of using EBAY, one solution is for the Icelandic tourist industry to pay the whalers to stop hunting (with or without government support). Problem solved and Coase holds. The sufferers (hotel owners) pay the polluters (hunters).

Youth speaks: more environmental economists required?

Impressively, in a recent survey of 11-14 year olds in the UK, a higher percentage said they cared about recycling and climate change than homework or indeed boyfriends/girlfriends. How things change (don't they?) ;-)

The 2006 RM School Gate Survey reveals green attitudes of today's youth
The survey interestingly revealed that more 11-14 year old children are concerned about recycling (76%) and global warming/ climate change (74%) than having a boyfriend/ girlfriend (41%) or doing their homework (64%). It is encouraging to know then that the generation who could be ultimately responsible for halting climate change is already concerned about its effect, and how it can be stopped.

Assuming such attitudes persist and 50% of these 11-14 year olds go on to University (current UK government targets), does this mean, given similar percentages to today will study economics at Undergraduate and Postgraduate level, that demand for Environmental Economics courses will go up?

I believe the answer may well be YES.

Note to Head of Department: The price of scarce resources should rise.

Note to students: Our new specialist MSc in "Environmental Economics" is currently taking admission applications for 2007/2008 (pages also available in Chinese and Spanish).

Aside - would selection issues suggest that the possible increase in demand for environmental economics courses is an underestimate? - are those 11-14 year olds who said they DO care about the environment more likely to go to University as a result of other socio-economic characteristics)......

Analysis of why we might or might not expect selection bias welcome...

Pollution and Health: "We want life" and "Give us some air to breathe"

There is little doubt that high pollution levels are detrimental to the health of the local population and many studies provide evidence linking emission levels (of various kinds) to asthma and other respiratory diseases.

As part of some on going research (with a PhD student) we are examining the effects of community characteristics on pollution levels using the excellent TRI data from the US. Dan Millimet (Southern Methodist), among others,has done some interesting work in this area (as part of an extensive body of good empirical environmental work).

It was therefore interesting to read that other local communities, such as those in Serbia, are standing up to protest at high pollution levels and the emissions of cancer causing chemicals from industrial plants.

Perhaps the most astonishing quote from the article is:
The managers have acknowledged the toxic release, but said it was a "normal everyday procedure."

You could not make it up.

Thousands Protest Cancer-Causing Pollution in Industrial Serbian City
BELGRADE, Serbia — About 2,000 residents of an industrial Serbian town rallied in Belgrade Friday to protest at the release of cancer-causing pollution from a petrochemical plant.

Chanting "We want life" and "Give us some air to breathe," the protesters, some of whom marched on foot the 20 kilometres (12 miles) from Pancevo to Belgrade, rallied in front of Serbia's government headquarters.

They demanded urgent measures to stop the emission of benzene and chlorine, allegedly released into the air by a petrochemical plant, that triggered a public alarm system in Pancevo on Wednesday, prompting thousands of residents to remain indoors and cover their faces with surgical masks or handkerchiefs.

The toxins were reduced from 118 micrograms per cubic meter of air to "nearly normal levels" of about 16 micrograms by Friday, city officials said, seeking to ease concern in Pancevo as well as among Belgrade's population of nearly 2 million.

The government started legal proceedings against the oil refinery managers, blaming them for allowing the leakage during a night that was free of wind or rain, which would have reduced the concentration of the toxins in the air. The managers have acknowledged the toxic release, but said it was a "normal everyday procedure."

The protesters, carrying a banner reading "Belgrade, cancer is knocking on your door too," were demanding that Serbia's government hold an urgent session of the Cabinet in Pancevo on Saturday to permanently solve the problem by investing millions of dollars in air pollution filters.

But the protesters returned home "without promises from the government that the ecological problem will be resolved soon," said Srdjan Mikovic, the head of Pancevo's local government. He called on the protesters to start a blockade of the petrochemical facilities in Pancevo on Saturday.

The petrochemical complex was heavily bombarded during the 1999 NATO air attacks on Serbia over the Kosovo conflict, causing leakage and contamination of both the air and land. It has undergone repairs since then but still lacks sophisticated safeguards.

Pancevo, a town of some 50,000 people, along with a few other areas in Serbia, was designated an environmental hazard in a U.N. damage-assessment report conducted after the 1999 air war.

The Vienna-based Organization for Security and Cooperation in Europe issued a statement Friday expressing "serious concern over pollution in Pancevo ... which is a major health hazard for the local population."

"The frequency of such incidents in the country indicates that the mechanisms of environmental protection in Serbia are insufficient," said Hans Ola Urstad, the head of the OSCE mission in Belgrade.

Saturday, November 18, 2006

Stern takes some stick

One of the most distinguished economists working in the field of climate change has written a four page critique of the Stern report. Richard Tol, himself a contributor to past IPCC reports, is former Professor of Hamburg University and currently Senior Researcher in ESRI. Here's what he had to say:

The Stern Review of the Economics of Climate Change (Stern et al., 2006) is a report to the Prime Minister and the Chancellor of the Exchequer of the United Kingdom. A team of 23 people, led by Sir Nicholas Stern and supported by many consultants, worked for a little over a year to produce a report of some 700 pages on the economics of climate change. The report says many things, some better supported than others. In this comment, I focus on two conclusions. Firstly, the Stern Review argues that “the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever.” These are “risks of major disruption to economic and social activity, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century”. Secondly, the Stern Review argues that “the benefits of strong early action outweigh the costs”. This action would keep concentrations of greenhouse gases below 550 ppm CO2 equivalent.
Intriguingly, the 550 ppm CO2eq target coincides with climate change target adopted earlier by the UK government (RCEP, 2000). The Stern Review should therefore not be understood as a revision. Earlier, HM Treasury had released a report (Clarkson and Deyes, 2002) that justified the 550 ppm CO2eq target. The earlier report has been criticized for being out of step with the peer-reviewed literature (Pearce, 2003; Tol, 2005). For anyone familiar with the literature on the economic impacts of climate change (Smith et al., 2001) or the literature on cost-benefit analysis on climate change (Nordhaus, 1991), the headline conclusions of the Stern Review come as a surprise too: The Stern Review estimates are well outside the usual range. The Select Committee for Economic Affairs of the House of Lords (2005) had warned the UK government for being out of step with the economic literature on climate change – Pearce (2006) adds more detail. The Stern Review missed an opportunity to help align UK climate policy to this literature.
In this commentary, I review the impact estimates in the Stern Review and assess the cost-benefit analysis in that report before reaching a conclusion.

Economic impacts of climate change
Let us first examine the Stern Review conclusion that climate change will cause economic disruption now and forever. The “now and forever” is preposterous. The world economy is growing briskly; immediate threats to economic growth are imbalances in the US, overheating in China, and lack of reform in the EU. But the “forever” part is also problematic. It assumes that society will never get used to higher temperatures, changed rainfall patterns, or higher sea levels. This is a rather dim view of human ingenuity. It contradicts what we know about technological progress, adaptation, and evolution.
The Stern Review highlights several impacts of climate change. One is water. The work here is based on Arnell (2004). The Stern Review correctly that Arnell (2004) does “not include adaptation” and is therefore severely biased. Food is another highlighted impact. Climate change would hamper agricultural productivity in some parts of the world, particularly Africa. This would be a problem in today’s world. However, in all of the socio-economic scenarios used by the Stern Review, African economies would grow rapidly. This is inconsistent with famine. Middle-income countries would import food (global food production is not threatened by climate change) rather than starve. Furthermore, it is hard to imagine rapid economic growth without substantial improvements in agriculture productivity; at present, African agriculture is particularly inefficient. For health, the Stern Review makes the same mistake: It worries about people dieing of diarrhea and malaria, diseases that can be controlled at little expense. The Stern Review extrapolates the increase of damage due to weather-related natural disasters. It uses the estimates of Muir-Wood et al. (2006), ignoring the opposite (and peer-reviewed) conclusions by Pielke et al. (2005) and Pielke (2005). For water, agriculture, health and insurance, the Stern Review consistently selects the most pessimistic study in the literature. For refugees, the Myers and Kent (1995) are the highest, and the Stern Review duly highlight that “some estimates suggest that 150-200 million people may become permanently displaced”. Myers and Kent (1995) was not peer-reviewed. Norman Myers is a known alarmist. For sea level rise, the Stern Review only quotes the “millions at risk” from Nicholls and Tol (2005) – this metric ignores adaptation, which is very effective against sea level rise –note that Nicholls and Tol (2005) do report impact measures with adaptation too.
In the chapter on the impact of climate change on development, the Stern Review quotes the works of Nordhaus (2006) and Sachs (2001) – who find that a tropical climate negatively affects economic development. The Stern Review ignores the work of Acemoglu et al. (2001) and Easterly and Levine (2003), who argue that climate has at most a minor, indirect effect in the (distant) past – and the climate-change-specific studies of Fankhauser and Tol (2005) and Tol (forthcoming), who show that climate change will have a limited effect on development. In their poverty projections, the Stern Review mistakes the income-loss-equivalent-welfare-losses of the PAGE2002 with actual income losses.
The economic impact estimates of the Stern Review are in fact all based on a single integrated assessment model, PAGE2002 by Hope (2006). Although a single model makes for easy presentation, it also implies a lack of robustness. Integrated assessment models differ considerably in their representation of impacts (cf. Tol and Fankhauser, 1998). The PAGE2002 model stands out for two reasons. First, the model assumes that climate change impacts are necessarily negative (cf. Mendelsohn et al., 2000). Second, the model assumes that vulnerability to climate change is independent of development (Yohe and Tol, 2002). Both assumptions are at odds with the state of the art –and both assumptions imply that the impact estimates are overly pessimistic.

Cost-benefit analysis and emission reduction targets
The Stern Review overestimates the impacts of climate change, and therefore the benefits of emission reduction. Its estimates of the costs of emission reduction are largely inspired by the Innovation Modeling Comparison Project (Edenhofer et al., 2006; Grubb et al., 2006; Koehler et al., 2006), a group of models that make overly optimistic assumptions on technological progress and the costs of emission abatement (see Weyant, 2004, and van Vuuren et al., 2006, for more mainstream estimates). High benefits and low costs together imply that the Stern Review recommends more stringent emission reduction than the standard cost-benefit analysis (Azar and Lindgren, 2003; Keller et al., 2004, 2005; Maddison, 1995; Manne et al., 1995; Nordhaus, 1991, 1993, 1994; Nordhaus and Boyer, 2000; Nordhaus and Yang, 1996; Peck and Teisberg, 1992, 1994; Tol, 1997, 1999, 2001, 2002).
The Stern Review does not, in fact, present a formal cost-benefit analysis. Instead, it compares the magnitudes of the costs of abatement (around 1% of GDP) to the costs of climate change (5-20% of GDP) and concludes that the latter justifies the former. There are two mistakes here. Firstly, the costs of climate change do not equal the benefits of emission reduction – any abatement will only slow climate change rather than avoid it altogether – therefore, the benefits of emission reduction are smaller than the costs of climate change (Tol and Yohe, 2006). Secondly, marginal costs should be compared to marginal benefits, rather than total costs to total benefits. The Stern Review is silent on marginal abatement costs. It does report marginal damage costs though. For instance, it says “the mean value of the estimates in the study by Tol [2005] was about $29/tCO2” but omits that Tol (2005) concludes that “it is unlikely that the marginal damage costs of carbon dioxide emissions exceed $50/tC [$14/tCO2] and are likely to be substantially smaller than that.” The Stern Review does report that “the current social cost of carbon […] might be around $85/tCO2”, but it does not provide any more detail – except that this number is preliminary and results from PAGE2002 (Hope, 2006). $85/tCO2 equals $314/tC, and is therefore an outlier in the marginal damage cost literature (Tol, 2005).

In sum, the Stern Review is very selective in the studies it quotes on the impacts of climate change. The selection bias is not random, but emphasizes the most pessimistic studies. The discount rate used is lower than the official recommendations by HM Treasury. Results are occasionally misinterpreted. The report claims that a cost-benefit analysis was done, but none was carried out. The Stern Review can therefore be dismissed as alarmist and incompetent.
This is not to say that climate change is not a problem, nor that greenhouse gas emissions should not be reduced. There are sound arguments for emission reduction. However, unsound analyses like the Stern Review only provide fodder for those skeptical of climate change and climate policy.

Friday, November 17, 2006

Climate Change article: Sea level changes and tourism

A working paper called Economy-Wide Estimates of the Implications of Climate Change: A Joint Analysis for Sea Level Rise and Tourism by ANDREA BIGANO, FRANCESCO BOSELLO, ROBERTO ROSON and RICHARD S.J. TOL has just been released.

Climate change impacts on human life have well defined and different origins, nevertheless in the determination of their final effects, especially those involving social-economic responses, interactions among impacts are likely to play an important role. This paper is one of the first attempts to disentangle and highlight the role of these interactions. It focuses on the economic assessment of two specific climate change impacts: sea-level rise and changes in tourism flows. By using a CGE model the two impacts categories are first analyzed separately and then jointly. Comparing the results it is shown that, even though qualitatively joint effects follow the outcomes of the disjoint exercises, quantitatively impact interaction do play a significant role. Moreover it has been also possible to disentangle the relative contribution of each single impact category to the final result. In the case under scrutiny demand shocks induced by changes in tourism flows outweigh the supply side shock induced by the loss of coastal land.

The paper uses a modified CGE model. The conclusions suggest that while developing countries appear to lose the most land, Western Europe, Japan and Korea gain from increases in tourism.

As far as single impacts are concerned, the main outcome is that final effects on GDP are quite limited, unambiguously negative in the case of sea level rise, with slight gains for Western Europe, Japan and Korea, in the case of tourism. Distributional effects are more interesting. In the case of sea level rise, developing countries are the more penalized: higher dependence on land, difficulty in substituting the land lost with other production factors and capital outflows driven by reduced rate of returns explain the result. In the case of tourism, the
effects on regional economies are consistent with the shocks on tourism demand. This general pattern is reinforced by the changes in income flows used to capture the changes in expenditures of international tourists, which tend, for most variables, to overshadow the impact of general equilibrium adjustments. This notwithstanding, demand re-composition do play a role, and occasionally general equilibrium effects are large enough to result in regional impacts which contrast with the general pattern just described. Again, developing countries are more severely affected; in this case this is not due to the dependence from a vulnerable sector, but, more directly, to the magnitude of the negative shocks imposed on their economies.

Given the recent Stern report and headlines in the all the papers that we are all doomed unless we act now it still strikes me as rather odd that academic papers are being written stating, "don't worry about climate change as we will get more tourists to compensate".

How silver does a lining have to be to qualify?

Pollution and Health: New Chinese evidence

Regular readers will be aware that we include a large number of stories on China. The rapid growth of China and India are classic "globalisation and environment" case studies. A close examination of India would make a good PhD topic for anyone interested.

This article in PlanetArk should therefore not come as a surprise.

BEIJING - China's air pollution has caused a jump in chronic lung diseases usually associated with the elderly among people in their 30s, state media said on Thursday.

Sufferers of emphysema and chronic bronchitis were growing in number and getting younger, the Beijing News said, citing a health research report that said China had about 43 million chronic lung patients, of whom about 1 million die each year.

"Because of the worsening environmental pollution in cities, more people are getting the disease and the patients are younger," He Quanying, a hospital director who organised the research, was quoted as saying.

The report, which also blamed smoking for the rise in lung diseases, was based on studies of patients in 30 hospitals in China's six big cities, including the capital Beijing, financial hub Shanghai, industrial Shenyang and northwestern Xian, famous for its terracotta warriors.

Experts have blamed the pollution on China's helter-skelter pace of economic growth, which has resulted in increasing numbers of vehicles, power plants, factories and urban construction.

The government has launched several campaigns to improve air quality ahead of the 2008 Summer Olympics, but there have been no tangible results.

A closer examination of the impact of Chinese growth, and hence pollution, on health (in a similar style to some of the UK and US studies would be another excellent research topic).

Thursday, November 16, 2006

Efficiency verses Equity: Often in tension

The assessment set for my undergraduates asks them to imagine that they must advise the government on a number of different possible environmental policies (taxes, permits, subsidies etc.) not only in terms of efficiency but also in terms of equity (fairness).

This paragraph is from an excellent article "What We Learn When We Learn About Economics, by Christopher Hayes, These Times, November 2006".

A must read for any Economics student this story investigates the experience of studying neoclassical economics 101 at Chicago. A great read.

Back to efficiency and equity:
His [Alan Sanderson's] second lecture begins with a thought experiment. Noting that there are only 26 spots left in the class for the 52 students who would still like to enroll, he asks, “How should we figure out who gets to go into the class?” The students—eager, studious and serious—shoot their hands up and offer a variety of ideas: Seniority? First-come, first-serve? Ask prospective students to write an essay? It takes about a minute for a confident young man to give the answer Sanderson’s looking for: “auction by price.”

“As a reasonable indication of how much you want something, how much you’re willing to pay is a pretty good means of measuring,” Sanderson says. “A lot of things in economics will turn in one way or another on price. Price has a lot going for it as a generalized expression of commitment. ....”

This makes sense, but I’m uneasy. Wouldn’t giving a place in class to the highest bidder result in the rich students getting in and the financial-aid kids being left out? And since people don’t have equal amounts of money to spend, how good a measure of desire is price in this situation?

“Random and first-come have the benefit of being fair,” Sanderson says, anticipating the objection. “There’s an interesting dichotomy of fair vs. efficient.” But, Sanderson asks, what, really, is fair? If we think some kind of random lottery drawing was a fair way of getting into the class, would that be a fair way of awarding grades? “Obviously not!,” I think. Why? Sanderson lets us mull that over, but the answer floats up immediately: because I work hard for my grades and I deserve them....

“We’re trying to balance these things out,” Sanderson continues. “What’s efficient? What’s fair? Often they are in tension.”

Hat-tip Economist's View.

Manufactured Landscapes: "Globalisation and the Environment"

A perfect post for this blog. Hat-tip to Treehugger for the link to a new Canadian film called "Manufactured Landscapes - a feature documentary by Jennifer Baichwal".

Some of the pictures are breathtaking - the sheer size of the industrial development in China has to be seen to be believed.

MANUFACTURED LANDSCAPES is a feature length documentary on the world and work of renowned artist Edward Burtynsky. Burtynsky makes large-scale photographs of ‘manufactured landscapes’ – quarries, recycling yards, factories, mines, dams. He photographs civilization’s materials and debris, but in a way people describe as “stunning” or “beautiful,” and so raises all kinds of questions about ethics and aesthetics without trying to easily answer them.

The film follows Burtynsky to China as he travels the country photographing the evidence and effects of that country’s massive industrial revolution. Sites such as the Three Gorges Dam, which is bigger by 50% than any other dam in the world and displaced over a million people, factory floors over a kilometre long, and the breathtaking scale of Shanghai’s urban renewal are subjects for his lens and our motion picture camera.

Shot in Super-16mm film, Manufactured Landscapes extends the narrative streams of Burtynsky’s photographs, allowing us to meditate on our profound impact on the planet and witness both the epicentres of industrial endeavour and the dumping grounds of its waste. What makes the photographs so powerful is his refusal in them to be didactic. We are all implicated here, they tell us: there are no easy answers. The film continues this approach of presenting complexity, without trying to reach simplistic judgements or reductive resolutions. In the process, it tries to shift our consciousness about the world and the way we live in it.

Check out the trailer. Not sure if this film will get a UK release but someone should try.

This is what treehugger had to say about the film, a sentiment that relates to my previous post on the problem of the West dictating to developing countries to "clean up" when such a large percentage of the population still lives below the poverty line.
It is an intensely political movie and you come out shocked to the core. You wonder what the point is in doing anything to mitigate climate change when you see those piles of coal, those endless seas of high-rises with an air conditioner in every window.

It never rains, it pours: Acid is back

Although this news story has been deliberately planted to "cause a stir" I could not let it go without at least one quote. The idea is to deliberately inject large quantities of sulphates into the atmosphere to "draw the shades" and prevent global warming.

The ENN story is called:

"Top Scientists Say Man May Need to Dirty Skies to Shield against Warming"

Pinatubo [A volcano] poured so much sulfurous debris into the stratosphere that it is believed it cooled the Earth by 0.5 degrees Celsius (0.9 degrees Fahrenheit) for about a year.

Wigley ran scenarios of stratospheric sulfate injection -- on the scale of Pinatubo's estimated 10 million tons of sulfur -- through supercomputer models of the climate, and reported that Crutzen's idea would, indeed, seem to work. Even half that amount per year would help, he wrote.

A massive dissemination of pollutants would be needed every year or two, as the sulfates precipitate from the atmosphere in acid rain.

So that's all right then. If you live in the UK, where it often appears to rain all year round, such a plan may need a little more spin before the average UK citizen will sign-up. I also expect a lot of Swedish fish will be more than a little worried.

Wednesday, November 15, 2006

The development dilemma: social or environmental goals? No contest.

For all the lip-service that Western governments make to the new vote winner "climate change" calling on the world to pull together to save the planet one should always be aware of the trade-offs faced by the governments of developing countries.

As reported by Reason a recent panel discussion on climate change at the Centre for European Policy Studies included a contribution by Surya P. Sethi, the principal energy policy advisor to the Indian government.

Whenever Western politicians, in their air conditioned offices, pontificate about using energy saving light bulbs it should be remembered that no government of a rapidly developing country is ever going to sacrifice a fall in the infant mortality rate, a rise in life expectancy and a fall in the percentage of those living in absolute poverty just to reduce emissions of a pollutant with little or no local impact.

The following paragraphs provide food for thought. All "environmentalists" should put themselves in the position of Surya Sethi or indeed a local Indian trying to feed a family.
Next, Surya P. Sethi, the principal energy policy advisor to the Indian government, showed that the CEPS study is basically an exercise in climate change policy whimsy. Sethi began by reviewing the development challenges faced by India. He pointed out that 50 percent of its people have no access to electricity; cooking was the largest use of energy for 75 percent of households; and 70 percent of cooking was done using traditional biomass, wood and dung. In addition, 35 percent of India's people live on less than $1 per day and 80 percent live on less than $2 per day. He pointed out that lack of access to modern energy supplies correlates with high infant mortality, low life expectancies, high gender inequality, and low literacy rates.

Sethi then noted that India's economy must grow at 8 percent per year for the next 25 years in order to lift the bottom 40 percent of its people to a decent standard of living. He pointed out that India was falling behind in achieving it Millennium Development Goals of reducing poverty due to persistent energy shortages. "Energy is central for development. Our energy consumption must go up," declared Sethi. Today India uses 471 million tons oil equivalent (MTOE) of energy each year of which 327 MTOE is primary commercial energy. The rest comes from burning traditional biomass. In order to achieve its poverty reduction goals, Sethi asserted that India needs to grow its energy supplies by 4.3 to 5.1 percent per year and to consume 1536 to 1887 MTOE by 2031. (For comparison the US consumes around 2300 MTOE annually now.) "India will need to tap all available energy supplies and pursue all available energy efficiency technologies. For India it is not a choice between energy supply and energy efficiency. It is both." said Sethi.

Sethi contrasted India's current total primary energy supply (TPES) per capita energy use with other countries. TPES per capita is calculated as the energy equivalent of the amount of oil in kilograms (kgoe) a person consumes per year. In China the amount is 1090 kgoe, Brazil 1094, Denmark 3852, UK 3906, US 7835, Japan 4052, and the world average per capita energy use is 1688. Where does India stand? The average Indian consumes the equivalent of 439 kilograms of oil. The eight percent annual economic growth that Sethi hopes India will experience over the quarter century would mean that the average Indian would be consuming between 1065 and 1279 kgoe in 2031. That's about what the average Chinese uses now and is only 70 percent of world's current per capita average.

Sethi said that India could cut projected CO2 emissions between 2012 and 2017 by 550 million tons at an additional cost of $25 billion for more energy efficient technologies. However, he pointed out that the Indian government spent that amount on its social and poverty reduction goals in the last five years. He then pointedly added, "I do not have the funds for both. My choice is to improve the lot of India's poor or reduce CO2 emissions so the developed world can breathe easier." Paying for the new energy efficiency technologies would also raise the price of power and thereby delay its delivery to the poor. Besides, Sethi observed, Indians already pay the highest rate in purchasing power parity terms for energy in the world. In fact, the average household spends one and a half times more on energy than it does on food. Finally, Sethi told me that even after implementing the most efficient energy conservation technologies over the next 25 years, India will still be emitting 4 times more CO2 in 2031 than it does today.

Predictable news of the day: US is 53/56 for climate change

In a surprise league table of those countries that are doing the most to tackle climate changes comes the news that Sweden is top and US is 53 (out of 56). The UK comes a very creditable second

PlanetSave provides the full story.

Sweden tops climate change efforts, U.S. near bottom, environmentalists say

NAIROBI, Kenya (AP) _ Sweden, Britain and Denmark are doing the most to protect against climate change, but their efforts are not nearly enough, according to a report released Monday by environmental groups.

The United States _ the world's biggest emitter of greenhouse gases _ ranked at 53, with only China, Malaysia and Saudi Arabia doing worse.

Tuesday, November 14, 2006

"I'm a Green Celebrity": Get out of here...

At last the UK's relative "Greeness" has been explained - we have some millionaire celebrities who champion various environmentally friendly causes. This new evidence ties in nicely with the new series of "I'm a celebrity, get me out of here" that has just started on ITV where ten so-called celebrities live in a jungle for a few weeks eating bugs and crawling around tunnels filled with spiders, rats and toads. Perhaps the most internationally well known is David Gest whose profile states:

He has an extensive career in the merciless music industry, has had his life paraded before the public by many a tabloid and is a close confidante to the one and only Michael Jackson.

But is all this enough to prepare David Gest for a Bush Tucker Trial?

What the hell, he's keen for a holiday!

"I'm going on this vacation because it's what I've always wanted in my life," he revealed before bopping his way onto the Boeing 747.

But whilst David may have enviable connections in the showbiz world, he'll have no one to call on when forced to swap costly crockery for crazed crocodiles, and mouth-watering caviar for kangaroo testicles.

And then there's the lack of silver service. . .

"How am I gonna cope without a maid?" he exclaimed when we pointed all this out.

"There's gotta be someone there that needs a job and some extra money!"

I suspect this is not the type of celebrity the article is referring to:

From the Green Consumer Guide comes the article "Celebs behind green changes, says study".

The UK’s celebrities are one of the major reasons behind a public shift towards environmentally-friendly behaviour in Britain, a newly published study has claimed. The report, commissioned on behalf of recycled toilet tissue producer Nouvelle, found that increasing public awareness on green topics coincides with a growing number of celebrities backing eco-friendly ventures.

The study, conducted by ICM Omnibus, asked respondents to rate themselves on their green consumer activities and compare it to ten years ago. Of those polled, 73% claimed to be ‘passionate or concerned’ about the environment, compared to 45% a decade ago. Just 5% said that they were unconcerned about green issues – a stance backed by celebrity Jeremy Clarkson, according to the study.

Celebrities such as Sting, Bono and Davina McCall were cited in the report as pro-environment role models.

“Today’s celebrity-driven culture is a driving force behind the change in attitudes,” said Christine Clarke, Marketing Director for Nouvelle. “Focus groups have shown us that role model celebrities such as Bono and Jamie Oliver are key in changing consumer behaviour.”

“We are surprised by the rate of change amongst consumers,” added Christine Clarke. “It has accelerated since the environment has been taken up as a ‘fashionable’ cause. Influential personalities such as Davina McCall are putting environmental issues on the map and making them part of everyday life.”

Whilst the cynic might argue that very wealthy rich celebrities can afford to be green anything that can help to "educate" is surely good news. I suppose there may still be a small role left for academics and governments. Now I had better get back to watching reality TV.

An end to deforestation?

A new study examining the extent of global forest stocks claims to provide some scope for optimism. By measuring timber volumes, biomass and captured carbon, not just the land area covered by trees, the study provides a deeper understanding of forest stocks and finds these indicators to be growing in many of the countries considered. The study claims this to be good news from the point of view of climate change.

However, what the map above actually reveals is that developed countries have increasing forest stock, largely due to plantations, whereas the developing regions, which contain tropical rainforest, have declining forest stocks. Unfortunately, it has been known for some time that forest land area was increasing in the developed world but declining elsewhere. It seems the same pattern emerges even when other aspects of forest stocks are considered.

From the point of view of carbon capture it may be good news that some countries have increasing forest stocks, but from the point of view of biodiversity the above distinction between developed and developing countries is anything but good news. Forest cover in the developed world is often mono-culture plantations which are rather sterile in biodiversity terms. Whereas the tropical rainforests, which are still declining, are teeming with life and have a greater density of biodoversity than anywhere on the planet.

But the study's main scope for optimism comes from the claim that countries appear to 'grow out' of deforestation. By plotting changes in forest cover against per capita income the study claims to find evidence of an inverted-U shaped relationship with increasing forest stocks in all countries with per capita incomes greater than $4,600. Such an analysis is extremely simplistic and the conclusions the authors come to should be treated with a great deal of caution. Firstly, the small number of observations mean it is not possible to control for all of the other variables that influence forest stocks. Secondly, there would only be scope for optimism if the positive aforestation in the developed world were equivalent in quality to the lost forest stocks in the developing world. That is, we should be talking about the same 'good' over the entire range of the inverted-U relationship. Unfortunately we are not. We are replacing biodiversity rich natural forest cover with sterile pine plantations. Good news for carbon capture (maybe) but bad new for species diversity.

No doubt this study enriches our knowledge of global forest stocks and is very worthy in that sense. But the scope for optimism seems rather overstated and risks sending the wrong message to those countries looking for an excuse to relax the protection of their forests.

Monday, November 13, 2006

How much is a newt worth?

The Highways Agency has pledged to spend £300,000 on capturing and relocating a colony of great crested newts caught up in a roadbuilding project. The scheme promises to save the lives of 15 newts at a cost of £20,000 each. Even to many enviromentalists this seems like a ridiculous waste of money. Furthermore, there appears to be 100,000 such newts in existence. Does the Highways Agency believe that the entire great crested newt population is worth £2 billion? This is a situation in which asking people about their willingness to pay for preserving species would have been useful. For the record the Department of Health refuses to fund life saving drugs if the cost per year of life gained exceeeds £10,000. Here's how the story was reported in the Guardian newpaper:

A rare species of newt won a victory for small amphibians yesterday as highway bosses defended their decision to spend hundreds of thousands of pounds on a relocation scheme.
The Highways Agency has pledged more than £300,000 on capturing a colony of great crested newts that have been caught up in a roadbuilding project.

The newts, which are a protected species, have been trapped and relocated to make way for a £51m junction improvement project on the A5117 in Cheshire.

Officials at the agency said a number of newts had been captured so far, but refused to confirm reports that only 15 of the animals had been trapped in total.

A spokesman for the Highways Agency said: "The work is currently ongoing and a number of great crested newts have been trapped."

He added: "It is not possible to give a final figure because the work is still under way.

"We have a duty to ensure newts are protected and moved to the safety of nearby ponds so as to prevent them from being harmed during the construction of the road scheme."

The money has been spent on installing 15 miles of special fencing near the Deeside Park junction to trap the newts.

They are then relocated to the safety of nearby ponds.

Dorothy Wright, an expert on newts from the Herpetological Conservation Trust, said: "When a lot of money is spent and only a few newts are saved, it would be great if that money could have been spent to increase the viability of local populations."

The latest figures suggest that there are only around 100,000 great crested newts left in the United Kingdom, with the population falling by around 20% over the past 50 years.

The newts, which are a protected species under European legislation, breed in ponds but spend part of their life cycle on the land.

Sunday, November 12, 2006

Is Carbon Trading really an "Obscenity"?

Kevin Smith in a BBC Green Room article agrues that Carbon Trading is inherently flawed. The economics of this article need to be carefully considered.

We are linking pollution haven type arguments (that developing countries have a "lower price" for pollution) and the workings of the Carbon Trading scheme and other market based solutions - could it be that these market based solutions are not so efficient after all - who wins and who loses? Are they vunerable to "capture"?

It boils down to the question of whether "free market environmentalism" is: working; is failing; could work eventually; is better than any alternative suggestion.

Undergraduates should try to pick out the "pros and cons of different public policies". Perhaps equity issues need to be considered as well as pure efficiency arguments.

Some interesting quotes are included below or read the full article by clicking:

'Obscenity' of carbon trading

If we want to curb climate change, carbon trading won't do, argues Kevin Smith in the Green Room this week. From the Stern Review to Europe's Emissions Trading Scheme, he argues, the aim of reducing emissions has been perverted by neo-liberal dogma and corporate self-interest.

In 1992, an infamous leaked memo from Lawrence Summers, who was at the time Chief Economist of the World Bank, stated that "the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable, and we should face up to that".

Sir Nicholas Stern argues that the cost-effectiveness of making emissions reductions is the most important factor, advocating mechanisms such as carbon pricing and carbon trading.

While dumping toxic waste in the global South might look like a great idea from the perspective of the market, it ignores the glaringly obvious fact of it being hugely unfair on those getting dumped upon.

In a similar way, Stern's cost-benefit analysis reduces important debates about the complex issue of climate change down to a discussion about numbers and graphs that ignores unquantifiable variables such as human lives lost, species extinction and widespread social upheaval.

In the current neo-liberal economic environment, trading rules inevitably succumb to the pressures of corporate lobbying and deregulation in order to ensure that governments do not "interfere" with the smooth running of the market.

We have already seen this corrosive influence in the European Union's Emissions Trading Scheme (ETS), when under corporate pressure, governments massively over-allocated emissions permits to the heaviest polluting industries in the initial round.

This caused the price of carbon to drop by more than 60%, creating even more disincentive for industries to lower their emissions at source.

There are all manner of loopholes and incentives for industry to exaggerate their emissions in order to receive more permits and thereby take even less action.

Market analyst Franck Schuttellar estimated that in the scheme's first year, the UK's most polluting industries earned collectively £940m ($1,792m) in windfall profits from generous ETS allocations.

Given all we know about the link between pollution and climate change, such a massive public concession to dirty industries borders on the obscene.

We are being asked to believe that the flexibility and efficiency of the market will ensure that carbon is reduced as quickly and as effectively as possible, when experience has shown that lack of firm regulation tends to create environmental problems rather than solve them.

There is a groundswell of opinion that the "invisible hand" of the market is not the most effective way of facing the climate challenge.

The Durban Declaration of Climate Justice, signed by civil society organisations from all over the world, asserts that making carbon a commodity represents a large-scale privatisation of the Earth's carbon cycling capacity, with the atmospheric pie having been carved-up and handed over to the biggest polluters.

Effective action on climate change involves demanding, adopting and supporting policies that reduce emissions at source as opposed to offsetting or trading.

Carbon trading isn't an effective response; emissions have to be reduced across the board without elaborate get-out clauses for the biggest polluters.

There is an urgent need for stricter regulation, oversight, and penalties for polluters on community, local, national and international levels, as well as support for communities adversely impacted by climate change. But currently such policies are nigh-on invisible, as they contradict the sacred cows of economic growth and the free market.

There is, unfortunately, no "win-win solution" when it comes to tackling climate change and maintaining an economic growth based on the ever increasing extraction and consumption of fossil fuels.

Market-based mechanisms such as carbon trading are an elaborate shell-game of global creative accountancy that distracts us from the fact that there is no viable "business as usual" scenario.

Climate policy needs to be made of sterner stuff.

The cost of rising sea levels

A new study has suggested that perhaps the most severe impact of climate change will be rising sea levels. The report, by a team of German scientists, paints a rather gloomy picture of mass migration from low-lying areas and even recommends that countries should begin preparations now for a managed retreat. To an extent it would seem this is already happening;

The low-lying Pacific island nation of Tuvalu has already agreed a deal for New Zealand to take about half its 10,000 people to work in agriculture if it becomes swamped by rising sea levels.

The economic cost of sea level rises has always been difficult to quantify in studies such as the recent Stern report. The typical method has been to simply calculate the market price of the land that would be lost. In all reality this is likely to be a significant underestimate of the true cost given the likelihood of major migration, loss of livelihood and general adjustment costs. Furthermore, the unsavoury implication of using the market price method is that land in developed countries will have a much greater value than land in developing countries. This implies that the cost of sea level rises will be greater in developed countries and hence so too will be the justified expenditure to prevent such rises. Who is going to spend the vast sums of money needed to prevent the loss of 'cheap' land in Bangladesh for instance?

Thursday, November 09, 2006

Wages, Pollution and Worker Safety Regulation

Having recently presented our paper "Cole, M.A., Elliott, R.J.R. and Lindley, J. (2006). Dirty Money: Is there a Wage Premium for Working in a Pollution Intensive Industry? [Abstract] to a group of economists from the ONS and Health and Safety Executive we are always looking for real world examples to provide a little "real world" relevance.

Thanks for the Environmental-Economics guys for the hat-tip. I went to source as the Britney Spears stuff threw me.

Thus, from the Washington post comes an article "One Chemical at a Time" that discusses how:
An industry association, a labor union and a public health group recently settled a court case over a new standard for worker exposure to a cancer-causing chemical, hexavalent chromium. It was a rare example of agreement in worker-safety regulation.

More significantly, there is no sign that the single agreement will cure the paralysis that for years has crippled the process for setting "permissible exposure limits" for chemicals in the workplace.

Exposure limits for some 400 chemicals were set when OSHA was set up in 1971. Only about 20 have been reviewed and revised since, according to the agency. In some cases, including hexavalent chromium, the science underlying the rule hasn't been updated since the 1920s.

The American Industrial Hygiene Association , in a 2002 study of the problem, called it "a disservice to worker health that the majority of OSHA permissible exposure limits are based on recommendations that were made almost 30 years ago."

This means hundreds of companies operating in the shipyard, construction and chemical industries have only to adhere to woefully outdated standards for protecting workers from harmful chemical exposure.

In 1988, OSHA proposed a wholesale upgrade of 212 of the existing standards, as well as an additional 164 exposure limits for substances that never had been regulated. Industry groups sued, claiming the proposals were too stringent; the AFL-CIO sued, saying some weren't strong enough and monitoring plans were weak.

In our paper we ask - do workers in industries where exposure levels are the highest receive a wage premium for the additional health risks they are taking? You would hope so - suffice to say, there are many complications to what should be a simple story that means that in reality this may be far from the case.

Memo to self - use in the introduction to this paper.