"The Killing Fields": How the economy is killing planet earth

This headline will come as no surprise to regular blog readers but now the New Scientist wants in on the act and have published a "special report".

The figures they use on the front page and illuminating but poorly constructed and generally pretty useless.

Students on my environmental economics course will have heard all this before ;-)

Special report: How our economy is killing the Earth [New Scientist]

THE graphs climbing across these pages (see graph, right, or explore in more detail) are a stark reminder of the crisis facing our planet. Consumption of resources is rising rapidly, biodiversity is plummeting and just about every measure shows humans affecting Earth on a vast scale. Most of us accept the need for a more sustainable way to live, by reducing carbon emissions, developing renewable technology and increasing energy efficiency.

But are these efforts to save the planet doomed? A growing band of experts are looking at figures like these and arguing that personal carbon virtue and collective environmentalism are futile as long as our economic system is built on the assumption of growth. The science tells us that if we are serious about saving Earth, we must reshape our economy.

This, of course, is economic heresy. Growth to most economists is as essential as the air we breathe: it is, they claim, the only force capable of lifting the poor out of poverty, feeding the world's growing population, meeting the costs of rising public spending and stimulating technological development - not to mention funding increasingly expensive lifestyles. They see no limits to that growth, ever.
“Economists see no limits to growth - ever”

In recent weeks it has become clear just how terrified governments are of anything that threatens growth, as they pour billions of public money into a failing financial system. Amid the confusion, any challenge to the growth dogma needs to be looked at very carefully. This one is built on a long-standing question: how do we square Earth's finite resources with the fact that as the economy grows, the amount of natural resources needed to sustain that activity must grow too? It has taken all of human history for the economy to reach its current size. On current form it will take just two decades to double.

In my first lecture John Stuart Mill gets a run out. The New Scientist explain more:

It is a vision John Stuart Mill, one of the founders of classical economics, would have approved of. In his Principles of Political Economy, published in 1848, he predicted that once the work of economic growth was done, a "stationary" economy would emerge in which we could focus on human improvement: "There would be as much scope as ever for all kinds of mental culture, and moral and social progress... for improving the art of living and much more likelihood of it being improved, when minds cease to be engrossed by the art of getting on."

Today's economists dismiss such ideas as naive and utopian, but with financial markets crashing, food prices spiralling, the world warming and peak oil approaching (or passed), they are becoming harder than ever to ignore.

There are a number of good and excellent articles in this special report that are worth reading although they tend, not surprisingly, to give a "non-mainstream" perspective and thus, need to be read as such.

Some articles are free, others not. Clearly the New Scientist are not above making some cold hard capitalist cash out of the death throws of the planet.

Read more:

Why politicians dare not limit economic growth (FREE FEATURE)

Harvesting renewable energy will help us to avert climate change without big changes to our lifestyles, right? Not without cutting consumption, says Tim Jackson

Interview: The environmental activist

Why do we fail to live within the constraints that nature has set for us, and fool ourselves things have never been better, asks environmental activist David Suzuki

Economics blind spot is a disaster for the planet

If we can't find a way to switch to a sustainable economy, we're heading for the ultimate crash Herman Daly

Interview: Champion for green growth (FREE FEATURE)

Gus Speth has influenced US environmental policy from the Supreme Court to the White House. He tells Liz Else why green values stand no chance against market capitalism

The trickle-down myth: Does growth really help the poor?

The argument that economic growth helps fight poverty is disingenuous and misguided, says economist Andrew Simms

We must think big to fight environmental disaster

As the ecological and financial crises mount, Susan George says our only option is to scale up positive actions to transform our economies

What would life be like in a land without growth?

What would a sustainable society actually be like? How would we make a living? And what would happen to all those bankers? New Scientist imagines the progress of a "steady state" economy 10 years after its inception

Nothing to fear from curbing growth

Breaking our dependence on profits and growth would make our lives better, not worse, says philosopher Kate Soper

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Is the financial crisis good or bad for deforestation? Lessons from history

The following is a guest post from Sjur Kasa (CICERO, OLSO).

This is a timely piece looking at the relationship between financial crises and the environment.

The crux of the argument is that a global recession has positive and negative effects on the environment. Clearly, slower growth means less resources (both renewable and non-renewable) but on the other hand, less resources will be given to "environmental groups" in the sense that the environment is perceived as a luxury.

Over to Sjur:

We are heading for hard times, what happens to deforestation? In this article I discuss the lessons from Brazil during the last financial crisis.

This is something to start thinking about: The supercycle of easy credit is over and the credit crunch is making things difficult for many developing countries. Recent reports suggest that several countries are on the brink of defaulting on their debt. This happens both because commodity markets are cooling down rapidly, and because credit is increasingly unavailable. What consequences could such a turn have for an environmental problem like deforestation?

Some lessons can be drawn from the last global financial crisis, the so-called Asia-Russia-Brazil crisis of 1997-1999. In a paper in Society and Natural Resources from 2005 (Society and Natural Resources 18(9)), Sjur Kasa and Lars Otto Naess from CICERO, an environmental research institute in Norway, looked at the consequences of the crisis that hit Brazil in 1998-99 for deforestation in the country's Amazon region. The relevance of this study may be seen now, when many developing countries are headed for financial problems again.

First, the negative effects of the crisis: The credit crunch in this period led to severe reductions in funding for the environmental agencies both at federal and state level. These agencies did indeed receive disproportional cuts, since they traditionally are less powerful in the budget infighting within the Brazilian government. The cutbacks also hit externally funded programmes like the PPG7 Pilot Programme due to absent Brazilian counterpart funding. This programme included several initiatives to curb deforestation and strengthen public and NGO efforts capacity in this respect. State and municipal programmes also most probably suffered because of harsh measures put in place to force them to produce surpluses that could be siphoned off to the federal state.

However, these negative effects should not be exaggerated. First, the environmental administration in Brazil, such as IBAMA, has been notoriously weak in controlling deforestation in Amazonia both due to organizational and financial problems. Second, in the Amazon, the crisis led to equally severe cutbacks of both public and private investments that would have actually enhanced deforestation. Plans to greatly expand infrastructure in the Amazon region adopted by the Cardoso government had to be temporarily halted alongside with private investment in agriculture due to skyrocketing interest rates and weakening domestic and international markets. nvironmental officials indeed called this "a breathing space" for the region, marking a welcome break in government efforts to "develop" the Amazon.

In addition to these effects, Brazil in this period also demonstrated the importance of a strong environmental movement. Alongside with the weakening of the public environmental administration, NGOs like Greenpeace, Friends of the Earth-Brazil and IPAM (Institute for the Study of Environment and Man in the Amazon) continued and expanded their activity on a series of innovative initiatives for curbing deforestation. Most interestingly, many of these initiatives were carried out in cooperation with still functioning parts of the environmental administration at state and federal level, often with external support. One example here is the satellite-assisted programme developed to control deforestation in Mato Grosso by the state's environmental authority FEMA in which local NGOs also played roles. Another
example was a number of forest certification initiatives supported by international NGOs that gained momentum just when the crisis picked up. In spite of the problems faced by the PPG7 assistance programme, the role of this as well as international donors like the World Bank and specific governments helped a lot by sustaining the activity of the NGOs and some environmental agencies.

Institutional stability and democracy also probably played a role in comparative terms. The Brazilian state continued to function as a shaky, but still conducive framework for the initiatives described above. Indonesia, where a political crisis led to the collapse of the Suharto regime, is an instructive contrast. Here, the destruction of the state made the activities of a much weaker environmental movement very difficult. On the Outer Island, where most of the valuable timber stands are located, local "resource mafias" moved in as the state lost control, contributing to very high levels of forest destruction in the period since.

Does this mean that financial crises are good for deforestation as long as you have strong NGOs, willing donors and a reasonably functioning democratic state? While this is one of the intriguing conclusions of our study, it does not come without important qualification. First, most developing countries do not have comparably affluent and willing donors and an environmental movement with the same sophistication as Brazil, meaning that the positive forces are probably much weaker in most cases. Second, the "breathing space" for the Amazon that we admit was provided by the credit crunch and the weakening global markets proved to be short-lived. Neither donors, NGOs nor public environmental authorities were able to prevent the rise of deforestation produced by the credit, soya and beef super-boom that emerged later in the 2000s. Again, this means that without expanding international cooperation on curbing deforestation and assisting environmental movements in developing countries in the coming years, any "breathing space" produced by the coming financial crisis in developing countries will prove short-lived.

Link to the full paper:

HERE.

"The Eliasch report": Rich to pay to stop deforestation?

This is an old story with a new spin.

This is a post from 25th September this year:

Rich to pay the poor to preserve forests?

Now we get a new UK based report that effectively says the same thing. The economics of this idea, where rich countries pay poor countries not to chop down tries is logically consistent. The problem comes with enforcement and ensuring that the money does not fall into the wrong hands. When the country of Congo is likely to be one of the largest recipients of the money you can appreciate why this scheme is close to being dead in the water.

The only new element to this report is the suggestion that carbon markets are the source of the cash. This is all well and good but one also has to wonder whether this act of "transferring cash" in this way will make the citizens and indeed governments of developed countries less likely to make an effort domestically (insulation, recycling etc.) as their guilt is already being mitigated by the existence of these carbon trading transfers.

Rich Countries Must Pay for Rainforests - UK Report [Planet Ark]

Rich countries should pay tropical nations billions of dollars a year to save their forests, using donor money and global carbon markets to foot the bill, said a UK-commissioned report on Tuesday.

In the longer-term, by 2030, developing countries should also start paying to help create "carbon neutral" global forests through binding targets to slow deforestation and plant trees.

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The report, "Climate Change: Financing Global Forests", firmly pinned hopes on the notion of carbon trading, where rich countries pay poor ones to cut carbon emissions, so that they can carry on polluting as normal.

"Deforestation will continue as long as cutting down and burning trees is more economic than preserving them," said Johan Eliasch, author of the report and Prime Minister Gordon Brown's special representative on deforestation.

There is no doubting the ambition of the report and the costings are useful.

Some critics said that the report's cost estimate of US$33 billion a year to halve deforestation by 2030 was too small.

Offsets would have to compensate farmers for not planting valuable crops such as palm oil.

That implied high prices, which made one expert doubt the report's claim that forestry offsets could halve costs for rich nations to fight climate change.

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The Eliasch report skirted the problem of corruption and illegal logging, said Simon Counsell, executive director at the green group the Rainforest Foundation.

The report recommended that rich country donors spend US$4 billion over five years for research, to fund local bodies, and resolve local land disputes.

"It really fails to appreciate just how serious and long-term these problems of corruption and governance actually are," said Counsell, adding they would take 10 years to address.

"In DRC (Democratic Republic of Congo) there's fewer than 10 people in the forestry department managing an area of forest twice the size of France. That's the reality on the ground."

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Mapping Poverty in Rural China: How Much Does the Environment Matter?

This is an interesting empirical approach I need to look at more closely. It is not entirely clear to me how closely environmental issues (rainfall, temperature etc.) are related to poverty levels.

This is an excellent paper with lots of colourful pictures.

Mapping Poverty in Rural China: How Much Does the Environment Matter?

Date: 2008-09-12
By: Susan Olivia (University of California, Davis)
John Gibson (University of Waikato)
Scott Rozelle (Stanford University)
Jikun Huang (Chinese Academy of Sciences)
Xiangzheng Deng (Chinese Academy of Sciences)

URL: http://d.repec.org/n?u=RePEc:wai:econwp:08/14&r=env
[PDF]

In this paper, we apply a recently developed small-area estimation technique to derive geographically detailed estimates of consumption-based poverty and inequality in rural Shaanxi, China. We also investigate whether using environmental variables derived mainly from satellite remote sensing improves upon traditional approaches that only use household survey and census data. According to our results, ignoring environmental variables in statistical analyses that predict small-area poverty rates leads to targeting errors. In other words, using environmental variables both helps more accurately identify poor areas (so they should be able to receive more transfers of poor area funds) and identify non-poor areas (which would allow policy makers to reduce poverty funds in these better off areas and redirect them to poor areas). Using area-based targeting may be an efficient way to reach the poor since many counties and townships in rural Shaanxi have low levels of inequality, even though, on average, there is more within-group than between-group inequality. Using information on locations that are, in fact, receiving poverty assistance, our analysis also produces evidence that official poverty policy in Shaanxi targets particular areas which in reality are no poorer than other areas that do not get targeted.
Keywords: China; environment; poverty; small area estimation
JEL: O15 O53 P36 Q56

Alaska's fishermen kicked in the Pollocks

Over fishing of Atlantic pollock will cause a run on fish fingers and imitation crab sticks (yum....) according to Greenpeace.

Given that we are currently witnessing the end of capitalism I particularly like the way that Greenpeace manage to weave in pollock stocks and the financial crisis. They don't miss a trick.

"Just as the financial institutions on Wall Street collapsed due to poor oversight and mismanagement, the pollock fishery is on the fast-track to collapse as well," Greenpeace said.

Fast food fish dishes are the staple of primary children everywhere and the McDonald's fish burger is even seen as a vaguely healthy option although this is lessened by the large coke and fries that often accompany said burger.

Alaska Pollock Fishery Near Collapse - Greenpeace [PlanetArk]

WASHINGTON - Stocks of Alaska pollock, a staple of the US fast food industry, have shrunk 50 percent from last year to record low levels and put the world's largest food fishery on the brink of collapse, environmental group Greenpeace said on Friday.

Taina Honkalehto, a research fishery biologist with the US National Marine Fisheries Service, said pollock biomass in US waters was down to 940,000 tons from 1.8 million tons last year.

Pollock is used in McDonald's fish sandwiches, frozen fish sticks, fish and chips and imitation crabmeat. It also helps feed fur seals, whales and the endangered Steller sea lions.

Pollock stocks have been unable to reproduce quickly enough to recover from yearly catch of 1 million tons, environmentalists say.

"Just as the financial institutions on Wall Street collapsed due to poor oversight and mismanagement, the pollock fishery is on the fast-track to collapse as well," Greenpeace said.

A collapse of the fishery would have hurt Alaska's commercial fishermen and coastal communities that depend on the sea for income.

"Economic pressures to keep on fishing at such high levels have overwhelmed common sense," said Jeremy Jackson, director of the Center for Marine Biodiversity and Conservation at the Scripps Institution of Oceanography, in a statement.

Jackson recommended a "far more precautionary, ecosystem-based approach" to fisheries management.

Greenpeace has called for the North Pacific Fishery Management Council to cut the catch in half for pollock when it meets in December to set limits for 2009.

The 2008 catch limit was set at 1 million tons last December, a 28 percent cut from the 2007 limit.

"We are on the cusp of one of the largest fishery collapses in history," said John Hocevar, Greenpeace's oceans campaign director. "It may still be possible to prevent disaster."

The group also advised that fishing on spawning populations be suspended and marine reserves be created to protect pollock habitats as the fishery has seen poor juvenile survival rates for several years. (Reporting by Jasmin Melvin; Editing by Marguerita Choy)

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Why do economists blog?

A good question and something that Dani Rodrik (Harvard) has previously looked at. This time environmental economics blog and 26econ have joined forces to present a few slides on blogging trends.

The results are interesting. I account for 2 of the observations which is a little worrying given the total number of observations.

Globalisation and the environment get a honourable mention in the presentation as we previously placed environmental economics as the number 1 environmental economics blog.

TOP ENVIRONMENTAL ECONOMICS BLOGS [Globalisation and the environment].

All students of environmental economics are encouraged to check these sites out.

Here is the PDF presentation of the Schiff and Whitehead presentation.

Some Economics of Economics Blogs[PDF]

It will be interesting to see if this ever gets published. I must say I am a little dubious about the quality of the data ;-)

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Disease and Global Warming - "the deadly dozen"

There is considerable debate about the effect of global warming on the spread of diseases. Try to remember that there is a close relationship between poverty and disease as well as between disease and climate.

That point aside it is always of interest to a dismal scientist to consider alternative ways that we can die. Here are the 12 deadliest.

The Deadly Dozen: 12 Diseases Global Warming Incubates [The Daily Green]

1. Avian influenza

Like human influenza, avian influenza viruses occur naturally in wild birds, though often with no dire consequences.

The virus is shed by infected birds via secretions and feces. Poultry may contract the virus from other domestic birds or wild birds. A highly pathogenic strain of the disease-H5N1-is currently a major concern for the world's governments and health organizations, specifically because it has proven deadly to domestic and wild birds, as well as humans, and has the potential to evolve into a strain that can spread from human to human. Current data indicate that the movement of H5N1 from region to region is largely driven by the trade in poultry, but changes in climate such as severe winter storms and droughts can disrupt normal movements of wild birds and can bring both wild and domestic bird populations into greater contact at remaining water sources.


2. Babesiosis

Babesia species are examples of tick-borne diseases that affect domestic animals and wildlife, and Babesiosis is an emerging disease in humans. In some instances, Babesia may not always cause severe problems by themselves but when infections are severe due to large numbers of ticks, the host becomes more susceptible to other infectious diseases. This has been seen in large die-offs of lions in East Africa due to canine distemper. Climate factors fostered heavy infestations of ticks on wild buffalo and subsequent spill-over infection of lions. The lions then became more susceptible to infections with the distemper virus. In Europe and North America, the disease is becoming more common in humans, also linked with tick distributions. Diseases that have previously been thought to have limited impact, such as babesiosis, must be watched closely in a changing climate to assess how environmental conditions may tip the scale and cause more significant impacts on ecosystems, animals, and people.


3. Cholera

Cholera is a water-borne diarrheal disease affecting humans mainly in the developing world. It is caused by a bacterium, Vibrio cholerae, which survives in small organisms in contaminated water sources and may also be present in raw shellfish such as oysters. Once contracted, cholera quickly becomes deadly. It is highly temperature dependent, and increases in water temperature are directly correlated with occurrence of the disease. Rising global temperatures due to climate change are expected to increase incidence of this disease.


4. Ebola

Ebola hemorrhagic fever virus and its closely related cousin-the Marburg fever virus-easily kill humans, gorillas, and chimpanzees, and there is currently no known cure. Scientists continue to work on finding the source of the disease and to develop vaccines for protection. There is significant evidence that outbreaks of both diseases are related to unusual variations in rainfall/dry season patterns. As climate change disrupts and exaggerates seasonal patterns, we may expect to see outbreaks of these deadly diseases occurring in new locations and with more frequency. WCS's work on Ebola in Central Africa has been supported by the US Fish and Wildlife Service.


5. Intestinal and external parasites

Parasites are widespread throughout terrestrial and aquatic environments. As temperatures and precipitation levels shift, survival of parasites in the environment will increase in many places, infecting an increasing number of humans and animals. Many species of parasites are zoonotic, spread between wildlife and humans. The nematode, Baylisascaris procyonis, is spread by the common raccoon and is deadly to many other species of wildlife and humans. A close relative, Baylisascaris schroederi, causes death in its natural host-the critically endangered giant panda. Monitoring of parasite species and loads in wildlife and livestock help us identify transmission of these infections between domestic and wild animals and humans.


6. Lyme disease

This disease is caused by a bacterium and is transmitted to humans through tick bites. Tick distributions will shift as a result of climate change, bringing Lyme disease into new regions to infect more animals and people. Although effects of the disease on wildlife have not been documented, human-induced changes in the environment and on population patterns of species such as white-tailed deer that can carry infective ticks greatly affect the distribution of this disease. Monitoring of tick distributions will be necessary to assess the impacts of climate change on this disease.


7. Plague

Plague, Yersinia pestis - one of the oldest infectious diseases known-still causes significant death rates in wildlife, domestic animals, and humans in certain locations. Plague is spread by rodents and their fleas. Alterations in temperatures and rainfall are expected to change the distribution of rodent populations around the globe, which would impact the range of rodent-born diseases such as plague.


8. "Red tides"

Harmful algal blooms off global coasts create toxins that are deadly to both humans and wildlife. These occurrences-commonly called "red tides" - cause mass fish kills, marine mammal strandings, penguin and seabird mortality, and human illness and death from brevetoxins, domoic acid, and saxitoxins (the cause of "paralytic shellfish poisoning"). Similar events in freshwater are caused by a species of Cyanobacteria and have resulted in animal die-offs in Africa. Altered temperatures or food-web dynamics resulting from climate change will have unpredictable impacts on the occurrences of this worldwide phenomenon. Effects of harmful algal blooms on sea life are often the first indicators that such an event is taking place.


9. Rift Valley Fever

Rift Valley fever virus (RVFV) is an emerging zoonotic disease of significant public health, food security, and overall economic importance, particularly in Africa and the Middle East. In infected livestock such as cattle, sheep, goats and camels, abortions and high death rates are common. In people (who can get the virus from butchering infected animals), the disease can be fatal. Given the role of mosquitoes in transmission of the virus, changes in climate continue to be associated with concerns over the spread of RVFV.


10. Sleeping sickness

Also known as trypanosomiasis, this disease affects people and animals. It is caused by the protozoa Trypanosoma brucei, and transmitted by the tsetse fly. The disease is endemic in certain regions of Sub-Saharan Africa, affecting 36 countries, with estimates of 300,000 new cases every year and more than 40,000 human deaths each year in eastern Africa. Domestic cattle are a major source of the disease, but wildlife can be infected and maintain the disease in an area. Direct and indirect effects (such as human land-use patterns) of climate change on tsetse fly distributions could play a role in the distribution of this deadly disease.


11. Tuberculosis

As humans have moved cattle around the world, bovine tuberculosis has also spread. It now has a global distribution and is especially problematic in Africa, where it was introduced by European livestock in the 1800s. The disease infects vital wildlife populations, such as buffalo and lions in Kruger National Park in South Africa, where tourism is an integral part of local economies. The disease also infects humans in southern Africa through the consumption of un-pasteurized milk. Human forms of tuberculosis can also infect wild animals. Climate change impacts on water availability due to drought are likely to increase the contact of wildlife and livestock at limited water sources, resulting in increased transmission of the disease between livestock and wildlife and livestock and humans.


12. Yellow fever

Found in the tropical regions of Africa and parts of Central and South America, this virus is carried by mosquitoes, which will spread into new areas as changes in temperatures and precipitation levels permit. One type of the virus-jungle yellow fever-can be spread from primates to humans and vice-versa via mosquitoes that feed on both hosts. Recent outbreaks in Brazil and Argentina have had devastating impacts on wild primate populations. In some countries in South America, monitoring of wild primates has resulted in early detection of disease activity and allowed vaccination programs to be rapidly implemented to protect humans.

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"The stolen forests" - trade, the environment and corruption

A fine article from the New Yorker that combines trade, the environment, development and corruption - all favorite topics of mine. This is an excellent and lengthy 9 page article but is well worth the effort.

H/T Matt Kahn.

The Stolen Forests [New Yorker]

Chances are good that if an item sold in the United States was recently made in China using oak or ash, the wood was imported from Russia through Suifenhe. Because as much as half of the hardwood from Primorski Krai is harvested in violation of Russian law—either by large companies working with corrupt provincial officials or by gangs of men in remote villages—it is likely that any given piece of wood in the city has been logged illegally. This wide-scale theft empowers mafias, robs the Russian government of revenue, and assists in the destruction of one of the most precious ecosystems in the Northern Hemisphere. Lawmakers in the province have called for “emergency measures” to stem the flow of illegal wood, and Russia’s Minister of Natural Resources has said that in the region “there has emerged an entire criminal branch connected with the preparation, storage, transportation, and selling of stolen timber.”

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A fifth of the world’s wood comes from countries that have serious problems enforcing their timber laws, and most of those countries are also experiencing the fastest rates of deforestation. Until a decade ago, many governments were reluctant to acknowledge illegal logging, largely because it was made possible by the corruption of their own officials. As early as the nineteeneighties, the Philippines had lost the vast majority of its primary forests and billions of dollars to illegal loggers. Papua New Guinea, during roughly the same period, experienced such catastrophic forest loss that it commissioned independent auditors to assess why it was happening; they determined that logging companies were “roaming the countryside with the self-assurance of robber barons; bribing politicians and leaders, creating social disharmony and ignoring laws in order to gain access to, rip out, and export the last remnants of the province’s valuable timber.” In 1998, the Brazilian government announced that most of the country’s logging operations were being conducted beyond the ambit of the law.

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Sun Laiyong’s references to organized crime pointed to one of the most disturbing aspects of the illegal timber trade: the violence that supports it. Last December, the body of a Russian banker with close ties to the timber industry was found at the bottom of his swimming pool, near Moscow. A bag had been pulled over his head, and his arms had been tied to his ankles. In a sloppy attempt at a coverup, a suicide note had been left at the scene, prompting a law-enforcement official to say, “He’s not Harry Houdini.” I heard of a similar “suicide” not far from Vladivostok earlier this year: an activist working with the World Wildlife Fund was found at a remote hunting cabin, fatally shot, an unconvincing note by his side. This type of violence can be found elsewhere. Earlier this year, in Peru, a community leader who tried to report a shipment of stolen timber was shot to death in a government office. Three years ago, in Brazil, a missionary and community organizer from Ohio, Sister Dorothy Stang, was murdered in the state of Pará, where a third of the Brazilian Amazon’s deforestation is occurring and where she had made enemies of loggers.

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Environmental Videos from VideoJug

From the inbox:

Videojug has an environmental video section. Here is the link:

VideoJug Environment


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Econ211 Environmental Economics 2009

This week we start teaching Econ211A Environmental Economics. The course is for second year undergraduates and it is recommended that students have studied an introductory economics course in their first year.

The library will have copies of all these books. The only one we believe is worth buying is Perman et al. (2003). A new version of this text should be out next year. Second hand copies should be available.

The course will draw on material from most of the books listed below in the textbook section.

There are a number of older texts in our reading list and we still think that there is scope for a new text book that covers all the material in this course.

Any University of Birmingham student who buys a textbook/book from the links below should speak to me after a lecture.

The textbooks that we recommend are as follows:



Product Description

This text has been written primarily for the specialist market of second and third year undergraduate and post-graduate students of economics. The clear explanations and basic principles that underpin the text, however, make it readily accessible to non-economists coming to environmental economics from diverse programmes of study.
Natural Resource and Environmental Economics is among the leading textbooks in its field. Well written and rigorous in its approach, this third edition follows in the vein of previous editions and continues to provide a comprehensive and clear account of the application of economic analysis to environmental issues. This new edition has evolved with the times and been thoroughly updated to reflect recent developments in environmental issues and policies, such as forestry, biodiversity and pollution control. The early chapters explain the development and role of environmental economics before further chapters advance the student at a suitably challenging but achievable level.

Other books of interest:











See our Amazon bookshop (sidebar link) for other recommended reading HERE.

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What is the value of water? The debate

From the inbox:

Given the increasing scarcity of water in certain regions I remain confident that this will lead to future armed conflict and indeed it could be argued that is already has done.

The Economist debate is therefore timely. I have voted "pro" at this early stage.

This house believes that water, as a scarce resource, should be priced according to its market value.”

September 30th The Economist will start a two-week long Oxford-style online debate on the value of water. The proposition is “This house believes that water, as a scarce resource, should be priced according to its market value.”

Some of the issues the debate will cover include: Would water supplies be better managed if it were treated as a commodity, and priced accordingly? Or is water a basic human right that governments should secure for their citizens? As both an industrial input and a prerequisite of life, water has become extremely scarce for roughly a billion people who do not have a constant supply of clean and safe water, so the issue is of extreme importance.

Debate Schedule
• September 30th. Opening statements and comments and voting open to the public
• October 1st. Guest Participant post by Dr. Michael W. Hanemann, chancellor's professor, Department of Agricultural & Resource Economics, University of California
• October 2nd. Guest Participant post by Anup Jacob, partner, Virgin Green Fund
• October 3rd. Rebuttal statements and Guest Participant post by Colin Chartres, director general, International Water Management Institute
• October 6th. Guest Participant post by Dr. Peter Gleick, president and co-founder, Pacific Institute
• October 7th. Guest Participant post by Peter L. Cook, executive director, National Association of Water Companies
• October 8th. Closing statements
• October 9th. Guest Participant post by Dr. Ashok Gadgil, senior scientist and deputy director, Environmental Energy Technologies Division, Lawrence Berkeley National Laboratory
• October 10th. Winner announced

Pro and Con Opening Statements

Pro Opening Statement
Stephen J. Hoffmann, Managing Director, WaterTech Capital & co-founder, Palisades Water Index Associates

The severe spatial and temporal imbalances in the supply of and demand for water—and safe drinking water in particular—dictate that water be priced at the true market value in order to resolve our global water challenges.

The notion of sustainability is gaining momentum with respect to the use of water and is likely to permeate virtually every aspect of water-resource management in the 21st century. While the hydrologic cycle is a closed biogeochemical process, the fact that the aggregate amount of water on Earth, in its various forms, is virtually constant on a human time scale does not mean that we do not face enormous challenges with respect to its spatial and temporal distribution.

Water is a critical factor in poverty, has a fundamental impact on human health, and is increasingly crucial in economic development. The World Health Organisation reports that 1.1 billion people worldwide lack access to safe drinking water and 2.7 billion people lack basic sanitation needs. Yet despite its stature as a prerequisite for life and for living, the price of water remains artificially low based on an institutional ideology that developed when accessible freshwater was relatively abundant and when contamination was mitigated by the ubiquity of the resource.

Sustainability is the mantra behind many emerging regulations, water-policy initiatives and technological advances. And nowhere is the market price of water more critical than in the concept of sustainability. Efficiency is critical in achieving sustainability and a market-driven price is paramount to the efficient allocation of water resources. The sustainability criterion suggests that, at a minimum, an allocation must leave future generations no worse off than current generations. Economics has much to say about the efficiency of the allocation.

The pricing of water must go beyond the mechanical and political aspects to the basic factors that affect the relationships between producers and consumers, and that are implicit in the rate structure. The principle of sustainability is critically dependent upon efficiency in water use. And efficiency cannot be achieved without the proper signals included in market prices. Market value is equivalent to water rates based on economic principles of water-resource pricing. In that regard, resource economics requires the convergence of two key principles: equimarginal value in use and marginal cost pricing.

Economic principles of resource allocation dictate that when costs are incurred in the acquisition, treatment and transport of water supplies to customers, the principle of equimarginal value in use should be combined with the principle of marginal cost pricing; that is, market value must govern. Additional units of water can always be made available by expending more resources to acquire and transport it, that is, at a given marginal cost.

The question of where to stop in increasing the supplies made available is then added to the question of how to arrange for the allocation of the supplies in store at any point in time. On efficiency grounds, additional units should be made available as long as any customers are willing to pay the incremental or marginal cots incurred. To meet the criterion of equimarginal value in use, however, the price should be made equal for all customers in a class.

It is precisely because of practical considerations such as alternative supplies, location, use patterns, types of service etc, that the marginal costs of serving all customers will not be the same. Pricing should be arranged, then, so that all customers within a class served under identical cost conditions pay the same amount equal to the marginal cost or market value. Between classes, however, prices should differ, and the difference should be the difference in marginal costs involved in serving the two. In general, the economic principles of resource allocation indicate that customers served under identical cost conditions should be charged equal prices and that the water should be supplied and priced in such a way that the price for each class of service equals the marginal cost of serving that class.

Water rates should be designed to fully recover the costs of providing water by charging customers in accordance with how they contribute to the costs. Schedules of water rates that charge customers in accordance with the cost of service would be efficient from the economic point of view, in that the price of a unit of water would be equal to the cost of the resources used to obtain and deliver that water. Further, they would be equitable in that no customer would be required to subsidise any other customer. To sum it up, the dictates of efficiency are clear: water should be allocated so that the marginal net benefit is equalised for all users. If marginal net benefits are not equalised, it is possible to increase net benefits by transferring water from those uses with low net marginal benefits to those with higher net marginal benefits. Again, the pricing of water at the ‘market’ value is the only way to make these determinations.

The amount of easily accessible freshwater is coming under increasing pressure as a result of global population growth, particularly in developing countries where urbanisation and industrialisation are underway, and the degradation of existing supplies. The amount of readily accessible freshwater is a minuscule percentage of the Earth’s total water budget. If per capita consumption of water continues to increase at its current rate, we will be using over 90% of all available freshwater with 20 years.

Scarcity, spatial and temporal, must be reflected in a pricing mechanism. Water is like any other economic good for which there is supply and demand and a pricing mechanism that seeks equilibrium between the two.

This is not a process-oriented enchantment with the free market that it may appear to be. While this might sound like so much economic rhetoric, the reality is that market pricing is central to enabling the forces that allow the efficient allocation of the resource. It is simply a recognition that market prices convey a great deal of information; information with respect to incentives, efficiency and allocational considerations. The pricing of water based on its true market value is also critical in resolving the issues associated with its allocation among competing beneficial uses.

Desalination is an example of where the market value of water plays an important role as a catalyst for problem resolution. In regions of the world where water is permanently scarce, desalination has emerged to meet demand. And it has done so only because there are few options. Granted, desalination is more attractive where energy is cheap, but it points to the reality that if water is simply unavailable, the market value argument is easy to acknowledge. It stands to reason that water priced at the market value (which includes scarcity, regulatory costs, treatment costs and resource management considerations) would be beneficial for the entire spectrum of conditions.

The signals and incentives contained in pricing water at its market value also enable the processes of recycling, reuse and conservation that are central to achieving sustainable water use. That water is not priced (valued) at its market value is the main reason why we are experiencing many of our severe water-quality and -quantity issues. Resource economics dictates the allocational efficiency of market-driven pricing.

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Con Opening Statement
Dr. Vandana Shiva, Director, Research Foundation for Science, Technology & Natural Resource Policy

Between last year and this the market value of Lehman Brothers dropped from $38.4 billion to $5 billion, Merrill Lynch from $71.9 billion to $33.1 billion, and Morgan Stanley from $70.2 to $43 billion. Since then Lehman Brothers has collapsed. There is clearly no reliable "market price" in a volatile world driven by greed and profits, with no social regulation. The idea that the management and distribution of and access to a scarce and vital resource like water can be left to the market—and that the market can assign a reliable price reflecting the real value of water—is both absurd and irresponsible.

All cultures have viewed water as the basis of life. Marketisation, however, allows water to be perceived as no different from any other commodity in the global market place–to be owned and bought and sold at arbitrary, unreliable prices.

The commodification of water shifts the focus from the water cycle on to water markets – diverse species, ecosystems and water systems adapted to millions of years of evolution are replaced by instantaneous relationships between “sellers” and “buyers” negotiating a commodity transaction which determines how water will be used, where it will flow, and where and to whom it will stop flowing. It is assumed that water will flow from “low value” to “high value” use. This increase in “value” (which refers to price) is supposed to magically overcome water scarcity and allocate water equitably.

We need to focus our thinking on water cycles rather than water markets, on human rights to water rather than profits to be made from commoditising a scarce resource. It is our relationship with the ecology of water that has the capacity to sustain water supplies for us and other species. Trade in water can help water markets grow in the short term, but unregulated markets will make our scarce and fast-disappearing water resources disappear ever faster. It is the discipline of ecology and hydrology that we need to guide our efforts at conservation, not the ecological indiscipline of markets.

The anarchy of the water market can be a good guide to profits – but it is a bad guide for the equitable, just and sustainable use of our precious water systems.

In the years ahead, the ecological and commercial paradigms will clash intensely as globalisation displaces cultures of water conservation and replaces them with a commercial monoculture of water as a commodity.

The commodification of water resources is being promoted by the World Bank and free-trade agreements like NAFTA and WTO. The World Bank is using Structural Adjustment programmes to privatise water resources. Free-trade agreements are defining water as an environmental service covered by rules of free trade in services. Privatisation and commodification are threatening to accelerate the processes that have led to the growing crisis of drought, desertification and water famines.

The market paradigm of water involves the assumptions that:

1. Increase in price is increase in value.

2. Increase in water trade is increase in water supply and hence free trade in water can overcome the water crisis.

The assumption that water markets will overcome the water crisis is, however, fallacious and malicious. Firstly, water markets cannot reduce water use and conserve water because commercial exploitation has created water scarcity by fuelling over-exploitation. In a world of inequality, higher prices do not tame consumption–they increase the luxury consumption by the rich and deprive the poor even of survival needs.

Secondly, water trade cannot increase water supplies. Water cannot be created by markets. It can be stored, diverted, polluted and also over-exploited, but its overall availability cannot be enhanced.

Water is defined by the water cycle and renewed if the water cycle is maintained. The ecological paradigm recognises that:

1. Water is the basis of all life on the planet including diverse species and all human communities.

2. Non-sustainable water use spurred by non-sustainable economies and technologies which violate the limits and the integrity of the water cycle are creating a water crisis.

3. The current water crisis can only be overcome by respecting the limits on water use that are enforced by the water cycle.

Markets driven by commercial values can neither recognise or respect the ecological limits set by the water cycle, nor give water its real value as the very basis of life. The real value of water is assigned by culture, which treats water as sacred; it is also assigned by rules of social equity and justice which recognise that everyone has a human right to water.

Water Markets Violate the Water Cycle

Water markets define “value” only as commercial and market value, and try and maximise this value as profits through commercial transactions and trade.

In nature’s economy, the primary value is sustainability and maintenance of nature’s essential ecological processes. Conservation is the imperative in nature’s economy for maximising ecological values.

In the sustenance economy, meeting people’s biological and livelihood needs for water are the primary objectives. Equity, justice and human rights are the primary values. Sharing of scarce water equitably is the imperative in the sustenance economy.

When water's social and ecological values are ignored and markets determine how water flows, it starts to move against the law of gravity. It moves upwards – to money – from the poor to the rich, from agriculture to industry, from the countryside to the city. In water markets, water moves from having a high ecological and social value, but a low market value, to having a low ecological and social value, but a high market value.

Water markets take water from where it is needed by nature’s economy, people’s economy and the countryside, to where there is purchasing power for water as a commodity—the urban areas, industry and industrial agriculture. Managing a scarce and precious resource like water requires conservation, equity and the recognition that as the basis of life, water is priceless.

Rich to pay the poor to preserve forests?

As the new term begins and preparation for Environmental Economics lectures starts again it is time to dust off the debate on whether rich nations should pay poor nations to preserve their forests. Logically it makes sense but the coordination and free riders problems will undoubtedly prove too great.

Some of the numbers in this article should give pause for thought. The Greenpeace plan has some merit but numerous, potentially insurmountable, hurdles remain.

The new "Green Inc" blog of the New York Times reports:

How Pollution Might Help Preserve Forests [Green Inc]

There is a growing group of campaigners and business leaders who say the rich world should pay people in poorer countries to preserve their forests and jungles.

Those in favor of such a wealth transfer say there’s a global imperative behind paying our neighbors in tropical regions a fair price to be good custodians of their trees. Tropical forests pay a crucial role in absorbing carbon dioxide — the main greenhouse gas. Chopping down trees releases large amounts of such gases.

If current rates of deforestation continue in Brazil and Indonesia, that would cancel out 80 percent of the cuts in emissions made by countries that meet their targets under the Kyoto climate treaty, according to Robert Glasser, the secretary general of CARE International, an aid organization.

Mr. Glasser, speaking with me on Wednesday in Brussels, said CARE is involved in efforts to put a price on forests because there is growing evidence of a link between climate change and poverty, particularly in cases of higher incidences of drought and disruptions to agriculture.

The question now is how to pay the bill.

The environmental group Greenpeace says it has the solution: An initiative called Forests for Climate that would aim to raise as much as $15 billion per year to cut emissions from deforestation in half. (A PDF overview of the proposal is here.)

Greenpeace wants governments agree to direct some of the money they raise from selling and giving away pollution rights — such as the allowances issued by European governments that permit companies to emit an annual quota of CO2 — and put that money into a new fund to pay other countries to save forests.

Greenpeace says its fund would be open to all countries with tropical forests, preventing the timber industry from shifting from one country to the next.

Other people say those kinds of initiatives, which require governments to forgo some potential revenues, are important but insufficient.

“Important aspects of preserving forests and planting new trees will be much more effective through markets,” said Virgilio Mauricio Viana, the director general Amazonas Sustainability Foundation, a non-profit group founded by the Brazilian state government of Amazonas and Bradesco Bank.

Mr. Viana is working with Glasser of CARE, a group called the World Agroforestry Centre, and a company, Sustainable Forestry Management, to ensure that European Union lawmakers adopt rules that encourage the growth of new markets for “carbon credits” derived from forests.

That, of course, would expand the opportunities for rich countries and rich-world companies to offset their emissions from dirty coal and inefficient cars by buying credits on international carbon markets.

One potential hitch, as I see it, is that those markets still are in their infancy and have been strongly criticized for failing to push up the price of polluting to levels where companies and citizens responsible for most of the planet’s harmful emissions actually change their behavior.

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EU fisheries update

Ahead of the start of the academic term there is a timely reminder of the state of EU fisheries with quote busting and illegal catches still prevalent.

EU Fisheries Policy Not Working, Needs Review [PlanetArk]

BRUSSELS - EU regulators on Wednesday called for a full-scale review of EU fisheries policy, saying current rules were doing little to curb overfishing, quota busting and other illegal fishing practices.

EU fisheries policy was last reformed in 2002 and is due for review by 2012 at the latest. While much had improved since 2002 -- much stricter controls on illegal fishing, for example -- there were many shortcomings, the European Commission said.

Short-term decision-making coupled with irresponsible behaviour by certain parts of the fishing industry in the European Union had penalised those fishermen acting for the common good, it said.

The result was a vicious circle that undermined both the ecological balance of the oceans and the economic profitability of the fisheries sector, it said in a statement.

Many species -- cod and hake, for example -- are depleted in certain EU waters due to years of chronic overfishing, exacerbated by poor controls and fines that, until recently, were not set high enough to deter lawbreakers.

"In its current form, the CFP (Common Fisheries Policy) does not encourage responsible behaviour by either fishermen or politicians," EU Fisheries Commissioner Joe Borg said.

"The management tools we use reward narrow-minded, short-term decision-making, which has now undermined the sustainability of our fisheries," he said in the statement.

In May, the Commission signalled all was not well in the fisheries sector when it issued a policy statement changing the basis for calculating its proposed fish catch volumes for 2009 and said 88 percent of EU fish stocks were overexploited.

That huge number compared with 80 percent at the same stage last year and a global average of just 25 percent, it said. The stocks situation was "alarming" and bold action was needed.

Europe's share of fish products from domestic resources had also fallen from 75 percent in the early 1970s to 40 percent now as it depended more and more on imports, it said.

Scientists say that unless fishing is curbed, or in some cases stopped altogether, many species in EU waters risk extinction. Cod is a prime example, especially in the North Sea and off the west coast of Scotland.

But the Commission usually shies from proposing outright fishing bans or a "zero catch", fearful of the economic impact it would have on small coastal communities that depend on fishing for their livelihood.

In any case, if the Commission does suggest quota cuts, they usually get diluted down by EU ministers who have to agree the final numbers before the next year's quotas enter into force. (Editing by Sami Aboudi)

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"residents panic"

The "economics of natural disasters" is catching my eye at the moment (although the economics of financial disasters would probably be a more lucrative area to go into these days).

As such I was taken by a recent headline to a very short piece in PlanetArk reporting on a recent earthquake in East Timor.

Quake Hits East Timor, Residents Panic [PlanetArk]

"People panicked and rushed out from their houses," said Caitano Guterres, a resident in Baucau, about 75 km northeast of Dili.

First, did the residents really "panic"? What do people tend to do in earthquakes and what does a panicking resident actually look like. I assume it means that they were running around very fast waving their hands in the air and screaming or does it mean something else.

Given the imminent collapse of the capitalist system as we know it I expect we need to look for the signs of panic everywhere. I suspect wall street would be a good place to spot "panicking residents" assuming that their Manhattan lofts have not been repossessed depriving them even of the word "resident".

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Lehman Brothers lets carbon sink (without trace)

The day the big banks fell cannot pass without a Lehman Brothers related post.

Whilst thousands are losing their jobs we must consider the environmental implications. One of the most obvious is the closure of the carbon trading desk. This is basically a none story cooked up by journalists looking for an environmental angle.

Lehman Brothers Shuts Carbon Trading Desk [PlanetArk]

LONDON - Lehman Brothers shut down its carbon emissions trading desk after the bank filed for bankruptcy protection, a source close to the company told Reuters on Monday.

"Everything's stopped, blocked ... it's a bit anarchic," he said.

Lehman declined to comment on the matter.

The US investment bank filed for Chapter 11 protection on Monday while Merrill Lynch, also plagued by toxic, mortgage-related debt, agreed to be bought by Bank of America Merrill's carbon desk was open as usual on Monday, a source familiar with the bank said.

Lehman's membership on the IntercontinentalExchange, which includes access to the European Climate Exchange, the world's largest emissions trading exchange, was suspended, an ICE spokesman said.

This effectively disallows Lehman from closing any open positions on its trading books.

LCH.Clearnet, which handles clearing for ICE, also restricted Lehman's trading, citing the company as a "defaulter", the clearing house said in a statement.

"Lehman's were relatively small, they were late coming into the (emissions) market," one London-based broker said, adding that Lehman is thought to have been more involved in the Clean Development Mechanism (CDM) market than in day-to-day trading.

In the US$13 billion CDM market, a trading scheme under the Kyoto Protocol, companies from rich nations can invest in clean energy projects in developing countries and in exchange receive offset credits, called CERs, which they can use toward emissions targets or sell for profit.

Lehman has stakes in up to 10 CDM projects, the first source said. "There are some very good projects in the pipeline," he said, adding that they would probably be sold by liquidators.


BACKFIRE

The projects, mostly in China, are expected to generate 10 million to 12 million CERs by 2012, worth up to 275 million euros (US$385.4 million) at current market rates.

The source said the projects are of high quality and not involved in the destruction of hydrofluorocarbons (HFCs), a lucrative trade considered controversial by many in the emissions market.

One potential implication of Lehman's demise is the effect felt by those on the other side of these CER deals, often small companies in developing countries.

"If Lehmans have entered into direct contracts with counterparties in the developing world, chances are these contracts are probably not that complex," the broker said.

"Provisions in the case of bankruptcy probably won't have been included unless Lehmans introduced them unilaterally ... to protect themselves in case of the small (project owner) declaring bankruptcy," he said, adding that these provisions may now have backfired against Lehman.

European emissions markets were lower on weakness across the global energy markets on Monday.

European Union Allowances for December delivery lost one euro or 4.2 percent at 22.90 euros a tonne on volume of 2,300 lots traded. Benchmark CERs lost close to three percent at 19.20 euros a tonne.

Environmental protection, the economy, and jobs

Having done some work on this topic for the UK this study by Roger Bezdek is of interest.

Bezdek, Roger (Lead Author); Tom Tietenberg (Topic Editor). 2008. "Environmental protection, the economy, and jobs." In: Encyclopedia of Earth. Eds. Cutler J. Cleveland (Washington, D.C.: Environmental Information Coalition, National Council for Science and the Environment).

Environmental protection, the economy, and jobs

The relationship between environmental protection, the economy, and jobs has been an issue of harsh contention for decades. Analysts and policymakers of all points of view seem to agree that a strong relationship exists between environmental protection and jobs; the debate is over the sign of the correlation coefficient. Does environmental protection tend to harm the economy and destroy jobs or to facilitate economic growth and create jobs? If the latter is the case, can the positive affects be quantified and estimated at a meaningful level of detail?

Here we address this issue by summarizing the initial results of the Jobs and the Environment Initiative, a research effort funded by nonprofit foundations designed to quantify the relationship between environmental protection, the economy, and jobs. We estimate the size of the U.S. environmental industry in 2003 and the numbers of environment-related jobs created at the national level and in the states of Florida, Michigan, Minnesota, North Carolina, Ohio, and Wisconsin.

The problem is identifying what is a green job. Here I agree with the authors:

More specifically, what constitutes an “environmental job?” While a definitive analysis of this important topic is outside the scope of this report, our review of the literature indicates that there is no rigorous, well-accepted definition of an environmental job. Rather, the definitions used are often loose and contradictory.

This paper tries but I remain unconvinved. It is still a useful reference that I will need to return to (hence this post).

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Infant health and pollution

Back from the European Trade Study Group conference in Warsaw, Poland. There was a couple of environmental sessions with some interesting papers.

We kick off again with a paper on infant health and pollution. They clearly have an excellent data set enabling the authors to get a good handle on the issue. Carbon monoxide is the main air pollutant that causes the damage. I need to read the paper to get a better understanding of the magnitude of the effects which are clearly crucial.

Air Pollution and Infant Health: Lessons from New Jersey

Date: 2008-07
By: Janet Currie
Matthew J. Neidell
Johannes Schmieder

URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:14196&r=env

We examine the impact of three "criteria" air pollutants on infant health in New Jersey in the 1990s by combining information about mother's residential location from birth certificates with information from air quality monitors. In addition to large sample size, our work offers three important innovations: First, because we know the exact addresses of mothers, we select those mothers closest to air monitors to ensure a more accurate measure of air quality. Second, since we follow mothers over time, we control for unobserved characteristics of mothers using maternal fixed effects. Third, we examine interactions of air pollution with smoking and other predictors of poor infant health outcomes. We find consistently negative effects of exposure to pollution, especially carbon monoxide, both during and after birth. The effects are considerably larger for smokers than for nonsmokers as well as for older mothers. Since automobiles are the main source of carbon monoxide emissions, our results have important implications for regulation of automobile emissions.
JEL: I12 Q53

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Toxic Linfen: Inside the most polluted city on earth

VBS.TV go on a trip to Linfen to check out the pollution. Part 1 of 6. Only 5 minutes.

Breathing is equivalent to smoking 3 packets of cigarettes. Nice.


Other 5 parts can be seen here as well.

Screaming Americans cry for the dead trees (and rocks)

This is a funny video.

The conspiracy theorists could even claim that this was paid for by big oil to discredit treehuggers everywhere.


Hippies Wail for Dead Trees - Watch more free videos

Global Temperature Trends

For all the talk of "global warming" let us look at some facts and figures like good economists.

Trevor Breusch and Farshid Vahid from ANU do just that in a working paper published at the end of July.

I think it tells us that global warming is real. Or does it?


GLOBAL TEMPERATURE TRENDS [PDF]

Abstract

Are global temperatures on a warming trend? It is difficult to be certain about trends when there is so much variation in the data and very high correlation from year to year. We investigate the question using statistical time series methods. Our analysis shows that the upward movement over the last 130-160 years is persistent and not explained by the high correlation, so it is best described as a trend. The warming trend becomes steeper after the mid-1970s, but there is no signi…cant evidence for a break in trend in the late 1990s. Viewed from the perspective of 30 or 50 years ago, the temperatures recorded in most of the last decade lie above the confi…dence band of forecasts produced by a model that does not allow for a warming
trend.

So let us cut past the equations and pictures and get to the meat. What is the conclusion?

Conclusion

We conclude that there is sufficient evidence in temperature data in the past 130-160 years to reject the hypothesis of no warming trend in temperatures at the usual levels of signifi…cance. The evidence of a warming trend is present in all three of the temperature series and it is most pronounced in NASA’s GLB series. Although we have used unit roots and linear trends as a coordinate system to approximate the high persistence and the drift in the data in order to answer the questions, we do not claim that we have uncovered the nature of the trend in the temperature data. There are many mechanisms that can generate trends and linear trends are only a …rst order approximation (see Granger 1988). It is impossible to uncover detailed trend patterns from such temperature records without corroborating data from other sources and close knowledge of the underlying climate system.

So........global warming is real but is it caused by mankind's exploitation of the earth's resources and relentless pursuit of growth at all costs or is it just kind of happening as part of the natural ebb and flow of the earths atmosphere over millions of years? Will mankind survive long enough to find out the answer?

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Death by Turbine: exploding bat lungs

SO you thought wind power was the future? Not if you are a small furry mammal with fangs it isn't. H/T to Common Tragedies for pointing out a recent Scientific American article on bat deaths due to wind turbines.

There is something about the concept of exploding lungs at high altitude that make this article blogworthy.

On a Wing and Low Air: The Surprising Way Wind Turbines Kill Bats [Scientific American]

Instead, 90 percent of the 75 bats the researchers ultimately dissected had been killed by burst blood vessels in their lungs, according to results presented in Current Biology—suggesting that the air pressure difference created by the spinning windmills had terminated them, not contact with the blades.

So where is the science bit:

As the wind moves through a wind turbine's blades, pressure drops behind them by five to 10 kilopascals (a pascal is a unit of pressure), and any bat unlucky enough to blunder into such an undetectable low pressure zone would find its lungs and blood vessels rapidly expanding and, quickly, bursting under the new conditions.

I think we still need a little more detail:

"If bats have a lungful of air as they fly through the air-pressure change, there's nowhere for the air to go," Baerwald explains. "The small blood vessels around the lungs burst and fill the lungs with fluid and blood."

The implications are potentially important. Building very high wind farms in bat migration zones may be a bad idea and certainly generates bad publicity. Bats have a good PR department and hundreds of dead flying mammals is bad for business and it turns out the Eco-system:

The full impact of these bat-killing pressure zones extends far beyond the wind farm, however. Such migrating bats travel from Canada as far as Mexico, eating thousands of insects en route, including crop pests such as moths and beetles. "They are one of the only things that fly around at night and eat bugs," Baerwald notes. "Bats killed in Canada could have a detrimental impact in America or Mexico. It's not local. It's an ecosystem-wide issue."

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Methane Hyrates and Climate Risk

The energy needs to the US could be provided by the extraction of "Methane Hydrates" that lie temptingly close to the US coast. The problem? The extraction of methane hydrates could rapidly accelerate climate change and ultimately bring about a decline in civilisation as we know it.

Forbes comment:

Energy's Most Dangerous Game [Forbes]

All the energy America needs for the next 100 years lies under the sea off the coast of South Carolina. One problem: Digging it out could cause a global climate disaster.

Welcome to the final frontier in fossil fuels, the wild card in climate change theories and the dark horse in the scramble to secure access to clean energy. Meet methane hydrates, the world's most promising and perilous energy resource.

As you can see from the paragraph below, any human error on extraction could have very serious implications.

A substantial amount of evidence suggests that weakening the lattice-like structure of gas hydrates has triggered underwater landslides on the continental margin. In other words, the extraction process, if done improperly, could cause sudden disruptions on the ocean floor, reducing ocean pressure rates and releasing methane gas from hydrates.

A mass release of methane into the sea and atmosphere could have catastrophic consequences on the pace of climate change. More than 50 million years ago, undersea landslides resulted in the release of methane gas from methane hydrate, which contributed to global warming that lasted tens of thousands of years.

Even so, research continues across a wide range of countries. One can be sure a mistake is just around the corner. How big will it be?

Major government research initiatives have been launched in China, India, Germany, Norway, Russia, Taiwan and several other countries. The Japanese government has estimated that producing gas from methane hydrates is commercially viable when oil prices rise above $54 a barrel.

The bottom line is that mass extinction risk is very low and this industry will develop and take off and could again alter the geo-political landscape.

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The environment is a luxury good shock

News from the FT that the environment takes a back seat when the economic going gets tough. This is the pointless conclusion from a pointless survey used to advertise an estate agent.

The result is entirely expected and is similar to the argument from developing countries that growth and poverty take priority over environmental issues.

Please don't print out this post - save paper.

Focus on green offices wanes [FT]

Environmental concerns such as energy efficiency have been pushed to the bottom of the agenda for UK companies as cost becomes increasingly crucial in the more difficult economic climate.

Rental cost is the key factor in the decision to take office space in central London, with energy efficiency and green issues cited as the least important consideration, according to research by Knight Frank, the property consultancy.

During the recent property boom, much was made of the drive by developers for more energy-efficient schemes, which had been hoped to command higher rents because of their green credentials.

However, green issues are more of a concern in a benign economic climate, becoming a luxury as circumstances change, the research suggests.

“While the green agenda and sustainability issues are fundamental to the future of office buildings ... as economic markets suffer such requirements become less of a priority to central London office occupiers,” said Bradley Baker, head of central London for Knight Frank.

The survey gave the retention of key staff as the next most important factor.

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Greening US cities

Matthew Kahn and Ed Glaser have a new working paper out that is looking at the Greenness of Cities and CO2 emissions. This has some important policy implications for urban development.

The Greenness of Cities: Carbon Dioxide Emissions and Urban Development

Edward L. Glaeser
Harvard University - John F. Kennedy School of Government, Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER)

Matthew E. Kahn
University of California, Los Angeles (UCLA)


August 2008

Harvard Institute of Economic Research Discussion Paper No. 2161

Abstract:
Carbon dioxide emissions may create significant social harm because of global warming, yet American urban development tends to be in low density areas with very hot summers. In this paper, we attempt to quantify the carbon dioxide emissions associated with new construction in different locations across the country. We look at emissions from driving, public transit, home heating, and household electricity usage. We find that the lowest emissions areas are generally in California and that the highest emissions areas are in Texas and Oklahoma. There is a strong negative association between emissions and land use regulations. By restricting new development, the cleanest areas of the country would seem to be pushing new development towards places with higher emissions. Cities generally have significantly lower emissions than suburban areas, and the city-suburb gap is particularly large in older areas, like New York.

Working Paper Series

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Environmental Taxes

A nice little summary paper looking at the role of environmental taxes in the UK. On the "to read" list. This could also be integrated into my second year ECON211 course.

Environmental Taxes

Don Fullerton
University of Texas at Austin - Department of Economics; National Bureau of Economic Research (NBER)

Andrew Leicester
Institute for Fiscal Studies (IFS)

Stephen Smith
University College London - Department of Economics

July 2008

NBER Working Paper No. W14197

Abstract:

This chapter provides an overview of key economic issues in the use of taxation as an instrument of environmental policy in the UK. It first reviews economic arguments for using taxes and other market mechanisms in environmental policy, discusses the choice of tax base, and considers the value of the revenue from environmental taxes. It is argued that environmental tax revenues do not significantly alter economic constraints on tax policy, and that environmental taxes need to be justified primarily by the cost-effective achievement of environmental goals. The chapter then assesses key areas where environmental taxes appear to have significant potential - including taxes on energy used by industry and households, road transport, aviation, and waste. In some of these areas, efficient environmental tax design needs to make use of a number of taxes in combination - a multi-part instrument.

JEL Classifications: H23, Q28
Working Paper Series

Environmental Spillovers at the EEA/ESEM

Now back from 5 days in Milan at the EEA/ESEM 2008 conference where there were 5 or 6 environmental economics sessions most global warming related.

The average quality of paper presented was decent and there was a wide range of speakers including many European PhD students and over 1200 economists that I had never heard of (and I am sure had never heard of me).

In Search of Environmental Spillovers

Facundo Albornoz, Matthew A. Cole, Robert J.R. Elliott and Marco G. Ercolani

Abstract

There is an extensive literature that examines the relationship between foreign direct investment (FDI) and the productivity and competitiveness of domestic firms. Using estimation techniques from the productivity spillover literature, this paper tests for the presence of environmental spillovers from foreign firms. On the basis that foreign owned firms may encourage firms in their extended supply chain to improve their environment related management practices, evidence for the existence of environmental spillovers should be easier to find than productivity spillovers where firms naturally attempt to minimize intra-industry knowledge leakage. In this paper we show that first, foreign owned firms are more likely to implement environmental management systems (EMS) and second, that the presence of foreign owned firms in those sectors that a firm supplies can encourage good environmental practice. This is especially true if a firm is foreign, has high absorptive capacity, and operates in the presence of formal and informal networks.

JEL: D21, Q20, Q56.

Keywords: Multinationals, Environment, Firm Characteristics, Spillovers.

Normal blogging frequency can now resume and a month in Australia and 5 days in Milan.

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Positive environmental spillovers from the Olympics

Coverage of the "pollution problem" for the Beijing Olympics was widespread as was the methods China employed to ensure that the air quality was a good as possible including the shutting down of many polluting factories.

It is therefore interesting to note that positive legacy effect of the games. Perhaps locals began to appreciate improved air quality that fed through to the decision makers.

Factories to Have to Clean Up Before Reopening [PlanetArk]

BEIJING - Polluting factories in Beijing ordered to stop work to improve the air quality for the Olympics will have to clean up their operations before being allowed to resume production, state media said on Saturday.

Authorities have ordered dozens of factories to halt or limit their operations and restricted use of cars to cut down on pollution during the Games, leading to the cleanest summer-time air in a decade, according to official statistics.

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Du did not give details on the criteria the bureau would use to determine whether factories would reopen. City officials would also not have authority over factories in surrounding provinces that were also affected by the Olympic-related shutdowns.

However, the pledge underlines the degree to which the success of the environmental measures could affect policy making beyond the Games.

Du had previously said that authorities would accelerate the removal of polluting vehicles from the roads and take more stringent measures to cut down on dust at construction sites.

Climate Change Shrinks Africa

Nice little climate change scare story with "experts" predicting that the coast of Africa will soon have to be redrawn as sea levels rise. This is merely another example of the poorest countries (who contributed least to the pollution in the first place) experiencing the largest amount of pain.

In the first paragraph I particularly like the term "brutally redrawn". This gives the impression of a some rather aggressive pen on map behaviour.

West Africa's coastline redrawn by climate change: experts [Yahoo]

Rising sea levels caused by climate change will brutally redraw a 4,000-kilometre (2500-mile) stretch of west African coastline from Senegal to Cameroon by century's end, experts were told AFP Friday.

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Among the cities worst hit would be the Gambian capital Banjul and Lagos, Nigeria's economic capital and home to 15 million. Some parts of Lagos lie below sea-level today and it is already subject to frequent flooding.

The Niger delta's income-generating oil fields are especially vulnerable, Cramer said.

Clearly the economists have been called in and come out with the old adage "too expensive" therfore you are doomed.

Another serious threat is salty sea water intrusion into fertile agricultural land.

"This will make the ground water undrinkable and unsuitable for agricultural purposes. The result will be food and water insecurity," said George Awudi, Ghana Programme Coordinator for Friends of the Earth.

Environmental experts offer different solutions, but all agree on the futility -- and prohibitive cost -- of erecting massive sea barriers.

"The sensible option is moving to higher ground, which is a tough option especially for Nigeria as it means giving up its economic centres in Lagos and its oil installations in the Delta," Cramer said.

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Pollution and Health: The Love Canal Disaster

In a lot of my work there is an assumed link between pollution and detrimental health effects. This would appear to be obvious but this is still contentious. We are using TRI data to get at some of these issues.

This story of birth defects in the US is sobering. In particular the long time lag between exposure and adverse effects is of interest. The use of the term "love canal" could not be more inappropriate.

As the EPA put it:

The Environmental Protection Agency calls Love Canal "one of the most appalling environmental tragedies in American history," and many believe the site is still deadly.

Love Canal's Lethal Legacy Persists

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And now, on the 30th anniversary of Love Canal, a preliminary New York State Department of Health study says women like Retton, whose mothers were pregnant and exposed to those chemicals, have double the risk for reproductive problems -- low birth weights, pre-term deliveries and birth defects.

They are also at higher risk for kidney, bladder and lung cancer, according to a not-yet-released study of the health effects at Love Canal.

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There, in a seemingly idyllic subdivision of swales, fields and neat bungalows, children played as carcinogens like benzene and dioxin bubbled up from the earth below. More than 6,000 residents were affected.

"It's scary," Retton told ABCNews.com, as she walked ankle-deep in the untended brush where her childhood home was demolished in the clean-up effort.

"I feel like a research animal," said Retton, a redhead with cherubic features and waif-like limbs. "I don't think anything I have now compares to what I will get later. It's not if, it's when."

Amphibian death spiral and the end of civilization

I apologise for the recent post shortage but I am down under on holiday at the moment. Even so, some stories cannot wait and those that are concerned with the end of the world get top priority.

It looks like "chytridiomycosis" could kill us all. The economics angle of this story is admittedly rather limited but I would guess that mass extinction would be a sell signal for shareholders.

Do Amphibian Deaths Signal the Coming of a Sixth Mass Extinction? [Treehugger]

If the rapidly depleting amphibian populations are any indication, we could be in for another mass extinction. That's the conclusion of a new study published in the Proceedings of the National Academy of Sciences, which finds that humans are worsening the impacts of climate change and disease on frogs and their fellow amphibians -- to the point where they are vanishing at an unprecedented, alarming speed.

The fatal infectious disease in question, chytridiomycosis, is caused by an aquatic fungus that only targets amphibians and is able to jump from one species to the next; it is believed to have already wiped out over 200 species.

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"100 months" to save the planet?

Always with an eye for a headline the "100 months" to save the planet certainly has more headline appeal than writing "just over 8 years to save the planet". There is even a onehundredmonths.org to accompany this headline. Clever. Although this will be oddly out of date in 1 months time.

There is a curious appeal about round numbers - think the year 2000 end of the world cults that slowly came down from their mountain hideouts a few months later.

'100 months' to stop overheating [Guardian]

Rising greenhouse gas emissions could pass a critical tipping point and trigger runaway global warming within the next 100 months, according to a report today.

The estimate from the New Economics Foundation is based on when emissions will reach such high levels that it "is no longer likely" the world will be able to avoid a 2C rise in average temperatures. "We know climate change is a huge problem, but there's a missing ingredient of urgency," said Andrew Simms, policy director at the foundation.

I am sure that I can confidently predict that the planet will not avoid passing through the 450ppm level of emissions. Given the time taken for the current trade negotiations it will take 100 months just to get some sort of compromised, half baked climate change agreement.

Perhaps the 4 billion that are predicted to suffer severe water shortages and the ensuing migration and inevitable armed conflicts will speed things up. This article also gives me a chance to write about "potentially catastrophic" events.

Andrew Simms (one of the authors) discusses in more detail also in the Guardian. This is an article worth reading in full.

The final countdown [Guardian]

The concentration of carbon dioxide (CO2) in the atmosphere today, the most prevalent greenhouse gas, is the highest it has been for the past 650,000 years. In the space of just 250 years, as a result of the coal-fired Industrial Revolution, and changes to land use such as the growth of cities and the felling of forests, we have released, cumulatively, more than 1,800bn tonnes of CO2 into the atmosphere. Currently, approximately 1,000 tonnes of CO2 are released into the Earth's atmosphere every second, due to human activity. Greenhouse gases trap incoming solar radiation, warming the atmosphere. When these gases accumulate beyond a certain level - often termed a "tipping point" - global warming will accelerate, potentially beyond control.

All this is well known (or should be to G&E readers) as are the feedback mechanisms but Simms' description is a good one:

Because of such self-reinforcing positive feedbacks (which, because of the accidental humour of science, we must remind ourselves are, in fact, negative), once a critical greenhouse concentration threshold is passed, global warming will continue even if we stop releasing additional greenhouse gases into the atmosphere. If that happens, the Earth's climate will shift into another, more volatile state, with different ocean circulation, wind and rainfall patterns. The implications of which, according to a growing litany of research, are potentially catastrophic for life on Earth. Such a change in the state of the climate system is often referred to as irreversible climate change.

The other paragraph that caught my eye concerns those forward looking Cubans.

In terms of what is possible in times of economic stress and isolation, Cuba provides an even more embarrassing example to show up our national tardiness. In a single year in 2006 Cuba rolled-out a nationwide scheme replacing inefficient incandescent lightbulbs with low-energy alternatives. Prior to that, at the end of the cold war, after losing access to cheap Soviet oil, it switched over to growing most of its food for domestic consumption on small scale, often urban plots, using mostly low-fossil-fuel organic techniques. Half the food consumed in the capital, Havana, was grown in the city's own gardens. Cuba echoed and surpassed what America achieved in its push for "Victory Gardening" during the second world war. Back then, led by Eleanor Roosevelt, between 30-40% of vegetables for domestic consumption were produced by the Victory Gardening movement.

Time to go and harvest some runner beans and potatoes from my back garden.

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