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Philip Anderson
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I found this talk very interesting. Specifically, I thought the highlight of the talk was when she asked the question "why care." As she says, it is not as if the earth will be destroyed because of climate change. There has been climate change throughout history, and earth itself will be fine. Instead, we are concerned about this problem because it's all about the sustainability of the human race. She noted examples of the problems that occurred during the "little ice age" of 1600. This little ice age caused major problems for the humans, and it was just climate change within the natural cycle. Imagine the problems in the future that we could face now that we are out of the natural cycle? It's hard to even imagine. It would be interesting in class to talk about the economic consequences of glacial melting in both Greenland and Antarctica. The major problem with glacial melting are rising sea levels, which has detrimental effects for sea level communities. Some countries, such as Bangladesh, have already felt the effects of rising sea levels, as many coastal towns have had to migrate to the inland capital of Bangladesh, Dhaka. Many of these migrants are farmers that have very little skills necessary to be economically stable in an urban setting. It would be interesting to talk about the large scale economic impact of the potential destruction of sea level communities due to glacial melting.
Toggle Commented 4 days ago on Climate Talk at Jolly Green General
I think it would be interesting to investigate some of the issues brought up in chapter 17 involving agriculture. As the chapter notes, agriculture seems like a "green" activity. But it is not necessarily. There are very many prominent negative externalities that agriculture causes. This includes soil erosion, fishery degradation as well as emissions of green house gases. It seems that there has to be some sort of tax or regulation in order to reduce the negative externality. But there are obviously equity issues involved with this. A farmer's livelihood is made through agriculture, and many farmers have very low incomes. Certain taxes or regulations might bear more tax burden on low income farmers compared to others. This might be efficient, but is it just? It would be interesting to examine the various solutions brought up in chapter 17 more closely, from both an efficiency and equity standpoint. In an earlier class period we talked briefly about the water drought in the central valley of California, and how a water permit system might help allocate water more efficiently in the area. Being from California myself, I'm interested in looking into the issue. It would be cool as a class to talk about it again, now that we have had more exposure to natural resource economics ideas and material.
Toggle Commented Mar 11, 2015 on For Thursday at Jolly Green General
I think the main point of this article is that the incentives offered to these villages in Tanzania can't all be the same. Each village has their own preferences, appetites for risk and opportunity cost. Thus, while it might be logistically easier to offer all villages the same gear packages and alternative options, this will most likely cause the MDA to be ineffective. The goal of these benefits is to adjust the tradeoffs that each villager faces. While the model itself might seem overly simplistic, it can surely be used as another reference when implementing MDAs in certain area. It provides information about how villages differ in response to incentives depending on their spatial location. The paper isn't trying to provide an answer to the entire problem of MDA implementation, It instead highlights to policy makers another dimension of the problem that should be considered. It is essentially impossible to come up with a model that does anything more than that, and is easy to criticize purely economic models such as this for not representing reality. But it is not as if the authors believe this model represents reality perfectly. The findings of the article provide another piece to this interdisciplinary puzzle of MDA implementation.
Toggle Commented Feb 12, 2015 on Reading for Thursday at Jolly Green General
The study attempts to allay the inconsistency issues involved with the costs and benefits of natural resource preservation. Being able to get a better sense of the current benefits of ecotourism can help alleviate the time imbalance of value. Because, in terms of preservation, ecotourism is better than a lot of alternatives. The study finds empirically that divers value seeing more sea turtles. By quantifying this added value of sea turtles and including this value into the market price of diving in the Barbados (or subsidizing the providers of ecotourism) it could help create incentives to reduce turtle exploitation. By better understanding how much tourists are willing to pay, and creating prices closer to the WTP levels, we can create greater short term economic incentives for natural resource preservation. Price discrimination has many negative connotations, and for many markets its not optimal. However for a market such as ecotourism, where the price of the activity consistently doesn't take into account a large amount of consumer surplus, implementing some sort of price discrimination could be interesting. To do this, it is necessary to quantify the non-market benefits of ecotourism.
Toggle Commented Jan 27, 2015 on Reading for Thursday at Jolly Green General
In Krutilla's article he gives an example of market failure for rare land or endangered species. Specifically, he examines option demand, and explains a very interesting instance of the free rider problem associated with public goods. A public good has two main characteristics: non exclusive and non rival. In this case, the market fails for option demand because the good is not exclusive. In option demand, someone's willingness to pay perhaps could only reflect that the good (the species, the grand canyon etc.) exists. As mentioned in the article, people gain utility just by knowing that a certain species exists, or that the grand canyon is still there. So, if someone in Georgia purchases an option regarding the grand canyon, they have no way to exclude a local who did not pay from also receiving benefit. Option demand seems very integral to look at when evaluating why private and social returns of rare occurrences in nature are asymmetric. People all over the world gain substantial sentimental benefit from the existence of the Grand Canyon, Yet, as Krutilla points out, there are a lot of problems when a quantity of a public good is determined by the private market. I also enjoyed Krutilla's discussion and conclusions about changes of tastes and the "asymmetric implications of technology." The irrevocability aspect of rare occurrences in nature creates the inelasticity. So, as time proceeds, the relative value of these rare goods should increase as more and more manufactured goods are made. If his theory about increases in future demand for natural environments due to changing tastes and increased appreciation is correct, rare occurrences in nature should greatly increase in value. This is a very optimistic outlook that I haven't really thought about. It is easy to think about preferences as constant throughout time but that is obviously not the case. Preferences change over time. Being able to discount all of the future utility from a certain good to the present is the key in order to make a "rational" decision. But obviously it is extremely hard to be accurate in that calculation.
Toggle Commented Jan 22, 2015 on Readings for Thursday at Jolly Green General
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Jan 21, 2015