Thursday, May 22, 2008

Apocalypse Again

Hot on the heels of "Apocalypse Now" comes "Apocalypse Again". You can never have enough apocalyptic posts in my experience. This time the social anthropologist Dr Benny Peiser from Liverpool John Moores University weighs in.

One revelation of this article is finding out that there is a magazine called "The End is Nigh".

The magazine by-line is "The End is now - official magazine of the apocalypse: Predicting the end since 2005".

If that were not "ironic" enough when one clicks on the link however one gets the following message:

"The End Is Nigh is undergoing a re-fit but will be back in February... watch this space!"

Is this deliberate irony? The idea of the "end is nigh" magazine telling us to come back later is pure genius.

I digress, the Benny Peiser post is a transcript of an interview he gave to the "End is Nigh".

I have picked out a few of the questions. Click to read the answers.

The New Age of Apocalypticism [Die Achse des Guten]

John Reppion: What do you think it is that drives us as human beings to constantly prophesise and predict the end of the world?

John Reppion: Do you think then, that when things are on the up and up, people are inclined to think positively but once economic growth reaches a plateau then people have more of a tendency to start focusing on the bad things?

John Reppion: What effect do you think the millennium had in terms of focusing people’s minds on a specific date for a potential disaster?

John Reppion: That brings me on quite nicely to the issue of climate change. You’re known as somebody who doesn’t necessarily buy into the popular ideas of man made climate change in terms of the way things are being portrayed in the tabloids and on television. What do you make of this government’s ideas about a carbon budget?

John Reppion: There is the argument that the idea of CO2 emissions contribution to global warming is being used politically to keep the developing countries such as India and China down.

John Reppion: Moving on from global warming then, you have said in the past that “it is understandable that we try to put a positive spin on the ultimate threat Near Earth Objects pose to human survival” are we deluding ourselves about our ability to defend ourselves from NEOs?

John Reppion: What do you think is actually the greatest threat to the survival of humanity at this time?


Apocalypse Now

Robert Skidelsky writes an "interesting" article on the relationship between science, religion and apocalyptic predictions. Economists also have a reputation for looking rather on the dismal side and this blog is no exception.

It is therefore interesting explore the psychology behind these apocalyptic tenancies.

We have covered this before 1 or 2 years ago but economists can rarely have enough doom and gloom. When this is added to a heady mix of religion and US fundamentalism a blog post is unavoidable.

He does make some reasonable points weighted towards a "climate change skeptic" stance but the fundamental flaw with his argument is that his reasoning the entire US should be buying into Al Gore's story. So why is the US the country that is the most violently skeptical?

Before one takes this article to be a rather extreme rant it is worth remembering that Robert Skidelsky is a member of the British House of Lords, is professor emeritus of political economy at Warwick University and a board member of the Moscow School of Political Studies.

What this says about the House of Lords is an entirely different political hot potato.

The apocalypse is the scientist’s fundamentalism [Taipei Times]

It was only to be expected that former US vice president Al Gore would give this month’s cyclone in Myanmar an apocalyptic twist.

“Last year,” he said, “a catastrophic storm hit Bangladesh. The year before, the strongest cyclone in more than 50 years hit China ...We’re seeing the consequences that scientists have long predicted might be associated with continual global warming.”

Surprisingly, Gore did not include the Asian tsunami of 2004, which claimed 225,000 lives. His not so subliminal message was that these natural catastrophes foreshadow the end of the world.

Apocalyptic beliefs have always been part of the Christian tradition. They express the yearning for heaven on earth, when evil is destroyed and the good are saved.

In their classical religious form, such beliefs rely on signs and omens, like earthquakes and sunspots, which can be interpreted — by reference to biblical passages — as portending a great cataclysm and cleansing. Thus, apocalyptic moments are products of a sense of crisis; they can be triggered by wars and natural disasters.

Classical apocalyptic thinking is certainly alive and well, especially in the US, where it feeds on Protestant fundamentalism, and is mass marketed with all the resources of modern media. Circles close to the Bush administration, it is rumored, take current distempers like terrorism as confirmation of biblical prophecies.


Today it is the West that foists an apocalyptic imagination on the rest of the world. Perhaps we should be looking to China and India for answers about how to address environmental damage, instead of using climate change as a pretext to deprive them of what we already have. How do the Chinese feel about their newfound materialism? Do they have an intellectual structure with which to make sense of it?

The best antidote to the doom merchants is skepticism. We must be willing to take uncertainty seriously. Climate change is a fact. But apocalyptic thinking distorts the scientific debate and makes it harder to explain the causes and consequences of this fact, which in turn makes it harder to know how to deal with it.

The danger is that we become so infected with the apocalyptic virus that we end up creating a real catastrophe — the meltdown of our economies and lifestyles — in order to avoid an imaginary one. In short, while a religious attitude of mind deserves the highest respect, we should resist the re-conquest by religion of matters that should be the concern of science.

Tuesday, May 20, 2008

Malthus is back

Thomas Malthus has been much maligned by economists but according to the New Yorker the current world food crisis means he is making a come back. Back in the 18th century English parsons were at the cutting edge of economic research.

One quick counter argument is that supply will simply increase as a result of increased prices and we will soon get back to a long run, cheap food equilibrium.

Quotes like this are also like golden nuggets to an economist.

The world seemed to have been liberated from a Malthusian “long night of hunger and drudgery.”

Our current food predicament resembles a Malthusian scenario—misery and famine—but one largely created by overproduction rather than underproduction.

But let us given Malthus his moment in the sun. This is a long 4 page article that is well worth reading in full. Excellent writing and referencing.

H/T: Environmental and Urban Economics

The Last Bite: Is the world’s food system collapsing? [New Yorker]

In his “Essay on the Principle of Population,” of 1798, the English parson Thomas Malthus insisted that human populations would always be “checked” (a polite word for mass starvation) by the failure of food supplies to keep pace with population growth. For a long time, it looked as if what Malthus called the “dark tints” of his argument were unduly, even absurdly, pessimistic. As Paul Roberts writes in “The End of Food” (Houghton Mifflin; $26), “Until late in the twentieth century, the modern food system was celebrated as a monument to humanity’s greatest triumph. We were producing more food—more grain, more meat, more fruits and vegetables—than ever before, more cheaply than ever before, and with a degree of variety, safety, quality and convenience that preceding generations would have found bewildering.” The world seemed to have been liberated from a Malthusian “long night of hunger and drudgery.”


As of 2006, there were eight hundred million people on the planet who were hungry, but they were outnumbered by the billion who were overweight. Our current food predicament resembles a Malthusian scenario—misery and famine—but one largely created by overproduction rather than underproduction. Our ability to produce vastly too many calories for our basic needs has skewed the concept of demand, and generated a wildly dysfunctional market.

Now we turn to a fine example of an environmental externality that also employs a fine turn of phrase.

By contrast, the mainstream food economy is now dominated by monocultures in which crops and animals are kept apart. This system of farming has little use for poop, despite churning it out in ever-increasing volumes. The San Joaquin Valley has air quality as poor as Los Angeles, the result of twenty-seven million tons of manure produced every year by California’s cows. “And cows are relatively benign crappers,” Roberts points out; hogs—mass-produced to meet the demand for bacon on everything—are more prolific. On June 21, 1995, Roberts tells us, a hog lagoon burst into a river in North Carolina, destroying aquatic life for seventeen miles.


Is climate change the war to end all wars?

The Guardian's Rosie Boycott gives an impassioned plea on behalf of concerned middle class mothers for action on climate change.

The wording is evocative and takes the moral high ground. In a sense it is politics and by extension economics that is getting in the way.

On the subject of action from the UK government Rosie gets it spot on:

The government still seems to be terrified of motorists, frequent flyers and second home-owners, and is far too timid to take any measures that begin to address the scale of the problem.

Labour are right to be timid. It is tough to blame the government when the vast majority of voters are motorists. Governments are elected to serve the people and the people want cheap petrol. It is a classic tragedy of the commons case.

Here are two of the more passionate paragraphs.

The war to end all wars [Guardian]

How do you define a war? There is the disastrous one that Britain is waging in Iraq, involving tanks and guns and the lives of our young men and women. There is the kind the government claims it is waging variously against poverty, terror, and obesity. But the greatest threat to us all, global warming - a threat far greater than any airborne disease or foreign dictator - has yet to be elevated to war status. Day by day, before our eyes, the planet is deteriorating: ice caps are melting, weather systems shifting, and the poorest are finding themselves facing life-threatening water shortages. Our wildlife is suffering, species are being lost before our children even have a chance to witness them in all their beauty.


After the Japanese bombed Pearl Harbour in 1941, the US threw its might behind the war machine, transforming its industries overnight. The bounties of my entire life as a postwar baby have come as a direct result of that giant political will bending towards the common good. Now my daughter's generation demands the same drastic intervention if they are to enjoy the same kind of future.

It can be done and we know the enemy. But where, on our increasingly fragile earth, is the leadership?

Where indeed.


Sunday, May 18, 2008

Global Warming and "Zones of Death"

Another irresistible headline. Zones of death sound just like the sort of thing economists should be interested in and then they are a result of global warming, a blog post if inevitable.

The term "Marine graveyards" also has a certain ring to it.

Zones of death are spreading in oceans due to global warming [Times]

Marine dead zones, where fish and other sea life can suffocate from lack of oxygen, are spreading across the world’s tropical oceans, a study has warned.

Researchers found that the warming of sea water through climate change is reducing its ability to carry dissolved oxygen, potentially turning swathes of the world’s oceans into marine graveyards.

The study, by scientists from some of the world’s most prestigious marine research institutes, warns that if global temperatures keep rising there could be “dramatic consequences” for marine life and for humans in communities that depend on the sea for a living.

This is a suitably gloomy scenario where fish stocks die leaving humans with a serious shortage of food leading to a dramatic decline in the human population and suffering for billions.

The article concludes with a comparison with 250 million years ago - a time series in excess of that in the average economics paper.

Recent research has revealed that about 250m years ago average oxygen levels in oceans fell almost to zero – a reduction associated with dramatic changes in climate that resulted in the extinction of 95% of the world’s species.

We are clearly all doomed.

Saturday, May 17, 2008

Energy efficiency: "The Fifth Fuel" and the "negawatt"

I like the "5th fuel" catchphrase to describe energy efficiency. Clearly, this is largely meaningless but I like it nonetheless. This is also the first time I have come across the term "negawat". A fine phrase indeed.

I really need to get up to date with my lingo. "Wonkish" is another term I am not overly familiar with. Are those in "Wonkish" circles known as "wonkers"?

The Economist investigate:

The elusive negawatt [Economist]

IN WONKISH circles, energy efficiency used to be known as “the fifth fuel”: it can help to satisfy growing demand for energy just as surely as coal, gas, oil or uranium can. But in these environmentally conscious times it has been climbing the rankings. Whereas the burning of fossil fuels releases greenhouse gases, which contribute to global warming, and nuclear plants generate life-threatening waste, the only by-product of energy efficiency is wealth, in the form of lower fuel bills and less spending on power stations, pipelines and so forth. No wonder that wonks now tend to prefer “negawatts” to megawatts as the best method of slaking the world's growing thirst for energy.

Almost all blueprints for tackling global warming assume that energy efficiency will have a huge role to play. Nicholas Stern devoted a whole chapter to it in the report he wrote on climate change for the British government. In the greenest of futures mapped out by the International Energy Agency, a think-tank financed by rich countries, greater efficiency accounts for two-thirds of emissions averted. The McKinsey Global Institute (MGI), the research arm of the consultancy, thinks that energy efficiency could get the world halfway towards the goal, espoused by many scientists, of keeping the concentration of greenhouse gases in the atmosphere below 550 parts per million.

This long article concludes:

However, no matter what methods governments adopt to encourage energy efficiency, the results may not be as impressive as they imagine. The culprit is something called the “rebound effect”. Falling demand for electricity or fuel brought on by an efficiency drive should lead to lower prices. But cheaper energy, in turn, is likely to prompt greater consumption, undermining at least some of the original benefits. What is more, consumers with lower electricity or fuel bills often put the money they have saved to some other use, such as going on holiday or buying an appliance, which is likely to involve the consumption of fuel and power.

Economists disagree about the size of the rebound effect, which is hard to measure. The British government commissioned two studies of the effect, from two different universities. The first found that it cancelled out roughly 26% of the gains from energy-efficiency schemes; the other put the figure at 37%. Either way, negawatts are worth pursuing. But they are unlikely to satisfy the world's thirst for energy to the extent their advocates assume.


Friday, May 16, 2008

The world in a fat lot of trouble

The world's obese get blamed for a lot - now they are picking up the tab for global warming. The BBC report. Blaming the obese for the world's food shortage appears to be a rather cheap (if not logical) shot.

If all those considered over weight stopped eating immediately I doubt that food prices would plummet although it might be easier to get a seat in a fast food restaurant.

If I was asked how many calories, above average, obese people consume I would have guessed higher than the figure mentioned below. Have a guess before reading on.

Getting hammered for additional fuel use is really rubbing it in.

Obese blamed for the world's ills [BBC]

Obese people are contributing to the world food crisis and climate change, experts say.

The London School of Hygiene and Tropical Medicine calculated the obese consume 18% more calories than average.

They are also responsible for using more fuel, which has an environmental impact and drives up food prices as transport and agriculture both use oil.

The result is that the poor struggle to afford food and greenhouse gas emissions rise, the Lancet reported.

It comes as the World Health Organization predicts the obese population will double by 2015 to 700m.

In the UK, nearly a quarter of adults are classed obese, twice as many as there were in the 1980s.

The team found that obese people require 1,680 daily calories to sustain normal energy and another 1,280 to maintain daily activities - a fifth more than normal.

The higher consumption of food has a two-fold effect, researchers said.

First of all the increasing demand for food, drives up production.

This means that agricultural processes are using more oil to meet demand, which contributes to the rising cost of fuel.

The cost of fuel is then passed on in the cost of food, making it more difficult for poorer areas to afford it.


What is more, the researchers said obese people are likely to rely on transport more and put more strain on that transport because of their mass, which again drives up prices and usage.

I suspect the authors of this report will soon find their mail bags bulging.

Thursday, May 15, 2008

800,000 year high for Greenhouse Gases

Headlines with scary numbers always appeal to me. It begs the question of how do they know this and how accurate this figure is but I am sure the article will tell me. More importantly, what does it mean? A first guess is that the answer is unlikely to be a happy one for mankind.

Greenhouse Gases Highest For 800,000 Years-Study [PlanetArk]

OSLO - Greenhouse gases are at higher levels in the atmosphere than at any time in at least 800,000 years, according to a study of Antarctic ice on Wednesday that extends evidence that mankind is disrupting the climate.

Edit: After reading the article I am not really any the wiser on any of my earlier questions.


Wednesday, May 14, 2008

"Analysis of U.S. Greenhouse Gas Tax Proposals"

We tend to steer clear of the endless discussion of US greenhouse gas tax proposals as they are extensively covered elsewhere. Env-econ and Mankiw appear to me to post on this topic almost daily.

However, a recent NBER research paper is worth highlighting.

"Analysis of U.S. Greenhouse Gas Tax Proposals"

NBER Working Paper No. W13980

GILBERT E. METCALF, Tufts University - Department of Economics, National Bureau of Economic Research (NBER)
SERGEY PALTSEV, Massachusetts Institute of Technology (MIT)
JOHN M. REILLY, Massachusetts Institute of Technology (MIT) - Joint Program on the Science and Policy of Global Change
Email: jreilly@MIT.EDU
HENRY D. JACOBY, Massachusetts Institute of Technology (MIT) - Sloan School of Management
JENNIFER F. HOLAK, Massachusetts Institute of Technology (MIT) - Joint Program on the Science and Policy of Global Change

The U.S. Congress is considering a set of bills designed to limit the nation's greenhouse gas (GHG) emissions. This paper complements the analysis by Paltsev et al. (2007) of cap-and-trade bills and applies the MIT Emissions Prediction and Policy Analysis (EPPA) model to carry out an analysis of the tax proposals. Several lessons emerge from this analysis. First, a low starting tax rate combined with a low rate of growth in the tax rate will not reduce emissions significantly. Second, the costs of GHG reductions are reduced with the inclusion of non-CO2 gases in the carbon tax scheme. Third, welfare costs of the policies can be affected by the rate of growth of the tax, even after controlling for cumulative emissions. Fourth, a carbon tax - like any form of carbon pricing - is regressive. However, general equilibrium considerations suggest that the short-run measured regressivity may be overstated. Additionally, the regressivity can be offset with a carefully designed rebate of some or all of the revenue. Finally, the carbon tax bills that have been proposed or submitted are for the most part comparable to many of the carbon cap-and-trade proposals that have been suggested. Thus the choice between a carbon tax and cap-and-trade system can be made on the basis of considerations other than their effectiveness at reducing emissions over some control period.


Earthquakes and dams

Dams in China are controversial. The costs are already well documented but perhaps the biggest environmental danger is the relationship between earthquakes and dams which is especially pertinent given recent events in China.

This is the first time I have read that dams may be the cause of earthquakes - another point to clock up in the negative column.

TreeHugger have written a good piece on this:

China Earthquake Threatens Nearby Dams, Environment [TreeHugger]

The human impact of China's most devastating natural disaster in three decades, which is estimated to have claimed at least 12,000 lives, may not be fully known for weeks. Thankfully, no damage has been reported at the Three Gorges Dam, the world's largest, situated some 700 km east of the epicenter (map here). If the quake had affected the dam, the human toll would be even harder to imagine.

The dam sits above some 15 million people (some of whom are already suffering from soil erosion that can lead to landslides). Last September, government officials joined the dam's critics in raising the alarm about potential dangers, among them that the dam itself could trigger quakes as it sits near a number of fault lines. A burst at the Three Gorges would, says engineer Philip Williams, former president of the San Francisco-based International Rivers Network, “rank as one of history’s worst man-made disasters.”

More on the link between dams and earthquakes:

Though Monday's disastrous earthquake was a result of tectonic collision, there are fears that the Three Gorges Dam could trigger earthquakes on its own. Its reservoir sits on two major faults, which can be aggravated by changes in water level, and recently relocated residents have reported landslides, mudslides and ominous cracks in the ground. According to a March 2008 article in Scientific American by Mara Hvistendahl,

Engineers in China blame dams for at least 19 earthquakes over the past five decades, ranging from small tremors to one near Guangdong province's Xinfengjiang Dam in 1962 that registered magnitude 6.1 on the Richter scale—severe enough to topple houses.
Surveys show that the Three Gorges region may be next. Chinese Academy of Engineering scholar Li Wangping reports on the CTGPC's Web site that the area registered 822 tremors in the seven months after the September 2006 reservoir-level increase.

Meanwhile, upstream from the Three Gorges along the Jinsha river, a section of the Yangtze, at least a dozen new dams are being built in order to alleviate sedimentation caused by the Three Gorges reservoir. They too lie in the same seismic region as Monday's earthquake. As a geologist told the Guardian in 2003 of the area, "The Jinsha has bad geological conditions, and there is a more severe seismic area upriver from Xiangjiaba [the site of the furthest downstream of the four dams]." Near this site dam projects "should not be encouraged," he said.

Something to think about...

Saturday, May 10, 2008

Economics of the Global Food Trade

Following on from the Krugman posts on lumpy trade the efficiency of the global transport network is again in the headlines. This time related to food transportation and how the current network leads to some perverse stories of product shipments.

We are used to factor price differentials driving the relocation of manufacturing but the link to food production is rarely considered.

The New York Times had a look at this:

Environmental Cost of Shipping Groceries Around the World [New York Times]

Cod caught off Norway is shipped to China to be turned into filets, then shipped back to Norway for sale. Argentine lemons fill supermarket shelves on the Citrus Coast of Spain, as local lemons rot on the ground. Half of Europe’s peas are grown and packaged in Kenya.


Increasingly efficient global transport networks make it practical to bring food before it spoils from distant places where labor costs are lower. And the penetration of mega-markets in nations from China to Mexico with supply and distribution chains that gird the globe — like Wal-Mart, Carrefour and Tesco — has accelerated the trend.

The cost of this labour cost saving is the externalities associated with this increased traffic.

But the movable feast comes at a cost: pollution — especially carbon dioxide, the main global warming gas — from transporting the food.

Under longstanding trade agreements, fuel for international freight carried by sea and air is not taxed. Now, many economists, environmental advocates and politicians say it is time to make shippers and shoppers pay for the pollution, through taxes or other measures.

Why Dr Watkiss focused on waffles is not clear but waffles do have a comedy element to them so perhaps that is why.

“We’re shifting goods around the world in a way that looks really bizarre,” said Paul Watkiss, an Oxford University economist who wrote a recent European Union report on food imports.

He noted that Britain, for example, imports — and exports — 15,000 tons of waffles a year, and similarly exchanges 20 tons of bottled water with Australia. More important, Mr. Watkiss said, “we are not paying the environmental cost of all that travel.”

The UK figures are somewhat surprising.

Britain, with its short growing season and powerful supermarket chains, imports 95 percent of its fruit and more than half of its vegetables. Food accounts for 25 percent of truck shipments in Britain, according to the British environmental agency, DEFRA.

I suspect that we will see further EU regulation in this area. Even a polluter pays tax will not change the economics - it will still be cheaper to ship the fish from Norway to China and back again.


Friday, May 09, 2008

Economic Risks From Species Loss

Ahead of a UN conference on biodiversity in Bonn, Germany in 10 days time, the standard pre-conference press release hits the streets.

As an economist the whole bio-diversity loss argument is not as simple as you might think. If some obscure mammal, bird on insect dies out in Brazil due to de-forestation what is the economic cost to you and me? Arguably nothing expect the extraordinary long odds that one of these species held the key to the cure for cancer of some equally scary disease and the "love of variety" argument where we gain utility from seeing said insets or birds in real life or more likely on television. This has to weighed against the economic reasons for the original loss - in this case deforestation which occurred in the first place due to the economic necessity of local people who are just trying to survive.

The fishery issue is slightly different and is what is alluded to in this article. Clearly if fish stocks fall below a certain level it will impact on the food resources for millions. This is already happening but is less about bio-diversity and more about over fishing.

Germany Warns Of Economic Risks From Species Loss [PlanetArk]

BERLIN - Nations must act to slow extinction rates, German Environment Minister Sigmar Gabriel said on Thursday, arguing the loss of species threatened food supplies for billions of people.


Gabriel, due to open the Bonn summit, pointed to marine life as an example.

"If we don't do anything, there won't be any more commercial fishing by 2050. Imagine what that means for the world's food supplies," Gabriel said, noting several billion people rely on protein from fish to survive.

UN experts say human activity, including the emission of greenhouse gases, threatens to cause the worst spate of extinctions on earth since the dinosaurs died out 65 million years ago. Some experts say three species disappear every hour.


Thursday, May 08, 2008

Climate Change fatigue

Bored of reading this blog - you might be suffering from Climate change fatigue. I can certainly feel it kicking in every now and then.

The Guardian address this issue with a conference in its honour.

Fighting climate change fatigue: Keeping stakeholders engaged [Guardian]

With increasing political and public awareness about climate change, the debate has moved on. The public are willing to make changes, but mixed messages have led to confusion and fatigue. Leading businesses realise that now is the time for collaboration - with each other, with government, with NGO’s and individuals.

The Guardian Climate Change Summit will bring together senior executives and decision makers to discuss strategies to keep stakeholders engaged and fight against climate change.


Black Rain in China

An interesting set of photographs and commentary looking at coal mining in China.

Ian Teh


Wednesday, May 07, 2008

Lazy, short-sighted and irresponsible

When I first saw this headline under "environmental guardian" I wondered whether this was really from the "education" part of the paper that had somehow got misplaced. Alas, it really was all about UK targets that has again upset one green group or another.

Lazy, short-sighted and irresponsible [Guardian]

A leaked government memo to British MEPs about how the UK plans to reach the EU's ambitious target of increasing its use of renewables in energy consumption tenfold to 15% by 2020 from the current 1.5% has provoked anger and disbelief among green campaigners.

"Lazy, short-sighted and irresponsible," is how Caroline Lucas, Green MEP, describes it.

The memo recommits Britain to its target (part of an overall EU one of 20%) but is shot through with references to "cost-efficiency" (seven) and "flexibility" (14) - and demands more of both, with officials refusing to say what that means. It suggests that ministers plan to trade their way to the target, importing renewable energy from elsewhere in the EU - Romania perhaps - and even outside Europe.

Tuesday, May 06, 2008

Baldies against air pollution

A quick survey of the Economics department at Birmingham provides only partial support for this story unless some staff members are involved in a cover up.

Any jobs going in a nice rural University?

Staff at Birmingham

Pollution sends men bald [daily Telegraph]

Men living in polluted areas are more likely to go bald than those breathing cleaner air, a new study suggests.

The ground breaking research, by academics at the University of London, has linked the onset of male pattern baldness, to environmental factors, such as air pollution and smoking.

The scientists believe toxins and carcinogens found in polluted air can stop hair growing by blocking mechanisms that produce the protein from which hair is made. Baldness is known to be hereditary, but the new research suggests that environmental factors could exacerbate hair loss.

Sunday, May 04, 2008

Magic Mushrooms and pollution control

A blog post title I thought I would never write but Celsias manage it.

Talking about serious ground pollution in regions of the US:

magic-mushrooms-can-fungi-help-clean-up-pollution [Celsias]

The New York Times reports that many residents of the city would like to try a different method: mushrooms. Yes, you read that last part right: mushrooms. If you didn’t know any better, you might be tempted to write these folks off as a bunch of old hippies on a crazy mushroom trip. Well, put this in your pipe and smoke it — many species of mushrooms are actually powerful bioremediators, natural organisms that help break down pollutants. They colonize contaminated soil, and then secrete enzymes that break down the offending chemicals into nontoxic components. The result is clean soil and lots of mushrooms.

Do the mushrooms taste any different?


Krugman's lumpy posts on trade

Apologies - a research reminder to myself. This is globalisation at work and raises many questions that need empirical economists to look at more closely. These posts should be of interest to many though as evidenced by the comments to Krugman's posts.

These are Paul Krugman's two posts on shipping costs and trade.

The world is lumpy [NT Times]

In response to this Hummels quote:

Minimum efficient scale in shipping is significant. The capacity of a modern container ship is large relative to the export volumes produced by smaller countries, and there are substantial economies of scope in offering transport services over a network of ports. One way to see this effect is to calculate the number of carriers operating on a particular trade route. In the fourth quarter 2006 one in six importer-exporter pairs world-wide was served by a single direct liner “service”, meaning that only one ship was operating on that route. Over half of importer-exporter pairs were served by three or fewer ships, and in many cases all of the ships on a route were owned by a single carrier

Krugman states correctly in my view:

I know, it’s not world-shaking, but I always think it’s interesting to get a sense of the physical reality of trade, which is a lot less seamless than we tend to think.

His second post puts a little meat on the bones of the first post.

A bit more about lumps [NY Times]

I realized that my previous post didn’t explain why we were talking about shipping and all that. Our conversation concerned an empirical problem with the Eaton-Kortum model of international trade, which was the basis of the big lecture.


China's environmental freedom of information act 2008

A potentially important milestone was passed this week in China although it passed me by initially.

Your right to know: a historic moment [China Dialogue]

The Measures on Open Environmental Information (for Trial Implementation) will be effective from May 1, 2008, and will provide a powerful tool to promote the public right to know in China.

As an agency that pays unusual attention to public participation, it is no surprise that China’s State Environmental Protection Administration (SEPA) – now the Ministry of Environmental Protection (MEP) – became the first ministry to respond with its own measures, based on China’s Regulations on Open Government Information, which were introduced by the State Council in January 2007 and aim to increase government transparency by allowing citizens and organisations to lawfully obtain government information.

The huge number of potential questions that can be asked mean that this is an important development. See this excellent article for details.

Saturday, May 03, 2008

The Globalization fallacy

My undergraduate and postgraduate dissertation students all write their essays on "The Economics of Globalisation". This tends to be a popular choice.

One common fear is the extent to which globalisation is the cause of job losses in the developed world. The initial hurdle to overcome is to define what we mean by "globalisation".

The complex nature of the relationship between falling trade barriers, trade, jobs and technology are discussed in this recent NY times opinion piece by David Brooks. This article links back to the "The World is Flat" book by Thomas L. Friedman (an excellent read).

The Cognitive Age [NY Times]

If you go into a good library, you will find thousands of books on globalization. Some will laud it. Some will warn about its dangers. But they’ll agree that globalization is the chief process driving our age. Our lives are being transformed by the increasing movement of goods, people and capital across borders.

This is a reasonable start and why this topic can spawn a 1000 essays. Brooks then goes on to describe the political backdrop to the usual globalisation pub conversation.

New dynamos like India and China threaten American dominance thanks to their cheap labor and manipulated currencies. Now, everything is made abroad. American manufacturing is in decline. The rest of the economy is threatened.

What is truly scary is how globalisation is being dragged into the race for the White house. How much of this does Clinton really believe and how much is pandering to the "people" and their media driven misconceptions.

Hillary Clinton summarized the narrative this week: “They came for the steel companies and nobody said anything. They came for the auto companies and nobody said anything. They came for the office companies, people who did white-collar service jobs, and no one said anything. And they came for the professional jobs that could be outsourced, and nobody said anything.”

The same could be said of the UK. No steel industry left, ship building clinging on by an oar and the coal industry all but gone. The decline in the number of manufacturing jobs is what tends to hit the headlines with China and India getting the blame.

Brooks next two paragraphs begin to get a little hazy although the basic premise is correct:

Globalization is real and important. It’s just not the central force driving economic change. Some Americans have seen their jobs shipped overseas, but global competition has accounted for a small share of job creation and destruction over the past few decades. Capital does indeed flow around the world. But as Pankaj Ghemawat of the Harvard Business School has observed, 90 percent of fixed investment around the world is domestic. Companies open plants overseas, but that’s mainly so their production facilities can be close to local markets.

Nor is the globalization paradigm even accurate when applied to manufacturing. Instead of fleeing to Asia, U.S. manufacturing output is up over recent decades. As Thomas Duesterberg of Manufacturers Alliance/MAPI, a research firm, has pointed out, the U.S.’s share of global manufacturing output has actually increased slightly since 1980.

Now this is where I begin to disagree and in a sense Brooks already knows the issue I will raise:

The chief force reshaping manufacturing is technological change (hastened by competition with other companies in Canada, Germany or down the street). Thanks to innovation, manufacturing productivity has doubled over two decades. Employers now require fewer but more highly skilled workers. Technological change affects China just as it does the America. William Overholt of the RAND Corporation has noted that between 1994 and 2004 the Chinese shed 25 million manufacturing jobs, 10 times more than the U.S.

The point here is correct but the key is the sentence "hastened by competition...". This is precisely why the benefits of globalisation are overlooked. This competition is a result of globalisation itself. Each and every country learns from the other because trade barriers have come down and trade has gone up (and of course hastened by technological progress). This is an endogenous process. Globalisation leads to technological improvements which leads to productivity growth which leads to more trade and so on and so forth.

The problem is that Brooks gives globalisation none of the credit and instead plumps for "skills". Again, this statement is true but WHY are they forced to become more skilled - clearly it is a result of competitive pressures that are a result of globalisation.

The central process driving this is not globalization. It’s the skills revolution. We’re moving into a more demanding cognitive age. In order to thrive, people are compelled to become better at absorbing, processing and combining information. This is happening in localized and globalized sectors, and it would be happening even if you tore up every free trade deal ever inked.

His concluding statement gets closer to the real issue. They are by no means contradictory and I would argue that they are not even different paradigms. It is time for globalisation to get a little more credit.

It’s not that globalization and the skills revolution are contradictory processes. But which paradigm you embrace determines which facts and remedies you emphasize. Politicians, especially Democratic ones, have fallen in love with the globalization paradigm. It’s time to move beyond it.

Friday, May 02, 2008

National Geographic does China

A special issue of National Geographic has China special issue. The pictures are excellent but the story is more interesting.

I suspect this is the reality in China - money and survival worries take precedent over the environment and summaries in one line why an international agreement on emissions will be very hard to reach.

H/T: China Economics Blog for the final paragraph

Most telling from an economic perspective is the final paragraph in response to a questionnaire sent out to the authors old students:

I asked what worried them the most. Several mentioned relationships; one woman wrote: "The marriage is not safe any more in China, it is more common for people around here to break up." A couple of respondents who now work far from home were concerned about their status as migrants. "I am like a foreigner in China," Willy wrote. But the most common source of worry seemed to be mortgage payments. "Ten years ago, I worried that I could not have a good and warm family," Belinda wrote. "Now I am worried about my loan at the bank." None of her classmates expressed concern about political reform, foreign relations, or any other national issue. Nobody mentioned the environment.

Rising environmental regulations in China

The relationship between environmental regulations and competitiveness underlies a lot of our academic work.

A recent blog post over at China Environmental Law ponders a recent article.

Exporters Confront Rising Environmental Costs [CRIEnglish]

Chinese manufacturers have seen their costs for environmental protection rise, in many ways, since the government raised the standards over the past year.

Companies that were identified as violating environmental laws were barred from the Canton Fair, or the China Import and Export Fair, during a penalty period, said fair spokesman Xu Bing.

One such company was Jilin Fudun Timber Co., Ltd., a timber company, which was placed on a blacklist by environmental regulators last year.

The Canton Fair is the most important channel for Chinese exporters to expand overseas, so a ban means big losses.

China has conducted special campaigns against polluting companies since last year. And violators have lost more than just export opportunities: blacklisted firms find it difficult to get loans. The State Environmental Protection Administration, now the Ministry of Environmental Protection, along with the central bank and the Banking Regulatory Commission, jointly issued a "green loan" policy in July that banned loans to blacklisted companies.

It is easier to just cut to the China Environmental Law for a commented version (saving me the work).

Happy May Day! [China Environmental Law]


How much CSR is enough?

Corporate social responsibility (CSR) ha been a business buzz word for a while now. The questions raised in a Development Crossing piece published today are good ones (even if the article itself is a little lightweight).

What exactly is CSR?
How much CSR is optimal?

This quote was what inspired me to post on this topic today.

Former Shell director Sir Geoffrey Chandler once said of “corporate social responsibility”: “I know of no phrase which has done more damage to constructive thought or caused greater confusion. It has encouraged the belief that a company’s responsibility to society lies in voluntary philanthropic add-ons, rather than the application of principle to all its activities.”

This second quote I need to remember as it justifies nicely the existence of this blog.

Three words capture the fundamental understandings of our age: “globalization” and “global warming”. Both concepts assume that actions have consequences far away in space and time from the actors. CSR requires corporations to grapple openly with the nature and context of their actions and effects.

This raises a number of interesting topics for discussion.

How much corporate social responsibility (CSR) is enough? How much CSR reporting is enough? [Development Crossing]


Telly Savalas Says Come to Birmingham

Whilst I hope that being taught by me on the undergraduate BSc Economics programme or MSc in Environmental Economics and Natural Resources would be enough to attract you to Birmingham, just in case this video cannot fail to tempt you.

At least you can now see the city where we work in full 1970's colour.

This is Telly Savalas (Kojak to younger or should that be older readers) selling Birmingham at a cinema near you.

Some observations:

1. Selling a motorway through the city as a positive point.
2. No cars on said motorways - now effectively a car park in rush hour.
3. All the modern buildings have been or are being pulled down (despite being built for the 21st century).
4. The over 40's dancing competition - Birmingham has still got it.
5. English pubs in shopping centres.
6. Modern rail terminal about to be pulled down.
7. There are some nice bits.
8. Taxis and buses are the same as now I am sure.

All I will say is that Birmingham is a little better now (although the heavily conjested motorways right through the middle of the city remain).


Thursday, May 01, 2008

Global Warming takes a polluted breather

Today's Daily Telegraph reports on the news from NATURE that global warming is on hold for 15 years cancelled out by natural cooling forces.

Global warming may 'stop', scientists predict [Daily Telegraph]

Global warming will stop until at least 2015 because of natural variations in the climate, scientists have said.

Researchers studying long-term changes in sea temperatures said they now expect a "lull" for up to a decade while natural variations in climate cancel out the increases caused by man-made greenhouse gas emissions.

Clearly, the quote in bold is not to be ignored. One never likes to see the word INITIAL and NEW COMPUTER MODEL coming before some very important results. So why are Nature publishing them?

Noel Keenlyside of the Leibniz Institute of Marine Sciences, Kiel, Germany, said: "The IPCC would predict a 0.3°C warming over the next decade. Our prediction is that there will be no warming until 2015 but it will pick up after that."

He stressed that the results were just the initial findings from a new computer model of how the oceans behave over decades and it would be wholly misleading to infer that global warming, in the sense of the enhanced greenhouse effect from increased carbon emissions, had gone away.

This whole episode brings me back to the role of the press and the media. Why academics would want to pour over 1000 newspaper articles as a means to furthering science is less clear but the conclusions are valid.

Scientists accuse tabloids of fuelling climate ignorance [inthenews]

Researchers say the matter is particularly worrying as consensus around human contributions to climate change has grown and the need for action has become increasingly urgent.

The accusations from researchers at the University of Oxford's Environmental Change Institute follow their study of nearly 1,000 tabloid articles from the Daily Mail, the Sun, the Daily Express and the Daily Mirror.

They analysed tone, framing techniques, the terms used, labelling of those quoted and relationships between messages.

Writing in the Institute of Physics Environmental Research Letters' journal, the researchers say about a quarter of coverage in the four UK tabloids from 2000 through 2006 misrepresented wide scientific agreement that man-made greenhouse gas emissions have very likely had a role to play in global warming.

Dr Max Boykoff, James Martin research fellow at the Environmental Change Institute, said there is a problem with the way scientific consensus is being reported in the tabloids.

"These newspapers have very high circulation and influence in the UK. We hope these findings help tabloid reporters and editors reflect further on the accuracy of their climate change reporting," he added.

"To the extent that balanced reporting and contrarian commentary have misrepresented scientific consensus on the issue of human contributions to climate change, there is a problem.

"We're all involved in the fight against climate change and it's in all of our interest to widen, rather than restrict, the spectrum of possibility for appropriate policy action."


Global Warming Insantity

Some may find amusing.

The articles behind the headlines are real enough though.

JEEM in the headlines: China number 1 CO2 polluter

It is not everyday that a JEEM paper gets the USAtoday headlines. Given the long lags at JEEM the results of this paper were probably generated over 2 years ago. Better late than never.

After probably spending weeks toiling over this paper grinding out the results he get this quote from Richard Carson:

Unless China sharply cuts its emissions, "the situation is pretty bleak," says Richard Carson of the University of California, co-author of a study in today's Journal of Environmental Economics and Management. "There's a lot less time to do something than people previously thought."


China now No. 1 CO2 offender [USAtoday]

WASHINGTON — China has overtaken the USA to become the world's No. 1 industrial source of carbon dioxide, the most important global-warming pollutant, according to a scientific study to be published today.

The study and two others — one recently published and another coming — agree that China's carbon-dioxide emissions surpassed those in the USA in 2006. That's decades earlier than had been predicted by the International Energy Agency four years ago.

All three studies examine emissions of carbon dioxide from the burning of fossil fuels such as coal. Energy usage is the most significant man-made source of carbon dioxide, which accumulates in the atmosphere and traps heat.

Unless China sharply cuts its emissions, "the situation is pretty bleak," says Richard Carson of the University of California, co-author of a study in today's Journal of Environmental Economics and Management. "There's a lot less time to do something than people previously thought."

China's total emissions in 2006 roughly tied U.S. emissions, according to another study in the April 24 issue of Geophysical Research Letters. But China's monthly production of carbon dioxide overtook the USA's in mid-2006, the study says. "Nobody could anticipate the rate of growth that's taken place in the last six or eight years in China," says Gregg Marland of Oak Ridge National Laboratory, one of the authors of that study.

Even better than this article that simply rehashes old news are the comments from USAtoday readers. I have to share a couple with you:

CO2 is not a pollutant. Somebody please put some real news on this page.
[by tq2]

China rapes the Earth of it's animals (sharks, tigers, bears, etc etc) so it is no big surprise they are polluting the air as well. If you think they are going to become "environmental" all of a sudden then you got rocks in your head.

The other comments are often funny, offensive and entirely wrong. If anything it makes it clear why the US was the biggest polluter until recently.

Things really are looking bleak.


Climate Economics: A Meta Analysis

Much has been written on the Economics of Climate Change since the Stern review.

Geoffrey Heal presents an overview of the work done so far and offers up a few suggestions for future work. Some interesting stuff.

Climate Economics: A Meta-Review and Some Suggestions

Columbia Business School; National Bureau of Economic Research (NBER) April 2008

NBER Working Paper No. W13927

What have we learned from the outpouring of literature as a result of the Stern Review of the Economics of Climate Change? A lot. We have explored the model space and the parameter space much more thoroughly, though there are still unexplored regions. While there are aspects of the Stern Review's analysis with which we can disagree, it seems fair to say that it has catalyzed a fundamental rethinking of the economic case for action on climate change. We are now in a position to give some conditions that are sufficient to provide a case for strong action on climate change, but need more work before we have a fully satisfactory account of the relevant economics. In particular we need to understand better how climate change affects natural capital - the natural environment and the ecosystems comprising it - and how these affect human welfare.

JEL Classifications: D8, D9, Q01