Tuesday, January 29, 2008

"Post of the day" for fisheries

Spending hours a day reading about the over exploitation of fish means I apologise if there is a excess of fishy stories.

This is a good one though - UK chefs to stop serving over exploited fish. Will there be anything on the menu?

UK Chefs and Greenpeace Bid to Save Threatened Fish

LONDON - Leading British chefs will join forces with environment group Greenpeace on Wednesday in a campaign to push restaurants to serve up only species of fish that have not been over exploited

Greenpeace goes straight for the jugular:

"No one wants to see some of our fishy favourites disappear from dinner plates. But, unless we only use seafood that has been caught in a sustainable manner, then this is a situation we could see very soon," said Sarah Shoraka from Greenpeace.

Wefinsih with the standard dig at China for the Chinese wanting to eat enough to survive:
It noted that fish consumption in China had increased demand 10-fold since 1961 and that fish now supplied 30 percent of demand for protein in Asia against six percent globally.


Brazil calls in the Army to prevent deforestation

It has been evident for a while that for all the recent publicity about carbon sinks,climate change and tree planting, that the economic realities on the ground for thousands of impoverished Brazilians would hold sway.

It is interesting to see that part of the blame for the increased rate of deforestation can be laid squarely at "economics'" door.

Surely no one canbe surprised by the lastest deforestation figures:

Brazil's Army to Help Combat Amazon Destruction [PlanetArk]

Brazilian officials said Amazon destruction had surged during the last five months of 2007. Deforestation rose from 94 square miles (243 sq km) in August to 366 square miles (948 sq km) in December.

The more interesting development is to attempt to link deforestion to the actual economic causes. Now, in theory, the large US and other multinationals will be bought to book:
Additionally, companies like trading houses, soybean crushers and meat processors that buy commodities originating from destroyed areas of the forest will be considered responsible for deforestation.

So why is economics to blame?
Environment Minister Marina Silva said the recent rise in commodity prices may have contributed to the stepped-up pace of deforestation.

Some final sobering statistics:
From August to December last year, 1,250 square miles (3,235 sq km) of the Amazon forest, known as "the lungs of the world" for its ability to consume greenhouse gases and produce oxygen, were destroyed, according to the government.

This figure is expected to double when higher resolution satellite images are analyzed.


Health impact of climate change

A recent report highlights the impact on global health of climate change.

The old "Malaria" spreading story needs to be looked at very carefully given that it is a treatable disease. More interesting is the link between poverty and climate instability.

Climate Change to Hit Health Above Economy - Study [PlanetArk]

But McMichael said climate shift would bring changes to the pattern of infectious diseases, the effect of worsening food yields and loss of people's livelihoods. While it was unlikely to spawn entirely new types of diseases, it would impact on the frequency, range and season patterns of many existing disorders, with between 20 and 70 million more people living in malarial regions by 2080, he said.

And the impact would be hardest in poor countries, said the researchers, including co-author Sharon Friel from the Australian National University, Tony Nyong from Nigeria's Jos University and Carlos Corvalan of the World Health Organization.

"Infectious diseases cannot be stabilised in circumstances of climatic instability, refugee flows and impoverishment," McMichael said. "Poverty cannot be eliminated while environmental degradation exacerbates malnutrition, disease and injury."


Monday, January 28, 2008

Tragedy of the Commons and Fisheries: An empirical study

Although it is too late for my 211 students and their assessed work, I have just come across an excellent working paper by Stephanie McWhinnie.

The title of the paper is:

The Tragedy of the Commons in International Fisheries: An Empirical Examination[PDF]

Historically, all capture fisheries have proven hard to manage; internationally shared stocks face an additional impediment to effective management. Previous fisheries studies estimate gains from cooperation for particular species or locations, but evidence is lacking on the wider effect that international sharing has in relation to other variables that affect stock status. This paper is an attempt to shed a broader light on the effect of sharing by identifying whether shared fish stocks are systematically more exploited. I compile exploitation status, biological and economic data into a unique two-period panel of more than two-hundred fish stocks from around the globe with which I test the theoretical implications of sharing. The empirical results from ordered category estimation suggest that shared stocks are indeed more prone to overexploitation.


Thursday, January 24, 2008

IPCC member articles for free from Elsevier

From the inbox:

Click the links for the free access (too lazy to add the live links here).


We are also proud to announce that many Elsevier Editors and Editorial Board members have served significant roles as authors and reviewers for the 2007 and three previous IPCC reports conducted since 1990. Rajendra Pachauri, Chair of the IPCC, is an Editorial Board Member of Energy Policy and an Associate Editor for the Encylopedia of Energy. View Dr. Pachauri's Nobel Prize Acceptance Speech.

In recognition of the importance of the work of the IPCC, we are pleased to offer free access to selected articles on climate change written by members of the IPCC and published by Elsevier:

IPCC articles.

Articles regarding the IPCC

IPCC Warns of Dire Climate Change Consequences The New Scientist Volume 196, Issue 2631, 24 November 2007, Page 13 Fred Pierce

Working Group 1 Report of the IPCC Fourth Assessment - An Editorial Global Environmental Change, In Press, Corrected Proof, Available online 27 September 2007
Will Steffen

The Changing Role of Nation States in International Environmental Assessments - The Case of the IPCC Global Environmental Change, Volume 13, Issue 2, July 2003
Bernd Siebenhüner

Articles by members of the IPC

Improving Information for Managing an Uncertain Future Climate Global Environmental Change, Volume 17, Issue 1, February 2007 Richard H. Moss

Climate and Humanity Global Environmental Change Part A, Volume 14, Issue 2, July 2004 R.K. Pachauri

Effects of Climate Change on Global Food Production Under SRES Emissions and Socio-Economic Scenarios Global Environmental Change, Volume 14, Issue 1, April 2004
M.L. Parry, C. Rosenzweig, A. Iglesias, M. Livermore and G. Fischer

Linkages Between Climate Change and Sustainable Development Climate Policy, Volume 2, Issues 2-3, September 2002 Rovere, Jyoti K. Parikh, Kirit Parikh and A. Atiq Rahman

Millions at Risk: Defining Critical Climate Change Threats and Targets Global Environmental Change, Volume 11, Issue 3, October 2001 Martin Parry, Nigel Arnell, Tony McMichael, Robert Nicholls, Pim Martens, Sari Kovats, Matthew Livermore, Cynthia Rosenzweig, Ana Iglesias and Gunther Fischer

Climate Change and World Food Security: A New Assessment Global Environmental Change, Volume 9, Supplement 1, October 1999 Martin Parry, Cynthia Rosenzweig, Ana Iglesias, Günther Fischer and Matthew Livermore

Role of Energy Production in the Control of Greenhouse Gas Emissions from Waste Management Energy Conversion and Management, Volume 37, Issues 6-8, June-August 1996
R. Pipatti and I. Savolainen

Global Net Primary Production: Combining Ecology and Remote Sensing Remote Sensing of Environment, Volume 51, Issue 1, January 1995 Christopher B. Field, James T. Randerson and Carolyn M. Malmström

Making Economic Growth More Sustainable Ecological Economics, Volume 15, Issue 2, November 1995 Mohan Munasinghe

The Climate Convention and the Latest Scientific Understanding of Climate Change
Renewable Energy, Volume 5, Issues 1-4, August 1994 Sir John Houghton

Environmental Issues and Economic Decisions in Developing Countries World Development, Volume 21, Issue 11, November 1993 Mohan Munasinghe

Man the Green Barricades: Trade War over Carbon

There is nothing this blog likes to see more than a news piece that combines international trade and environmental economics in one, short, story.

Now we are really talking "Globalisation and the environment".

There is already an established literature in economics that examines the question of whether "environmental regulations act as trade barriers". Ederington and Minier in the CJE is a good starting point.

Warning of trade war over carbon import taxes [FT]

Plans to force importers to pay the same greenhouse gas emission charges as domestic producers could provoke a trade war of retaliation and litigation, officials and lawyers have warned.

The plans, being considered by the US Senate and floated by the European Commission, are intended to prevent production shifting to laxer regimes abroad after countries impose carbon controls. But although supporters argue they will comply with the General Agreement on Tariffs and Trade (Gatt), the treaty that underlies the World Trade Organisation, officials and lawyers say that affected countries such as China and India are likely to resort to litigation or retaliation.

Ujal Singh Bhatia, India's ambassador to the WTO, said: "If the countries imposing such measures invoke Gatt provisions to justify them, the dispute settlement mechanism in [the] WTO would face serious challenges and create divisions along North-South lines."

Lawyers said that although the measures might be made compatible with WTO rules, it is likely there would be years of uncertainty and conflict. Greg Mastel, adviser at the law firm Akin Gump, said: "Meeting the standards for compliance will be hard, and this is a high-stakes case." Settling this through litigation "could put a lot of strain on the [WTO] system".

Mr Bhatia warned against hasty action. "Even within the EU and the US the discussion has only recently begun and there appears to be no consensus as yet," he said. "Unilateral measures at this stage would create contentiousness and lead to charges of protectionism."

A much longer and indepth FT article appears in today's issue. Essential reading.

Green barricade [FT]

Traditionally, many trade officials, particularly from developing countries, have been suspicious that environmental provisions in trade agreements are covert protectionism by rich nations. Sure enough, several wealthy countries are mulling taxing imports to take account of greenhouse gases emitted during their manufacture. The plans are in their early stages, but they may at the very least serve as a negotiating tactic to get reluctant countries to agree to control emissions themselves.

Environmentalists and companies in energy-intensive sectors say that by adopting carbon taxes or quotas without requiring that others do the same, economies such as Europe's merely encourage freeriding and "carbon leakage" - carbon emissions rising as industries decamp to less regulated countries. They have argued for the playing field to be levelled by levying a "carbon border tax" - a tariff that taxes imports from unregulated countries as though the foreign companies that made them were domestic businesses.

Two separate bills being considered by the US Senate would combine a new national cap-and-trade system for carbon emissions with charges on imports from countries that do not tax carbon, by requiring them either to buy US or equivalent emission credits - in effect a border tax - or pay a fee. The proposal had substantial input from American Electric Power, one of the US's largest electric utilities, and the International Brotherhood of Electrical Workers (IBEW), which represents many power employees. The latter in particular is a familiar opponent of liberalisation that has lobbied against the US signing bilateral trade deals and setting up guest-worker programmes for immigrants.

Although the European Commission opposed the adoption of a direct border tax in this week's proposals for the EU's carbon emission regime, it floated the same idea of requiring importers to buy credits in the future. Carbon equalisation measures have been repeatedly demanded by France, traditionally one of the most trade-sceptical EU member states, while European parliamentarians called for a "Kyoto carbon tax" to be imposed on imports from the US after it failed to join the international emissions protocol (see chart).

"Fighting" Climate Change

Pointless research report of the week award goes to the report that tells us that the armed forces will have more to do once the effects of climate change really start kicking in. Given the potential migration of millions, regional water shortages, regional food shortages, floods and the potential for widespread social unrest this should come as little surprise.

Armed Forces Face Strain of Climate Change - Report [PlanetArk]

LONDON - Security forces round the world will face tough new challenges as climate change unleashes violent storms, raises sea levels and causes floods and famines, a new report said on Thursday.

Of more interest is whether we believe the eco-terrorism should rank so highly as a threat compared to the other potential disasters.
While climate-related events will put new strains on the security services, governments' responses to global warming could give rise to militant environmental groups using terror tactics to make their points, the report said.

"In the US, the FBI ... currently consider 'eco-terrorism' to be one of the most serious domestic terrorism threats," the report said, noting an upsurge in violent rhetoric among a small group of environmental extremists.

I suspect there are far bigger fish to fry that this one.

Tuesday, January 22, 2008

Disastrous environmental, economic and human consequences of often illegal industrial fishing

A long title taken from yesterday's NYTimes article. I post this as I am in the middle of marking 140 2000 words essays on the economics of fisheries so to read something that is not related to my lecture notes is a relief.

Amusing to see the US giving the EU and others an environmental kicking for once. Is this justified?

Until All the Fish Are Gone [NYtimes]

Scientists have been warning for years that overfishing is degrading the health of the oceans and destroying the fish species on which much of humanity depends for jobs and food. Even so, it would be hard to frame the problem more dramatically than two recent articles in The Times detailing the disastrous environmental, economic and human consequences of often illegal industrial fishing.

Sharon LaFraniere showed how mechanized fishing fleets from the European Union and nations like China and Russia — usually with the complicity of local governments — have nearly picked clean the oceans off Senegal and other northwest African countries. This has ruined coastal economies and added to the surge of suddenly unemployed migrants who brave the high seas in wooden boats seeking a new life in Europe, where they are often not welcome.

The second article, by Elisabeth Rosenthal, focused on Europe’s insatiable appetite for fish — it is now the world’s largest consumer. Having overfished its own waters of popular species like tuna, swordfish and cod, Europe now imports 60 percent of what it consumes. Of that, up to half is contraband, fish caught and shipped in violation of government quotas and treaties.

The industry, meanwhile, is organized to evade serious regulation. Big factory ships from places like Europe, China, Korea and Japan stay at sea for years at a time — fueling, changing crews, unloading their catch on refrigerated vessels. The catch then enters European markets through the Canary Islands and other ports where inspection is minimal. After that, retailers and consumers neither ask nor care where the fish came from, or whether, years from now, there will be any fish at all.

From time to time, international bodies try to do something to slow overfishing. The United Nations banned huge drift nets in the 1990s, and recently asked its members to halt bottom trawling, a particularly ruthless form of industrial fishing, on the high seas. Last fall, the European Union banned fishing for bluefin tuna in the eastern Atlantic and Mediterranean, where bluefin have been decimated.

The institution with the most potential leverage is the World Trade Organization. Most of the world’s fishing fleets receive heavy government subsidies for boat building, equipment and fuel, America’s fleet less so than others. Without these subsidies, which amount to about $35 billion annually, fleets would shrink in size and many destructive practices like bottom trawling would become uneconomic.

The W.T.O. has never had a reputation for environmental zeal. But knowing that healthy fisheries are important to world trade and development, the group has begun negotiating new trade rules aimed at reducing subsidies. It produced a promising draft in late November, but there is no fixed schedule for a final agreement.

The world needs such an agreement, and soon. Many fish species may soon be so depleted that they will no longer be able to reproduce themselves. As 125 of the world’s most respected scientists warned in a letter to the W.T.O. last year, the world is at a crossroads. One road leads to tremendously diminished marine life. The other leads to oceans again teeming with abundance. The W.T.O. can help choose the right one.


Grandfather for the chop?: Permits to be auctioned in the EU

As all env-econ students will be aware (I hope), one criticism of tradable permits is that those who have historically polluted the most get given for free permits which they can then sell (assuming they reduce pollution). This system is known as grandfathering.

There has been increasing concern in the EU with the massive windfall profits being received by the most polluting firms which does not sit well with your average green protester.

Of course, the lobby groups are already pleading the "competitive" case whereby this new system will systematically undermine the competitiveness of EU industry in the newly globalised world. Inevitable.

Also inevitable is the "US dismay" headline. I suspect the US is nothing but dismayed whenever climate related issues hit the headlines.

From 2012 the EU has an alternative proposal.

EU's Barroso Says Pollution Permits to be Auctioned [PlanetArk]

LONDON - The European Commission will propose this week auctioning permits to emit greenhouse gases after 2012 in a package of measures to fight climate change, despite protests from business, its chief said on Monday.

"Allowances will be auctioned, with revenues going to member states, but any EU company will be allowed to buy allowances in any member state," Commission President Jose Manuel Barroso said in a speech prepared for delivery at investment bank Lehman Brothers in London.

His remarks confirmed predictions by European Union sources that the EU executive plans to force firms to buy at least some pollution permits, rather than receiving them for free as they do now under a scheme that has handed out windfall profits.

Barroso said implementing the EU's entire green energy plan will cost about 0.5 percent of gross domestic product a year, equivalent to about 60 billion euros (US$86.87 billion).

EU sources have said about 20 percent of permits to emit carbon dioxide (CO2) -- the main gas blamed for global warming -- are to be auctioned in 2013, fewer than Brussels originally envisaged, rising to 100 percent in 2020.

Europe's top business lobby, BusinessEurope, attacked the plan last week, saying that auctioning permits could hurt European industry in global competition.

Barroso also confirmed that energy-intensive industries might be given an easier regime for greenhouse gas emissions.

"In the case of need ... we should also be ready to continue to give the energy intensive industries their ETS (emissions trading scheme) allowances free of charge," he said.

The Commission might also "require importers to obtain allowances alongside European competitors, as long as such a system is compatible with World Trade Organisation requirements," Barroso said.


EU sources say the Commission will review the impact on energy-intensive industries and possible support measures in 2011 in the light of whether there is an international agreement to curb greenhouse gas emissions by then.

Barroso did not identify the industries concerned, but EU sources have told Reuters a special regime would cover steel, aluminium and cement.

US Trade Representative Susan Schwab said on Monday she had agreed with EU Trade Commissioner Peter Mandelson that punitive trade measures should not be used against imports from countries that do not sign up to greenhouse gas emissions cuts.

"We have been dismayed at a variety of suggestions where we see climate or the environment being used as an excuse to close markets," Schwab said in response to ideas in earlier versions of the EU plan.

The Commission package, to be unveiled on Wednesday, will translate into draft legislation of EU leaders' commitment to cut greenhouse gas emissions by one-fifth from 1990 levels by 2020 and draw 20 percent of power from renewable sources.

The Brussels executive will set EU-wide targets for emissions from sectors such as energy and power generation covered by the ETS and national targets for CO2 cuts from other sectors such as buildings, heating and cooling and transport.

The package will also spell out how to increase the share of renewable sources in power production to at least 20 percent in 2020 from 8.5 percent now.

Responding to criticism from scientists and economists arguing that biofuels save little CO2, harm the environment and would require huge subsidies, Barroso said the EU would set strict criteria for their environmental sustainability.

"Effort sharing" on renewable energy would take into account different national starting points and potentials, he pledged.

Sweden and Latvia already draw almost 40 percent of their power from wind, hydro-electric, solar and biomass, while others such as Britain get only 1.3 percent from renewable sources. (Writing by Marcin Grajewski and Paul Taylor, editing by James Jukwey)


US to lead the "clean" world

The US have always insisted that the solution to climate change is not regulations and protocols named after various cities but the application of US brains and business acumen.

When the need is great enough (and the profits large enough) the idea is that US firms and Universities will step up to the plate (even got baseball in this post) and deliver.

This post is really a criticism of Europe's ability to turn invention into profit. It is the US money men that are running the show and not the Universities. However, as long as it happens should it matter where the money comes from?

Perhaps Bush was right all along?

US threatens to take Europe’s ‘clean’ lead[FT]

A US investment boom in alternative energy and other new “clean” technologies is threatening to put Europe in the shade in a field it has traditionally dominated.

The wave of money could hand the US a lead in environmentally important technologies, as some of Silicon Valley’s leading venture capitalists scour European universities and research institutions for the next big ideas in fields from solar power to waste management.

“Europe is like a rich vein of unmined stuff that hasn’t been put into the world, even given the emphasis on ‘green’ in Europe,” said Bill Joy, a founder of Sun Microsystems and now a partner at Kleiner Perkins Caufield & Byers, which has led the charge by US tech financiers into the area.

European investment in clean technology companies last year was only a third of the $3.7bn ploughed into the field in the US, according to Cleantech Group, a specialist US research firm. That is a big swing from two years before, when Europe mustered nearly two-thirds as much investment as the US.

Clean technology spans a range of industries including alternative energy, energy storage, recycling and waste management and advanced new “clean” materials.

Europe laid the groundwork for many of these technologies thanks to government policies supporting investment and still has a strong scientific presence. But “the financial engine has swung back heavily over the past couple of years” to the US, said John Balbach, a partner at Cleantech.

The US push reflects a stampede by venture capitalists centred on both San Francisco and Boston, who are seeking to apply an approach to building up new technology industries that was honed in the PC and internet businesses.

Clean technology “re­quires the kind of innovation that we have seen in [Silicon] Valley,” said Mr Joy. “That’s the perfect place for venture investment behind scientific discovery.”

The US financing boom has already started to attract specialists from other countries. They include Ausra, the solar power company, which was based on technology developed at Sydney University but moved to California after raising money from Kleiner Perkins and Khosla Ventures.

However, the rush of venture capital money is already prompting warnings of a coming bubble in the US, particularly in the field of solar energy. Nearly $1bn was poured into alternative energy ventures in California alone last year, according to Cleantech, as investors raced to harness technologies from the chip industry to try to find the next breakthroughs in photovoltaic cells.

“There are lots of methods, but none of them [has] been proven,” warned Ray Rothrock, a partner at venture capital firm Venrock.


Monday, January 21, 2008

Global Cooling from Abolut Vodka

Swedish vodka group Absolut are pushing their green credentials. Whilst I can vouch for the quality of the merchandise (especially when cooled - globally or otherwise) I am somewhat cynical about such branding exercises.

But hey, anything is better than nothing and the adverts are always innovative. They even provide hints and tips on going green such as:

1. Pay bills online. Save time, paper and a lot of stamp licking.

2. Use bamboo products. They're good for more than just pandas.

Absolute Global Cooling

Anyone bringing the redbulls?


Climate Change and Economic and Econometric Theory

In a recent post we looked at the 19 skeptical economists who are part of the now legendary Inhofe 400.

The big question is whether any economists should be included in a climate science listing. After all what can social scientists tell us about whether the climate change we are witnessing is man made or not. Sure we can tell you the costs that might be incurred if we do this or don't do that but not why temperatures have increased.

The issue is the role of econometrics and whether the statistical techniques developed by econometric theorists are as advanced as anything in the sciences. It appears they are.

However, maybe economists are fighting back. The European Science Foundation recently put out this press release.

Economists help climate scientists to improve global warming forecasts

Climate scientists are collaborating with experts in economic theory to improve their forecasting models and assess more accurately the impact of rising atmospheric carbon dioxide levels. Although there is broad consensus that there will be a significant rise in average global temperature, there is great uncertainty over the extent of the change, and the implications for different regions. Greater accuracy is urgently needed to provide a sound basis for major policy decisions and to ensure that politicians and the public remain convinced that significant changes in consumption patterns and energy production are essential to stave off serious consequences in the coming decades and centuries.

The climate modelling community has become increasingly aware that some of the statistical tools that could improve their modelling of climate change may already have been developed for econometric problems, which have some of the same features. The European Science Foundation (ESF) brought these two communities together for the first time in a recent workshop, sowing the seeds for future collaboration.

“We achieved our goal of bringing together people from two very distant but equally valuable fields,” said the workshop’s co-convenor Peter Thejll. “It was designed as a one-way session whereby econometricians were supposed to convey knowledge of econometric methods to the climate researchers.”

This has already proved highly valuable because economic and climate models require similar kinds of statistical analysis, both for example involving serial correlation where the aim is to predict the future value of a variable based upon a starting value at an earlier point in time. In economics such a variable might be the price of a commodity, while in climatology it might be temperature or atmospheric pressure. In both cases the variables change randomly during successive time intervals subject to varying constraints within a closely defined zone, and therefore can be analysed using similar “random walk” techniques.

“To solve important climate problems related to climate change and change attribution with statistics, these methods have to be used and understood by climate researchers,” said Thejll. “We brought together people who understand these problems and had a great, and informative, time.”

Thejll is confident the new found cooperation with the econometric community will improve climate modelling and forecasting, but first there is a need to digest some of the new tools and ideas. The aim is to introduce greater statistical sophistication into climate analysis, partly by understanding better the correlation between different aspects of change, for example how one region impacts another. “We first need to see the spread of econometric methods so that we no longer read climate research papers that ignore important statistical problems,” said Thejll wryly.

This will lead to an important first step towards better climate change predictions models – understanding the limitations of existing models. “One improvement that can follow from the use of econometric methods in climate research is a better understanding of the level of ignorance we have,” said Thejll.

One problem at present is that uncertainties are commonly underestimated, and this makes it very difficult to predict with much confidence even the broad climatic consequences or rising atmospheric carbon dioxide levels. But Thejll hopes and expects that by incorporating the key tools of econometric modelling, climate prediction will become much more accurate and valuable.

The ESF workshop, Econometric Time Series Analysis applied to climate research, was held in Frascati, Italy, in September 2007.

For more information please go to http://www.esf.org/fileadmin/be_user/ew_docs/06-047_Programme.pdf

Asian Growth, Climate Change and Natural Disasters

PlanetArk today released two separate stories that encapsulate the globalisation and environment issue. China and India do need to consider unilateral policies and not wait for the US for a lead. One wonders if the US were the country being worst hit whether US policy might be a little more flexible.

Greenhouse Gases at New Peak in Sign of Asia Growth [PlanetArk]

TROLL STATION, Antarctica - Atmospheric levels of the main greenhouse gas have set another new peak in a sign of the industrial rise of Asian economies led by China, a senior scientist said on Saturday.


He said growing economies in Asia such as China and India were a reason for the rise in emissions, in line with a linked fall of industrial efficiency in the past two years or so -- more carbon is being emitted per dollar of economic output in a reverse of a long improving trend.


"The affluent world wants to buy cheap stuff and we buy it...from the inefficient old-fashioned technology that we have got rid of," he said. He added that there were also signs the oceans had become less efficient at soaking up carbon dioxide.

Why is this a problem for Asia specifically?

Asia Hardest-Hit by Disasters in 2007, Group Says [PlanetArk]

GENEVA - Asia was hardest-hit by natural disasters last year that worldwide killed more than 16,500 people and caused US$62.5 billion in damage, a UN-backed research group said on Friday.

There was also a marked increase in the number of floods in 2007, a trend the Centre for Research on Epidemiology of Disasters said reflected the threat posed by global warming.

Eight of the worst 10 disasters last year struck Asia. Cyclone Sidr in Bangladesh in November claimed the highest toll of 4,234 lives, according to the Belgium-based centre.


"We see more extreme events overall, not geological ones like earthquakes and volcano eruptions, but very many more windstorms and floods," she said.

Scientists warn that climate change, blamed mainly on human emissions of so-called greenhouse gases from burning fossil fuels, will bring extreme weather including more heatwaves, droughts, floods and rising seas in coming years.

"Current trends are consistent with the prediction of the Inter-Governmental Panel on Climate Change, in that Asia and also West Africa are already suffering from more severe and frequent floods," Guha-Sapir said in a statement.


Saturday, January 19, 2008

McKinsey Report: "Reducing US Greenhouse Gases - How much will it cost?"

In a recent study, McKinsey and Company wrote a report outlining the costs of abating greenhouse gas emissions. It makes for interesting reading.

Starting in early 2007, a research team from McKinsey worked with leading companies, industry experts, academics, and environmental NGOs to develop a detailed, consistent fact base estimating costs and potentials of different options to reduce or prevent GHG emissions within the U.S. through 2030. The team analyzed more than 250 options, encompassing efficiency gains, shifts to lower-carbon energy sources, and expanded carbon sinks.

Specifically they looked at:

Emissions from human activity with US borders.

Opportunities with marginal costs less than $50/tonne CO2.

Technological approaches with recognised costs and development paths.

Net captial, operational and maintainance costs.

The following figure is interesting if not predictable.

These are the following options for reducing emissions across 5 clusters.

The conclusions are:

The report contains:

executive summary (PDF - 460 KB)
full report (PDF - 4.11 MB)
video presentation
slideshow (PDF - 7 MB)

H/T: Common Tragedies - a good new blog from research fellows at Resources for the Future. We have just added this blog to our blogroll. Check it out.


Thursday, January 17, 2008

Illegal fishing and Europe's unquenched appetite

New York Times does illegal fishing under the "empty seas" by-line.

Europe’s Appetite for Seafood Propels Illegal Trade

Fish is now the most traded animal commodity on the planet, with about 100 million tons of wild and farmed fish sold each year. Europe has suddenly become the world’s largest market for fish, worth more than 14 billion euros, or about $22 billion a year. Europe’s appetite has grown as its native fish stocks have shrunk so that Europe now needs to import 60 percent of fish sold in the region, according to the European Union.

In Europe, the imbalance between supply and demand has led to a thriving illegal trade. Some 50 percent of the fish sold in the European Union originates in developing nations, and much of it is laundered like contraband, caught and shipped illegally beyond the limits of government quotas or treaties. The smuggling operation is well financed and sophisticated, carried out by large-scale mechanized fishing fleets able to sweep up more fish than ever, chasing threatened stocks from ocean to ocean.

The European Commission estimates that more than 1.1 billion euros in illegal seafood, or $1.6 billion worth, enters Europe each year. The World Wide Fund for Nature contends that up to half the fish sold in Europe are illegally caught or imported. While some of the so-called “pirate fishing” is carried out by non-Western vessels far afield, European ships are also guilty, some of them operating close to home. An estimated 40 percent of cod caught in the Baltic Sea are illegal, said Mireille Thom, a spokeswoman for Joe Borg, the European Union’s commissioner of fisheries and maritime affairs.

“We know that it’s much too easy to land illegal fish in European ports, and we are really eager to block their access to European markets,” Ms. Thom said.


If cost is an indication, fish are poised to become Europe’s most precious contraband. Prices have doubled and tripled in response to surging demand, scarcity and recent fishing quotas imposed by the European Union in a desperate effort to save native species. In London, a kilogram of lowly cod, the traditional ingredient of fish and chips, now costs up to £30, or close to $60, up from £6 four years ago.

One is not surprised that China gets a look in here somewhere.

Tracing where the fish come from is nearly impossible, many experts say. Groups like Greenpeace and the Environmental Justice Foundation have documented a range of egregious and illegal fishing practices off West Africa.

Huge boats, owned by companies in China, South Korea and Europe, fly flags of convenience from other nations. They stay at sea for years at a time, fishing, fueling, changing crews and unloading their catches to refrigerated boats at sea, making international monitoring extremely difficult.

Even when permits and treaties make the fishing legal, it is not always sustainable. Many fleets go well beyond the bounds of their agreements in any case, generally with total impunity, studies, including some by Greenpeace and Environmental Justice, show.


“There’s a big competition out there with foreign vessels, especially from China,” said Moshwood Kuku, a fishmonger at Afikala Afrikane, a stall that specializes in African fish at Billingsgate. “Locals can only fish the coast.”

Environmental Policy and Competitiveness in a Globalizing World

This research paper by Dieter Hesse (United Nations Economic Commission for Europe) studies the subject that is at the heart of the motivation for this blog and our current research into globalization and the environment.

This is an accessible policy based paper (with no equations).


Environmental Policy and Competitiveness in a Globalizing World: Challenges for Low-Income Countries in the UNECE Region

Date: 2007-10

By: Dieter Hesse (United Nations Economic Commission for Europe)

URL: http://d.repec.org/n?u=RePEc:ece:dispap:2007_6&r=env[PDF]

A major policy goal of low-income countries is to promote the creation of competitive economic capacities in order to achieve sustained growth and raise the material well being of the population. Economic growth is, however, associated with increasing environmental pressures, and the question is to what extent the costs of more stringent environmental policies will affect the competitiveness of domestic firms. This paper examines the empirical evidence on the impact of environmental protection costs on international trade and FDI location decisions and explores the opportunities that the process of technological upgrading, which is a major driving force of economic development, provides for reducing environmental pressures. Also considered are the policies and supportive institutional arrangements that can help to effectively integrate environmental protection into national economic development strategies and thereby promote sustainable production and consumption patterns.

Keywords: Environmental policy, competitiveness, Eastern Europe, transition economies

JEL: O33 O52 Q55 Q56 Q58


Saturday, January 12, 2008

"Inhofe's 400": the 19 skeptical economists unmasked

In a follow up to our previous post on the economists of Inhofe's 400 climate change skeptics we are grateful to the Daily Green for providing us with the full list of 20 so-called economists although this list contains those who barely qualify for this name.

Strictly speaking there are only 19 as Tim Curtin is included twice. Sigh.

Perhaps the most surprising in Gary Becker. In a post to follow I intend to dig out Becker's work or comments in this area to reveal the true extent of Becker's scepticism on climate change.

edit - I believe Richard Tol has also requested his name be removed from the list so we are down to 18.

For more detail on a number of these economists including publications see:

The "400": Economists for the climate high jump

With the exception of Becker and perhaps Milne this is a motley bunch many with industry funded links and others that are not really economists.

However, 20 is still only a small percentage of the 413 names on Inhofe's list although the Daily Green does have a point - economists are not climate change scientists.

20 Economists

1. Gary S. Becker, Nobel Prize-winning economist who is a senior fellow at the Hoover Institution and University Professor of Economics and Sociology at the University of Chicago. Not a natural scientist.

2. Tim Curtin, economist, and a former advisor to the EU, World Bank, and an emeritus faculty member of Australian National University. No discernable climate or natural science background.

3. Tim Curtin, economist, and a former advisor to the EU, World Bank, and an emeritus faculty member of Australian National University. No discernable climate or natural science background.

4. Robert W. Hahn, economist who is heavily involved in industry-funded groups (EPW report lists him as a chemical engineer).

5. David Henderson, a professor at the Westminster Business School and former chief economist for the Organization for Economic Co-operation and Development. Has no discernable formal education in science and is associated with the right-leaning Hoover Institution, which receives funding from ExxonMobil, Arco, big tobacco and similar interests.

6. Dr. Robert Higgs, a Senior Fellow for the Independent Institute who has been a visiting scholar at Oxford University, Stanford University, and a fellow for the National Science Foundation. Economist with no discernable scientific background. Higgs is also a Senior Fellow with the Libertarian Independent Institute, which is industry funded.

7. Dr. Arnold Kling, economist with no discernable climate or natural science background. Sssociated with CATO, which receives Exxon funding.

8. Hans H.J. Labohm, PhD, economist, former advisor to the executive board, Clingendael Institute, who was an IPCC reviewer. No degrees in or peer-reviewed articles in natural sciences. Connected to industry-funded groups.

9. The Rt. Hon. Lord Lawson of Blaby, economist; Chairman of the Central Europe Trust; former Chancellor of the Exchequer, U.K.

10. Alister McFarquhar, PhD, international economist, Downing College, Cambridge, U.K.

11. Ross McKitrick, PhD, Associate Professor, Dept. of Economics, University of Guelph, Canada. Economist with heavy connections to industry-funded groups.

12. Owen McShane, B. Arch., Master of City and Regional Planning (UC Berkeley), economist and policy analyst, joint founder of the International Climate Science Coalition, Director - Centre for Resource Management Studies, New Zealand. Economist, not a natural scientist.

13. Frank Milne, PhD, Professor, Dept. of Economics, Queen's University, Canada.

14. Des Moore, former deputy secretary of the federal treasury in Australia. Economist and political commentator. not a natural scientist. Director of the Institute for Private Enterprise. which receives industry funding.

15. Dr. Thomas Gale Moore is a former professor at Michigan State University, a senior fellow at the Hoover Institute, which receives funding from corps like Exxon.

16. Professor Emeritus Peter R Odell of International Energy Studies at the University of Rotterdam. Retired Economist with no natural science experience.

17. Gwyn Prins of the London School of Economics. Economist with no discernable natural science experience.

18. Alex Robson, PhD, Economics, Australian National University. Economist who is connected to industry-funded groups.

19. Dr. Richard Tol, the director of the Centre for Marine and Atmospheric Science, and a prominent economist with Hamburg University in Germany. An economist with no discernable experience in climate or earth sciences.

20. Dr. G. Cornelis van Kooten, professor and Canada Research Chair in environmental studies and climate change, Dept. of Economics, University of Victoria. Economist, with no discernable climate or earth science experience.


Thursday, January 10, 2008

Death for Pangolin smugglers

When you hear that China has passed the death sentence for individuals caught smuggling creatures that one is only vaguely aware of it is surely justifies a blog post.

This quote might remind some of their student days.
Pangolins, nocturnal scaly anteaters which spend most of their days curled up in a ball asleep, are in great demand in China where their meat is considered a delicacy and their scales believed to hold medicinal properties.

The other quote worth highlighting is that in China:
...a suspended death sentence is usually commuted to life imprisonment on good behaviour.

These little chaps are obviously in big demand in China where they are valued for their meat and scales which predictably have medicinal benefits of some description.

China Comes Down Hard on Pangolin Smugglers
From October 2005 to April 2006, a gang smuggled 17 containers of pangolin meat and scales worth 23.4 million yuan (US$3.2 million) into China, Xinhua news agency said.

That must be a hell of lot of Pangolins given each one is only the size of a hand. £3.2 million for 17 crates shows why the smugglers were prepared to risk the death sentence.


Blue Skys over Beijing or Statistical Manipulation?

A post that may be illuminating for any economist working on Chinese data, especially environmental data.

One World...One Dream..One Gas Mask: Part 349 [Time China]

But a closer look at the data and changes in collection methods casts doubt on the government's sunny claims -- and raises serious questions about Beijing's commitment to a green Olympics.

On Jan. 1, the government announced "blue sky" days had improved to 246 last year, up from 100 in 1998. The news was widely reported inside and outside of China.

What wasn't reported, though, was a change in collection methods. The Beijing API is an average of data from selected monitoring stations. From 1998 to 2005, the same seven stations -- located in the city center -- were used to measure air quality. These stations monitored areas with different characteristics, including high traffic areas, plus residential, commercial and industrial districts. In 2006, however, just as international scrutiny on China's air quality was increasing, two stations monitoring traffic were dropped from the city API calculations, while three additional stations in less polluted areas were added.

Calculating the average daily Beijing API values for 2006 and 2007 using data from the original monitoring stations changes the outcome considerably; in fact, 38 of Beijing's 241 so-called "blue sky" days in 2006 would not have qualified as "blue sky" under the old methodology. The number is even less for 2007: 55 fewer days would have attained the "blue sky" standard, out of 246 reported "blue sky" days. That translates into fewer "blue sky" days as a whole than in 2002 (which had 203 reported "blue sky" days), immediately after Beijing was awarded the Olympics, and casts grave doubt on China's reported five straight years of continuous air quality improvement.

This is not all - even the definition of pollution has been changed. Sigh.

The government also substituted in less stringent measures of pollution. Beginning in June 2000, measurements of nitrogen dioxide were substituted into the air quality calculations in place of measurements of nitrogen oxides. The new standard for nitrogen dioxide was much less stringent than the old standard for nitrogen oxides, which were the worst pollutant (in terms of number of weeks exceeding air quality standards) before 2000. Since then, not a single day has exceeded the standard, thanks to the new, more easily attainable criteria.


Impact of climate change on life in the UK in 50 years time

Neil Adger (Tyndall Centre) presents his view of life in Britain for someone born in 2007 in 50 years time.

Most of the doomsday scenarios painted here are the standard fare. Floods, migration, social disruption, diseases.

Climate choices: adapt or move [ChinaDialogue]

A British child born in 2007 will be 50 in 2057. What will life be like for our 50-year-old citizen? Here is a plausible scenario:

Summer top temperatures will be around 38C (100F), winters will be shorter and floods more frequent. To combat the latter, the government already will have controlled, through the planning process, where people live. Houses, businesses and land already in risky areas will have lost value because insurance companies will have withdrawn protection. People will simply choose not to live in risky areas. But, as now, climate change will retain the ability to spring unforeseen weather surprises.

Climate change will have brought about significant population shifts, primarily relocating the world's poor. Mediterranean Europe, North Africa, California and the southwest United States in 2057 has become severely water-stressed. In the northern hemisphere, there are frequent severe storms with concurrent summer droughts. The UN climate reports’ predictions in 2007 were right: up to 500 million people in south Asia and Africa live with incomes that put them at risk from hunger. This has exacerbated political instability in the worst-affected regions, including in the Horn of Africa and west and southern Africa.

Despite the problems of planning risk, the rush to the coast, begun in the 20th century, continued: 350 million people had moved to the coastal cities of China by 2027. These cities by the sea invested heavily to protect their new infrastructure from rising sea levels, flooding and limited fresh water. Adaptation is easier done with new building than in the ancient European capitals. All continents lose agricultural productivity. The rural poor stay poor.

Public health agencies in 2057 are stretched by new diseases and the resurgence of malaria, diarrhoea and dengue fever -- diseases transmitted through pests and in water. The three decades from 1970 to 2000 saw 30 emerging infectious diseases, including HIV, Ebola, Lyme disease and toxic E. coli, and the trend continues. In rural Africa, health-care needs overwhelm national health agencies. Ill health acts as a significant constraint on Africa's economic productivity.

A major issue for the UN is the fair allocation of migration-compensation quotas. This proposal is for polluting countries to allocate emigration quotas to affected countries on the basis of historical responsibility for the pollution and subsequent extreme weather that led to displacement. The proposal is fiercely resisted by the major pollution of the G8+4, who seek limited immigration by skilled workers, rather than taking on environmental refugees.

Given what we know about climate change in 2007 and where it will have the most impact, future migration, in effect, will be a failure of adaptation to climate risks. The decision to adapt or move leads to tough choices now and in the future for the people of Tuvalu, Happisburgh and other vulnerable regions across the world.


World Bank to help LDCs fight climate change

World Bank, whilst historically against using loans to fight climate change are changing their stance (slightly).

This quote sums this up:

"I don't agree to use existing development funds to finance the fight against climate change in the least developed countries," Michel said.

This is a rational stance to take in many respects. The World Bank's role is to reduce poverty and aid development. Should these loans be curtailed in favour of climate change spending? Can they mean the same thing?

EU, World Bank Eye Loan for Climate Change Fight [PlanetArk]

BRUSSELS - The European Union and the World Bank are discussing raising a major long-term loan to help poorest countries fund essential measures to combat climate change, the EU's development chief said on Wednesday.


"I don't agree to use existing development funds to finance the fight against climate change in the least developed countries," Michel said.

"My aim is to create a global loan with the World Bank -- we are working with (World Bank President) Bob Zoellick -- to help the LDCs (Least Developed Countries) fight climate change."

Michel said rich countries would reimburse the loan over a long period, and some of that funding could be raised from the private sector through taxation or other levies.

The EU wants to position itself in the vanguard of the fight against global warming and its impact.


Body Burning: Mourners warm to the idea

For economists efficiency is a key concept.

The news that a crematorium near Manchester is considering using the heat from its body burning furnaces to warm the mourners makes perfect economic sense and it will help reduce carbon emissions. Everyone is a winner.

The question is whether the mourners, if offered a choice, would rather stay a little chilly.

Crematorium may use its heat to warm mourners [Reuters]

A British crematorium is considering using heat from its body-burning furnaces to also keep the mourners warm in its chapel.

The council for the district of Tameside near Manchester is considering recycling the heat from the furnaces of its crematorium in Dukinfield as part of a drive to reduce carbon emissions.

"It's a sensitive issue, people have different views. I am sure some think we are just burning bodies to provide heat, but we are not doing that," Tameside Council's Head of Environment Operations, Robin Monk, told Reuters.

The proposal is for effluent gas to be passed through heat exchangers which will then heat up water that can be pumped into the chapel's radiators. There is another plan to send the gases to a turbine to create electricity.

"What do you do with waste gas?" Monks said. "At the moment it's just being sent up a chimney and into the atmosphere. We can make good use of it," he said.


"The families don't need to feel that it is their beloved that is warming them up, there is no direct connection with the body at any given service."

Cremation furnaces are capable of generating 870-980 degrees Celsius (1600-1800 degrees Fahrenheit) heat. Instead of using such massive energy solely to cremate one body at a time, Tameside council wants to harness that energy to go towards heating and lighting the chapel.


"It has nothing to do with, putting it crudely, burning bodies. There may be ghoulish scenes in people's minds, but it's not like that, It's simply using the gas more efficiently."


Tuesday, January 08, 2008

Shiny happy peas and plums

The new solution to global warming is shiny crops.

Why didn't I think of that?

Shiny crops could slow global warming, scientists say [Guardian]

Forget mirrors in space and seeding the oceans with iron, scientists have come up with a new way to tackle the looming threat of global warming: fields of shiny crops.

Experts at the University of California, Irvine, say reflective plants could send more of the sun's heat back into space, and even reverse temperature rises in parts of the world. Encouraging farmers to grow shinier crops could reduce maximum daytime temperatures in agricultural regions by as much as 1.9C, they say.


Monday, January 07, 2008

How to become a prolific academic celebrity

Ever wondered how the Harvard Professor and other celebrity academics manage to publish so many books and so many articles.

This article from 02138 magazine (H/T: Borjas Blog) gives us the answer - employ teams of researchers to do it for you.

However, as Charles Ogletree, a professor at Harvard Law School, found out, always trusting your RA's in a dangerous game. See article for interesting anecdote.

A Million Little Writers [02138]

When we buy books off best seller lists these days, we almost expect to read the work of more than the named author: his backstage researchers, editors, and agents, maybe even a ghostwriter. Professional athletes admit that they haven’t read the “autobiographies” that carry their names; thriller writer James Patterson has six books coming out this year, thanks to the little-known co-authors who work with him; some popular authors, such as Robert Ludlum and V.C. Andrews, even continue writing books after they’re dead, thanks to the help of hired ghosts.

One might think that the ivory tower should and could resist such commercialism. If nowhere else, the provenance of an idea ought still to matter in academia; the authenticity of authorship should remain a truism. After all, one of the reasons scholars are granted tenure is so they can write free of the commercial pressures of the publishing world, taking as long as they need to get things right. And, whether in the sciences or the humanities, the world of scholarship has always prioritized the proper crediting of sources and co-contributors.

This is all rather odd given the strict rules we have on plagiarism for our students.

This is where it gets depressing though. Young ECONOMICS Professors hires 7 researchers working 70 hour weeks - makes competing with such fellows rather difficult.

Because, in any number of academic offices at Harvard, the relationship between “author” and researcher(s) is a distinctly gray area. A young economics professor hires seven researchers, none yet in graduate school, several of them pulling 70-hour work-weeks; historians farm out their research to teams of graduate students, who prepare meticulously written memos that are closely assimilated into the finished work; law school professors “write” books that acknowledge dozens of research assistants without specifying their contributions. These days, it is practically the norm for tenured professors to have research and writing squads working on their publications, quietly employed at stages of co-authorship ranging from the non-controversial (photocopying) to more authorial labor, such as significant research on topics central to the final work, to what can only be called ghostwriting.

The article goes on to blame Harvard for leading a bad example. The clear culprit is opportunity cost - Harvard professors can earn a lot more doing consultancy that they do this while ensuring a steady stream of publications by using some of the extra money to hire research assistants (who will be good by definition as they are at Harvard).

The celebrity professor is a new phenomenon and not a good one,” says Lewis. In celebrity-driven academia, “getting ahead … means beating other people, which means establishing a personal reputation and denying it, to the extent possible, to rivals and even to assistants.

Clearly this celebrity gravy train is one worth riding in the US:

Outsourced work is partly a response to time constraints; it allows a professor to both produce more—more books, more op-eds—and have more time for non-research work, such as appearing on television, taking on pro bono legal cases, and starting research centers. With such aims, a professor is often pursuing fundamentally different goals than the pursuit of knowledge: The frequent publication of quickly written popular books generally has more to do with the pursuit of fame and material success. Publish the book, land on TV, sign up with a speaker’s bureau for five figures a speech, maybe even get appointed to corporate and charitable boards. Suddenly, your income in the low six figures can double or triple.

Anyone think a book on "Globalisation and the Environment" will sell?

Feel free to out any academic economists out there that outsource their books and research - perhaps they all do and I am the last to know?


US Manufacturing and Pollution: Abatement or Displacement

Arik Levinson has written a good summary piece on the clean-up of US manufacturinga nd the relationship between trade and technology on the reduction in pollution experienced in the US.

Matt Cole and I have done some work in this area and Matt even manages to sneaks in with a citation in the Levinson article.

This paper of ours covers a similar topic:

Why the Grass is Not Always Greener: The Competing Effects of Environmental Regulations and Factor Intensities on US Specialization

The global decline in trade barriers means that environmental regulations now potentially play an increasingly important role in shaping a country’s comparative advantage. This raises the possibility that pollution intensive industries will relocate from high regulation countries to developing regions where environmental regulations may be less stringent. We assess the evidence for this possibility by examining the USA’s revealed comparative advantage (RCA) and other measures of specialization. We demonstrate that US specialization in pollution intensive sectors is neither lower, nor falling more rapidly (or rising more slowly) than in any other manufacturing sector. We offer an explanation for this finding. Our analysis suggests that pollution intensive industries have certain characteristics - specifically they are intensive in the use of physical and human capital - that makes developing countries less attractive as a target for relocation. We demonstrate econometrically the economic and statistical significance of these factors and illustrate how they appear to oppose the effects of environmental regulations as determinants of US specialization.

Suggested Citation

Matthew A. Cole, Robert J.R. Elliott, and Kenichi Shimamoto. "Why the Grass is Not Always Greener: The Competing Effects of Environmental Regulations and Factor Intensities on US Specialization" Ecological Economics 54.1 (2005): 95-109.

Here is the link to the Levinson article. It is worth reading in full. His findings fit well within the literature and his results are intuitive and most importantly plausible (which always helps).

What accounts for the clean-up of US manufacturing: technology or international trade? [Vox]

Since the 1970s, US manufacturing output has risen by 70% but air pollution has fallen by 58%. Was this due to improved abatement technology or shifting dirty production abroad?

Antiglobalisation protesters display signs denouncing international trade's role in polluting the environment.1 Pundits write Op-Ed pieces cautioning that increased trade has environmental costs.2 And a majority of Americans agree that "freer trade puts the United States at a disadvantage because of our high ... environmental standards".3

Are they correct? Over the past thirty years, while the real value of US manufacturing output has increased by more than 70 percent, the total annual air pollution emitted by US manufacturers declined substantially, by 58 percent for the sum of four common air pollutants.4

One explanation for the clean-up of US manufacturing is that the protesters are correct, and that thanks to freer trade, the US now imports polluting goods it once produced domestically, and concentrates domestic manufacturing on goods less likely to incur environmental regulatory costs. Of course, there is an alternative explanation: thanks to improved technology (cleaner fuels, end-of-pipe abatement, process changes, etc.) US manufacturers may now be able to produce more output using less pollution. Which of these explanations, trade or technology, accounts for the dramatic clean-up of US manufacturing pollution?


What is the bottom line? Increased net imports of polluting goods account for about 70 percent of the composition-related decline in US manufacturing pollution. The composition effect in turn explains about 40 percent of the overall decline in pollution from US manufacturing. Putting these two findings together, international trade can explain at most 28 percent of the clean-up of US manufacturing.

Why should we care?

If the 75% reduction in pollution from US manufacturing resulted from increased international trade, the pundits and protestors might have a case. Environmental improvements might be said to have imposed large, unmeasured environmental costs on the countries from which those goods are imported. And more importantly, the improvements in the US would not be replicable by all countries indefinitely, because the poorest countries in the world will never have even poorer countries from which to import their pollution-intensive goods. The US clean-up would simply have been the result of the US coming out ahead in an environmental zero-sum game, merely shifting pollution to different locations. However, if the US pollution reductions come from technology, nothing suggests those improvements cannot continue indefinitely and be repeated around the world. The analyses here suggest that most the pollution reductions have come from improved technology, that the environmental concerns of antiglobalization protesters have been overblown, and that the pollution reduction achieved by US manufacturing will replicable by other countries in the future.

Our own composition/scale/technique effect paper came out a few years ago in JEEM:

Determining the Trade-Environment Composition Effect: The Role of Capital, Labour and Environmental Regulations

Matthew A. Cole, University of Birmingham
Robert J.R. Elliott, University of Birmingham


This paper argues that pollution intensive sectors may be subject to opposing forces of comparative advantage since these sectors are also typically capital intensive, yet regions with low environmental regulations tend to be those that are the least capital abundant. We examine therefore, whether compositional changes in pollution arising from trade liberalization originate due to differences in capital-labor endowments and/or differences in environmental regulations. The contribution of the paper is threefold; first, we provide a comprehensive empirical analysis of the determinants of four common pollutants, paying particular attention to the nature of the trade-induced composition effect; second, we investigate whether the result of Antweiler et al. (2001), who find evidence that both environmental regulations and capital-labor endowments determine sulfur dioxide concentrations, also holds for sulfur dioxide emissions; third, we examine whether this result holds for altogether different pollutants. Our results, while providing partial support for Antweiler et al., also raise a number of points for discussion.
Suggested Citation

Matthew A. Cole and Robert J.R. Elliott. "Determining the Trade-Environment Composition Effect: The Role of Capital, Labour and Environmental Regulations" Journal of Environmental Economics and Management 46.3 (2003): 363-383.


Sandra Rousseau publications

By pure coincidence I was checking through some NEP: Environmental Economics and came across a couple of interesting papers by Sandra Rousseau (KULEUVEN).

It also so happens that she is also the author of the Environmental Economics journal ranking that we commented on in the previous post. This is worth reading in full.

Sandra Rousseau recent publications

Papers that I need read:

Journal Evaluation by Environmental and Resource Economists: A Survey

Date: 2007-11
By: Rousseau Sandra (K.U.Leuven-Center for Economic Studies)

URL: http://d.repec.org/n?u=RePEc:ete:etewps:ete0705&r=env

Using an online survey, we have asked the researchers in the field of environmental and resource economics how they themselves would rank a representative list of journals in their field. The results of this ranking are then compared to the ordering based on the journals’ impact factors as published by Thomson Scientific. The two sets of rankings seem to be positively correlated, but statistically the null hypothesis that the two rankings are uncorrelated cannot be rejected. This observation suggests that researchers interpret the current quality of journals based on other factors in addition to the impact factors.

The Impact of Sanctions and Inspections on Firms’ Environmental Compliance Decisions

Firms’ compliance decisions are expected to be strongly influenced by the expected fine for non-compliance with environmental regulations. In this paper we measure the effect of the probability of inspection and the size of the fine – jointly and separately – on the compliance decisions made by textile firms in Flanders. The results confirm the deterrence effect of increasing inspections, but they do not support a similar finding for monetary sanctions. The low levels of the sanctions that courts levy and the rapidly increasing marginal abatement costs imply that firms’ compliance decisions are not positively affected by the imposed penalties. However, we do find that it might be welfare enhancing to occasionally scan a selection of firms or sectors more deeply since the number of detected violations raises significantly as a consequence.

Economic Empirical Analysis of Sanctions for Environmental Violations: a Literature Overview

In order to have an effective and efficient environmental policy, it is necessary to
complement the legislative texts with a monitoring and enforcement strategy. Without
such a strategy, the regulation’s target group will have little or no incentive to comply with the rules and the environmental objectives are not likely to be met. Over recent years an extensive theoretical literature on the monitoring and enforcement aspects of environmental regulations has emerged (see Cohen (2000b) and Polinsky and Shavell (2000) for literature overviews). However, the volume of empirical studies has been lagging behind and still not much is known about the use and the impact of various instruments used by environmental agencies.


Saturday, January 05, 2008

Ranking of Top Environmental Economics Journals

Environmental Economics have posted a ranking of environmental economics academic journals. I seem to recall filling in a questionnaire about this from some guys in Holland that may or may not be related to these findings (edit: it is by the way so I think I count as one vote in there somewhere). I seem to recall posting on this a month or so ago but here it is again just in case.

Environmental economics is a difficult field in which to rank journals. Ecological Economics tends to cause the most difficulty. John Whitehead provides an explanation which is that EE has a high impact factor because papers in EE cite other papers in EE. I think that is only part of the answer. EE papers are also more interdisciplinary and are thus read more widely and cited more widely. EE remains a bit of a mystery to me as a journal and its different rankings shows that this view is shared.

The other mystery is that ERE should be ranked higher and does make a creditable 4th in the economists ranking (a lot higher than its current 8 in the impact factor race). This is due as JW states to the number of issues per year but also related to its historic concentration on theory papers that traditionally get lower citations per paper.

These rankings touch on one problem with publishing in environmental economics. If a paper is submitted to JEEM (the undoubted leader by a mile) and is rejected (the most likely outcome) then it is a loooooonnng way down to the next journal especially if the paper is not related to agriculture.

Only the top 5-7 journals can creditably considered TOP 100 ECONOMICS JOURNALS at a push. The rest languish in the lower reaches of academia.

In the UK where journal quality is of great concern to the powers that rate economics departments this can make specialising in environmental economics a risky business. As this ranking then determines how much money a department receives for the next 8 years you can imagine that "publish well or perish" is a well known phrase.

Of course there are many general interest journals that publish environmental related papers such as the AER and Restat among the big boys as well as many of the international general journals.

I think the 3rd World Congress ranking is about right and am not sure any of JW's extra journals deserve to break into the top 11 except perhaps Energy Economics.

Apologies for blatant stealing but these lists will need to be accessed for years to come especially when advising PhD students where to submit.

Top journals in environmental economics [Env-econ]

Here are the rankings according to 2006 Impact Factors:

1. Journal of Environmental Economics and Management (JEEM)
2. Ecological Economics (EE)
3. American Journal of Agricultural Economics (AJAE)
4. Resource and Energy Economics (REE)
5. Energy Journal (EJ)
6. Australian Journal of Agricultural and Resource Economics (AJARE)
7. Land Economics (Land)
8. Environmental and Resource Economics (ERE)
9. Environment and Development Economics (EDE)
10. Journal of Agricultural and Resource Economics (JARE)
11. Natural Resources Journal (NRJ)

Here are the rankings according to a survey of attendees of the 3rd World Congress:

4. ERE
5. REE
6. EE
7. EDE
8. EJ
10. NRJ

JW's missing journals for the record are:
* Energy Economics
* Natural Resource Modeling
* Marine Resource Economics
* Energy Policy
* Journal of Environmental Management
* Journal of Agricultural and Applied Economics
* Water Resources Research
* Agricultural and Resource Economics Review

A couple of these I have never heard of so it gives me something to check out.


Friday, January 04, 2008

A Profile of James Lovelock: Climate Change Doomster

Reading this profile of James Lovelock is useful for one reason - it makes economists appear positively cheery on what the future holds.

This description of him by the Rolling Stone reporter might ring a bell for a few economists out there:

In fact, the coming of the Four Horsemen -- war, famine, pestilence and death -- seems to perk him up.

His books include:

Gaia: A New Look at Life on Earth

The Revenge of Gaia: Why the Earth Is Fighting Back - and How We Can Still Save Humanity

The Ages of Gaia: A Biography of Our Living Earth

The Prophet of Climate Change: James Lovelock [Rolling Stone]

James Lovelock has come to an unsettling conclusion: The human race is doomed. "I wish I could be more hopeful," he tells me one sunny morning as we walk through a park in Oslo, where he is giving a talk at a university. Lovelock is a small man, unfailingly polite, with white hair and round, owlish glasses. His step is jaunty, his mind lively, his manner anything but gloomy. In fact, the coming of the Four Horsemen -- war, famine, pestilence and death -- seems to perk him up. "It will be a dark time," Lovelock admits. "But for those who survive, I suspect it will be rather exciting."

So far so doom laden but lets get to the figures and really crank up the pain. A population decline to 500 million from 6.6 billion is a good start.

In Lovelock's view, the scale of the catastrophe that awaits us will soon become obvious. By 2020, droughts and other extreme weather will be commonplace. By 2040, the Sahara will be moving into Europe, and Berlin will be as hot as Baghdad. Atlanta will end up a kudzu jungle. Phoenix will become uninhabitable, as will parts of Beijing (desert), Miami (rising seas) and London (floods). Food shortages will drive millions of people north, raising political tensions. "The Chinese have nowhere to go but up into Siberia," Lovelock says. "How will the Russians feel about that? I fear that war between Russia and China is probably inevitable." With hardship and mass migrations will come epidemics, which are likely to kill millions. By 2100, Lovelock believes, the Earth's population will be culled from today's 6.6 billion to as few as 500 million, with most of the survivors living in the far latitudes -- Canada, Iceland, Scandinavia, the Arctic Basin.

Surely there is some good news. What about solar panels and wind turbines that now litter the skylines of politician's houses?

"I wish I could say that wind turbines and solar panels will save us," Lovelock responds. "But I can't. There isn't any kind of solution possible. There are nearly 7 billion people on the planet now, not to mention livestock and pets. If you just take the CO2 of everything breathing, it's twenty-five percent of the total --four times as much CO2 as all the airlines in the world. So if you want to improve your carbon footprint, just hold your breath. It's terrifying. We have just exceeded all reasonable bounds in numbers. And from a purely biological view, any species that does that has a crash."

Oh well. Are those revisions still worth doing I wonder?


Thursday, January 03, 2008

Should Economics Rule?

Whilst the short answer is clearly yes, this question was recently posed on Gristmill on the 10th December but in a way it is a follow up to the "400" post from 2 days ago.

It appears that Jerry Taylor a Senior fellow at the Cato Institute caused a bit of a stink when we was quoted as saying "scientists are in no position to intelligently guide public policy on climate change. Scientists can lay out scenarios, but it is up to economists to weigh the costs and benefits and many of them say the costs of cutting emissions are higher than the benefits".

As you might imagine this statement did not go down too well in certain circles.

Desmogblog (a good environmental blog) wrote in reply:

If you were told that you had a fatal disease and a Doctor told you how to get better, but then an economist came along and told you that the cost of treating you would be too high so it would be better not to do anything - would you sit there and wait to die?

Then Grist pile in:

Should economics rule? [Grist]

Economists, meanwhile, claim to have the key to rationality. Their claim is based in their own definition of their field, which is about "how people collectively make decisions", but they proceed very quickly from there to the marketplace via a number of dubious assumptions.

I like this positively Malthusian quote:
Is infinite growth of some meaningful quantity possible in a finite space? No scientist is inclined to think so, but economists habitually make this claim without bothering to defend it with anything but, "I'm, an economist and I say so", or perhaps more thoughtfully, "hey, it's worked until now".

This is almost flattery by insult. Finally,
I suggest that the core problem lies in our collective failure to consider what human decency means and to use that understanding to manage what money means. We don't have to listen to people who get that backwards.

I am not entirely sure I understand this last paragraph but it kind of sounds good.

The comments section of this post has some real gems. My favourite:

The economists think that we can somehow "buy" our way past climate change with their fictional money. The physical universe just doesn't work that way.

Rich Sweeny rides to the rescue with his post:
Can’t we all just get along? [Common Tragedies]

I’d like to point out that I certainly don’t believe that we should be categorically opposed to non-economic arguments. In fact interdisciplinary dialogue is imperative for solving most policy questions, including those related to the environment. At the end of the day, what matters is how good our answers are, not how we got there. Hopefully we can use this space to narrow some of the economist/ non-economist divide.

Good luck. He ends with the line:
Though the tools of economists may be imperfect, I don’t think we should abandon rational decision making and the pursuit of progress, however imperfectly defined, just yet.

What is interesting to note is that clearly economics still needs some serious PR. I suspect the general public just don't like what we have to say and throwing off our dismal image may take a few more decades (if of course the earth can sustain life that long) ;-)


Wednesday, January 02, 2008

Agriculture and Climate Change

Excellent sources of data and code for PhD and MSc dissertation students.

This makes the agriculture and climate change debate accessible and contains a wealth of information.

This is an important debate with a long way to run.

Potential Impacts of Climate Change on Crop Yields and Land Values in U.S. Agriculture:
Negative, Significant, and Robust

(H/T: Matthew Kahn)

Tuesday, January 01, 2008

Globalization seen as BAD by a majority of US

It is remarkable that that the country that has arguably gained the most from globalisation has this view. There are many academic studies examining the relationship between inequality and globalisation and the link between job changes and trade (including some of my own work). Of course there will be winners and losers - it is just surprising that one of the biggest winners see themselves as losers.

The question is "framed" to get a negative answer of course and is part of the problem.

If the question was "Do you think you have benefited from the increased availability of cheap products allowing you to consume much more than before" you might have got a different answer.

In my opinion the 58% of the respondents are simply wrong.

From PollingReport.com (H/T Greg Mankiw)


"Do you think the fact that the American economy has become increasingly global is good because it has opened up new markets for American products and resulted in more jobs, or bad because it has subjected American companies and employees to unfair competition and cheap labor?"



NBC News/Wall Street Journal Poll conducted by the polling organizations of Peter Hart (D) and Bill McInturff (R). Dec. 14-17, 2007. N=approx. 500 adults nationwide. MoE ± 4.4.

Greg Mankiw suggests:

I doubt, however, that a more economically literate rewording of the question would have found the American public sympathetic to globalization.