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Many others have pointed out that this article lays out a fairly gloomy and bleak image of climate change without proposing solutions because the executive summary is mainly meant to raise issues, not proposal solutions. However, I am surprised, in light of our reading on agriculture and the potential mechanisms for development, that the authors do not mention how climate change does or does not play into current initiatives for agricultural enrichment (e.g., traditional sector enrichment). I would be interested to see where the World Bank sees traditional sector enrichment fitting in with climate change, especially because the executive summary raises the issues associated with increasing urbanization as well. This means that Gary Fields’ proposed development strategies might all be infeasible (modern sector enlargement, modern sector enrichment, traditional sector enrichment). If agricultural yields are decreasing and becoming more irregular, populations of cities are increasing while informal structures within the cities are also increasing, and cities are not enhancing their development, does Gary Fields present a potential strategy here? Or do we need to create new ones? I thought that the tie to globalization was particularly interesting as well, because I typically don’t think of climate change in the realm of our globalized world. They say that those dependent upon food imports will have increasingly volatile import options, causing risks that surpass location. Importantly, this is one aspect that can target those of us in the US, Europe, etc. because our food imports impact us directly. It is far more easy to discount issues that only impact far-off places. Many people have raised the issue of localization and how this article does a good job of localizing climate change impacts but does not do a good job of making climate change relevant to us. By including the argument for food import price increases and volatility, the information presented by the World Bank becomes more relevant. While food imports clearly aren’t one of the most drastic outcomes of climate change, they are directly applicable to us, so they do have the potential to increase action that intangible numbers about rainfall in Asia may not.
As Sam and Bennett already said, this role of this paper is to expand the goals of microfinance and holistically look at what all it can accomplish in different contexts. It isn’t a panacea for poor households but it also isn’t doomed as a development mechanism. Many MFIs have difficulties with loan uptake and repayment because often, as the article states, microloans benefit household’s well-being in ways other than business creation (e.g., savings, health, education inputs). While I agree with Sam and Bennett that these outcomes are also highly beneficial and shed light on the good that microfinance can do, it doesn’t support microfinance as an institution. If MFIs are profit generating and are giving out loans rather than grants, they must have a guaranteed payback to remain in business, or they would be a micro-granting institution. Of course, I’m not proposing that MFIs fail if they increase savings without business expansion, but they may need to expand their mission if that is the overall goal. I wanted to focus briefly on the discussion about insurance. The authors state that Gine, Menand, Townsend, and Vickery (2010) found that increasing access to insurance increases farmers’ propensity to plant risky, rain-sensitive crops that provide higher profit. I would be interested to see how the introduction of insurance would affect agroforestry, our main discussion last week. Theoretically, this would allow farmers to take higher risks by partaking in a farming activity (agroforestry) that would be more risky, new to them, required rain, etc. I don’t think insurance was a factor in Professor Casey’s paper, so it would be interesting to think about how this would affect the results.
Other students have rightly brought up the importance of environmental sustainability and human capital accumulation, but few have acknowledged or questioned how these initiatives tie into the development of an area as a whole. Casey’s paper and analysis all tie back into the traditional-sector enrichment theory that our textbook mentioned. Rather than focusing on increasing industrial or urban growth in Mexico, we should focus our efforts on rural, traditional enrichment through agroforestry. His argument adds to the statement first put forward in the text that traditional enrichment enhances development. By adding in the argument for environmental sustainability, he further enhances why traditional development should be emphasized. It not only increases agricultural productivity and the well-being of those on the farm, it improves the quality of the environment. However, his paper raises a worrying point as well. If we only focus on agroforestry and improve the productivity of areas, is there sufficient infrastructure for these potential gains to be realized? Are there financial markets in place, potential for farming beyond subsistence farming, etc.? The textbook’s chapter on agriculture described the levels of transition in farming, with subsistence being the first and least developed. However, to move away from subsistence farming, countries must have the means to further development beyond the agricultural sector. I want to echo the point that Sam first raised pertaining to the train-the-trainer programs. Others emphasized this point as well: formal education may not be seen as a practical solution to low human capital, so practical training programs are likely better solutions. Additionally, locals already performing agroforestry and seeing success likely have more community entrée and are more trusted than outsiders. While development economics has begun to see the value in bottom-up approaches, it is important to re-emphasize that agroforestry not only come from initiatives within the country, but that it comes from current farmers already practicing agroforestry that have seen success. I was surprised that over 30% of the sample already practiced agroforestry, a relatively large amount. So, it seems as though there is a large enough pool for trainers for others in the area.
Toggle Commented Nov 5, 2014 on Econ 280 for Thursday at Jolly Green General
I think it’s important to further tie in the discussion of political accountability and choice that HeeJu and the authors from The Economics of Being Poor raise. Shultz and Lewis state that investments in human capital in low-income countries are successful in improving economic prospects if they are not dissipated by political instability. They also state that, in regards to agriculture, incentives set by governments are often not compatible with increasing agricultural quality. Sachs and Malaney’s piece mentions at the end the Global Fund to Fight HIV/AIDS, Tuberculosis, and Malaria, which had just been started when the article was published in 2002. The Global Fund is largely underway and has seen great success. However, what is not shown on their website or in many reports is the fact that many countries have had to refund money that was mismanaged in the political and health systems. While in Ghana, I learned that they had to return much of their grant due to embezzlement, and Ghana is often considered one of Africa’s most developed and stable nations. Uganda had to repay close to $1 million (USD). This is not meant in any way to say there should be less international investment in these projects. But, when we begin to think about the micro-level issues that many students have raised regarding malaria’s debilitating effects, including lower worker productivity, higher fertility, lack of women’s empowerment, etc., it is important to remember that these micro-level changes may not come about if governments continue to misappropriate funding for these diseases. As Daphine mentioned, these articles are primarily concerned with improving peoples’ capabilities, but, if governments continually misuse funds, is there a way to ensure everyone reaches a dignified level of capability?
Toggle Commented Oct 30, 2014 on Econ 280 for Thursday at Jolly Green General
Daphine raises a concrete question that gets at what a few other people termed as Udry’s lack of context and localization: where will the money for these subsidies come from? By applying a blanket approach of subsidies, he not only ignores social context but also political and economic feasibility. It’s useful to look at subsidies for education in the context of Tuesday’s discussion on urbanization and decentralization. Many claim that decentralization is a panacea, but, as we all know, that is not the case when governments are corrupt, local resources lacking in funding and human capital, etc. I think it’s interesting to look at Udry’s solution in the specific context of slums in these urban, decentralized areas. Many slums have been annexed as their own towns. So, there is no mechanism to give out subsidies for education when the slums lack the finances. Additionally, even if there were, quality of schools is likely very low in the slums, if existent at all, as many houses are illegally built, so there may be a skewed view of the actual child population in the area. Thus, while subsidies do provide part of the solution, they only do so in specific contexts. It is also important to remember that the long term benefits from subsidies for education do not come for decades later, so we have not yet seen a subsidized school program come full circle. While most (including myself) remain optimistic about the effectiveness of such programs, we cannot yet claim that they have been a large success. A final point that Udry makes that struck me was his notion of agency, a topic most people haven not touched on. The costs and benefits of child’s labor versus education are felt by different parties, with families experiencing benefits, children experiencing costs, and parents making the decisions. Here, the ethical argument is more obvious, as we discussed on the first day of class. Amartya Sen and Martha Nussbaum both write on different facets of the capability approach, which states that all people deserve to be given the capabilities to choose their functions, true freedom. Nussbaum specifically talks about agency, as each person deserves the respect of his/her society to be given capabilities. But, if parents are making these decisions that reflect the long-term well-being of their children, do the kids have capability in the first place? If not, should they and how do we change that? Again, not exactly quantifiable but something important to think about as we consider child labor and the capabilities framework.
Toggle Commented Oct 22, 2014 on 280 Paper for Thursday at Jolly Green General
The other bloggers seem to have come to an agreement that models should be used with caution and that we all must be cognizant of what we take away from them; they are a double-edged sword. The contrast between Rodrik’s emphasis on individual case studies and the importance of being context specific with Krugman’s emphasis on general models is striking and raises many questions, as these two seemingly opposing thought processes are in the same field. I’m not sure how accurate this is, but it seems that models may be more fitting for certain variables but not others. For instance, when modeling education’s impact on child health, the production function is fairly worldwide: there is a positive relationship but there are diminishing marginal returns. However, when modeling Nepal’s transition to the modern sector, the model may not be so clear. Lucy said in her blog in relation to her public policy class that models should ‘order and simplify reality.’ However, the reality we focus on in public policy (Pol 232) is specific to the U.S. While a model may be useful for the bureaucratic system of America, it’s likely not useful for comparing development strategies between Nepal and Ghana. Nepal got a new government system in 1996, is largely influenced by the caste system, and has much religious strife between Hinduism and Buddhism. Ghana obtained its independence in 1957, has a large divide between the North and South and the many ethnic groups, and constantly faces resource extraction issues. I would argue that no model should be used to compare the development possibilities for these two countries. So, while the simplification of models does allow us to gain some knowledge, maybe they should be confined to certain sectors of development economics. Human capital models but not labor market ones, etc.
3. Having taken International Political Economy (IPE), as HeeJu is in right now, it is the first time I have seen an economic and political economy perspective come together. As she says, Rodrik’s paper further emphasizes how developing context is necessary. However, I do not think he places as much emphasis on the types of context needed. In Paul Collier’s book The Bottom Billion, he hones in on the conflict trap, natural resource trap, being landlocked with bad neighbors, bad governance in a small country, and how these four components intermix with each other. While Rodrik is correct to address the need for context, he does not dig into how different components of context often play into other components as well. Obviously, this is a short paper that gives an overview of the problem, but he should note that underdevelopment in one sector and corruption in another often create magnified barriers. For instance, the current Ebola outbreak is wreaking havoc on many countries, but those in conflict zones and war areas are facing increased harm. Not only do these countries not have the healthcare institutions in place, but they lack just governments. Clearly, these areas do not have sustained development. As Rodrik states, sustained growth must be able to withstand exogenous shocks, which, I claim, should not be restricted to economic ones. However, we see the international community responding to the situation in these countries with blanket-statements. They are the ‘Ebola-affected countries’ but no one seems to recognize that their situations vary greatly. Take, for example, this article, which focuses on the international funds necessary to stabilize the economies of these countries: An interesting point that Daphine made was the lack of mention of equality, which others then substantiated by saying that this paper should account for poverty and absolute poverty. While Rodrik mentions social institutions, he doesn’t specifically address human capital and its importance. I too think it would be very enlightening for him to incorporate equality into his argument to see where this would fit. I would assume that human capital accumulation is what allows the sustained growth he speaks of. If we only say ‘institutions’ without specifying how and if they should work to increase human capital, then we do not get at the whole picture.
Toggle Commented Oct 1, 2014 on ECON 280 Paper at Jolly Green General
2. Chandler raises the interesting point that coping mechanisms of men and women in poverty may differ, so, when analyzing how women and men spend their resources, the distinct ways in which they handle stress may play a role. If men do become more self-centered, then their spending on cigarettes and alcohol may be partially explained, and, if women become more empathetic, then their spending on their children may be partially explained. But, I’m not sure how, in an economic study, we would be able to isolate the effect of how stress specifically effects men and women’s financing decisions. This problem arises both from collinearity and endogeneity; stress is likely related both to the dependent and other independent variables. From a theoretical standpoint, I would be interested to see how women’s empowerment alters both women’s and men’s stress levels. Different types of empowerment may affect stress levels differently, as more secure property rights likely decrease the stress that women have regarding their land but increasing women’s job market opportunities may cause more stress because they are no longer assumed to stay at home but now must navigate the formal job market. Additionally, women’s empowerment may cause men’s stress levels to go down, as there is now another income earner in the family, which then may cause husband’s selfish spending on cigarettes and alcohol to decrease, thus multiplying the effect that women’s empowerment has. One interesting point that Duflo makes in her paper is the distinction between institutional and behavioral effects. On page 1055, she states that improved access to health services, through health insurance for free medical care for the poor, disproportionately helps girls even if parents do not change their behavior; this is in the first section on how economic development effects empowerment. However, as she states on page 1065, increasing educational opportunities to women has more positive impacts on child health by allowing them to provide better care, which requires that women change their behaviors; this is in the second section about how empowerment effects development. So, one way in which this paper can be interpreted is that economic development (by changing institutions) and women’s empowerment (by changing behaviors) are endogenous, as Austin said earlier. Institutions effect behaviors by creating the environments for change to occur and behaviors effect the institutions in place by the effect they have on a community. As we move forward with this discussion, it is at helpful for me to think in these terms to fully grasp to two sides of the same issue that Duflo is addressing.
Toggle Commented Sep 25, 2014 on ECON 280 paper #2 at Jolly Green General
Banerjee and Duflo’s article gives a holistic overview in regards to the economic lives of those living on between $1-2 a day from across the world. By giving a large breadth of examples from education and healthcare to savings opportunities and micro lending, the article adequately addresses many aspects of life that may be fundamentally different for the extremely poor in underdeveloped nations. In response to Sam’s comments above, I think there is more to the alcohol and tobacco piece that needs to be addressed. While these two components of consumption could be categorized alongside entertainment, TV, and others, it would be wrong to simplify them to that extent. These indicators may well be casual alcohol consumption and cigarette usage, but they are likely addictive behaviors, which would better explain why such a high percentage of the poor list them as expenditures. Economic literature on rational addiction and addiction discounting further explains the concept whereby alcohol and nicotine addiction leads people to discount the health and monetary benefits of quitting. So, they actually get more utility from continuing these costly and destructive behaviors. Thus, their behavior is economically rational, however counterintuitive that may be. In better news, this literature also states how education programs, health interventions, and social support, among other factors, have the possibility to lessen addiction discounting and make people realize the true cost of alcohol and tobacco usage. The potential for education and health then ties back into Banerjee and Duflo’s article by emphasizing the lack of high-quality education and preventative and context-driven healthcare that many of these countries are experiencing. Without trained health workers that understand the biological and social factors of addiction, healthy social networks that can support people through quitting, and more, smoking and other addictive behaviors will continue to consume a large portion of people’s incomes. Additionally, if we consider the education, health, and social components of these behaviors to be mutually exclusive, we also will see no difference. While the article likely categorizes its sub-topics for the sake of simplicity, it is critical to emphasize how inextricably intertwined they of these issues are.
Toggle Commented Sep 17, 2014 on 280 reading for Thursday at Jolly Green General
Gladden Spit and Silk Cayes I found the stratifying methods that this study was conducted in to be incredibly unique, as both Bess and Holly pointed out. By dividing their research into visitors, non-visitors, local community members, fishers, and tour operators, the research was able to tap into previously unexplored arenas. Most of the research we have looked at, and the research we will be conducting, focuses on visitors and non-visitors, but does not directly measure the local population and fishermen specifically. The emphasis on the local population and fishers was very intriguing, as they are often considered subordinate to visitors in evaluations. What I had not previously noticed, is that non-use values are also often left out of valuations, which further undervalues the subject of research. The researchers here successfully addressed both non-use values and the local populations. I agree with Bailey that the fishermen and locals both seemed knowledgeable and positive about the MPA’s and raising entrance fees. These findings counteracted my preconceived notions that locals would feel that higher fees were concentrating costs while globalizing benefits. The researchers correctly point out that there are indirect benefits received by the communities from protected areas, thus higher access fees are not as much of a problem. However, the study also does a good job of identifying in what sectors different populations would be more willing to pay higher fees and the extent to which is it moral and feasible to do so. They understand that we should not concentrate fees locally, but that some fees should be aimed locally. This article also provided a more positive outlook on the local communities, as even though fishermen saw initial losses of income from the MPA, they see the need to increase protection of the reefs to sustain their livelihoods. More so than other studies, this one seemed to portray locals as having a high awareness for the functioning of marine ecosystems in that they understood short term costs and long-term benefits. They also showed this numerically, as costs are only about 12% of total benefit, so there is a very high return on investment. Lastly, there seems to be many education and job-training opportunities for locals, so the negative impact of restricted fishing access is not as detrimental as previously thought. This is encouraging to policy makers, as Holly pointed out. Not only are tourists willing to pay higher fees, but the local communities are as well.
Toggle Commented Apr 26, 2013 on Un Belizeable!!!! at Jolly Green General
Coastal Capital: Belize This article provides a well-rounded summary as to how coastal and marine ecosystems provide substantial goods and services to Belize and its economy. They use measures of tourism, fisheries, and shoreline protection to account for their contributions to the national economy and the impact that healthy coral reefs and mangroves have on these specific industries. They recognize that coastal development, overfishing, and pressures from tourism are harming these industries. They use economic valuation rather than non-market valuation, which we have been emphasizing more in class. They recognize that there study disregards consumer surplus, which could me measured by contingent valuation using WTP methods to complement their findings. Because this economic valuation has typically been done in the private sector, this new focus on public sector issues allows policy makers to better focus on large-scale and long-term projects with social benefits and costs in mind. They identify land that is vulnerable, shoreline that is protected and stable, how much stability is attributed to coral reefs/mangroves, and the damages avoided by coral reefs/mangroves. It would be interesting to see their assessment of replanting coral reefs in areas where they are currently dead and/or seawalls have been put up to protect storm surges. Because this is specifically an economic valuation, measuring the upfront costs, long-term benefits, and increased stability would be a very telling measure that we do not currently have. One concept that I found odd was how they valued fisheries. They indicate that their measures undervalue fisheries because they disregard fish traded informally, which I assume includes subsistence fishing used to feed families. Because this was the sector of fishing most discussed in other articles, I find it disconcerting that it is disregarded here. Because much conversation about the environmental issues in Belize is in regard to local fishers that provide for their families, economic valuation should include assessments of this industry specifically. Additionally, later in the article the researchers state that Belize should include coastal developers in their discussions of funding, regulations, etc. However, they do not include the local population and/or fishers. These people should be included in these conversations so that the best options for future fishing regulations and job training can be implemented.
Toggle Commented Apr 25, 2013 on Un Belizeable!!!! at Jolly Green General
This brief article highlighted one of my areas of interest: ecotourism. I have been working on a project with Professor Kahn and WLSC involving ecotourism in rural Brazil, so seeing it enacted in a marine environment is an interesting twist to what I have previously studied. The article lays out the current lack of knowledge of whale sharks and the difficulties in creating ecotourism around this industry. Due to migratory factors, a lack of surety in seeing whale sharks, and the lack of public awareness, the immediate idea of ecotourism seems bleak. However, through time, the researchers conducted surveys and found that tourists were usually willing to pay at least $55 to swim with whale sharks. Because this article was written in 2007, I wonder if a lessening of the information gap is the reason that whale shark trips now average at about $110. The gap in information was an issue that the researchers originally identified, but we have seen in Belize that people are willing to pay double what the researchers claim to be maximum WTP. I wonder if this is causal. They state that buy-in to ecotourism for whale sharks has continually increased, indicating that ecotourism is becoming more population, and local communities are increasingly more willing to participate in these programs. Because one of the articles for class today emphasized the need to retrain locals to conserve marine environments, this is a promising finding. Ecotourism is undoubtedly an ideal method for retraining subsistence fishers, as it allows the local economy to grow while promoting tourism and increasing conservation of the environment. However, I would wonder what other activities are available. The article pointed out that diving and snorkeling are common, but for a full Ecotourism industry to operate, there needs to be an itinerary of activities. I do not doubt that there are many options for recreation, as Belize has plenty, but in each location where this is implemented, we must keep in mind that whale shark sighting alone cannot make up an ecotourism trip. Although this in itself could be, decreasing marginal returns indicate that tourists decrease their willingness to pay after each successive trip of whale shark sightings, so we must incorporate other sustainable activities into this industry.
The previous blogs give robust summaries of this article, stating that we must delve further into non-market valuation, extend its scope, and more closely tie it to policy if it is to have an impact. This is undoubtedly true, as Bailey mentioned the black box between theory and policy that continues to exist. Acknowledging this problem is quite a step on the trajectory, but it is only the first step of many. I wonder if there are updates to the scope of research done since this article was published in 2007. I may have a skewed view because we have focused so much on non-market valuation done in marine environments, but it seems to me that the current research addresses many of the holes in the data that the authors address. I would be interested to see an updated study that evaluates the current knowledge base. I also wonder why choice experiments were not discussed, as these allow the researcher to value multiple assets at a time rather than just one. It would also allow the researcher to see how much one asset is valued relative to another through a non-use value method, something that hedonic price methods do through use valuation. Finally, I am curious as to why much research has been done regarding beaches but not on other aspects of marine environments. I know that tourists, and, hence, sources of money, are very concerned with beaches, but this disregards the whole seascape that we discussed in class. If we are looking at long-term effects, we must consider the whole seascape. If we value only beaches, we disregard sea grass, mangroves, corals, and other aspects that are integral to beaches. This article seems to state just what articles from yesterday warned against: valuing coastal ecosystems in segmented forms is detrimental to the entire seascape. We must address this issue and approach this problem holistically if we are to make policy decisions that alter long-term health of beaches. The authors emphasize using different valuation methods, but they remain focused on singular assets; we must focus on multiple methods and multiple assets
Toggle Commented Apr 24, 2013 on testing at Jolly Green General
Trade-Offs Between Conservation and Socio-Economic Objectives In Managing A Tropical Marine Ecosystem This article’s integration of social, economic, ecosystem, and conservation factors makes it very thorough but nuanced in its description of the current issues involving managing marine ecosystems. I agree with Bailey and Holly that we must consider long-term consequences in conservation policies to decide the best path to take. However, I do not think that it is economically feasible for subsistence fishing communities and underdeveloped areas to choose policies based on only long-term goals. The discount rates for these areas are incredibly high, and the net present value of harvesting fish takes precedent over hypothetical long-term benefits. The article states this, as it emphasizes the need to retrain fishers and others that work in environmentally unsustainable industries. Bess touched on this when she mentioned our discussion in class on the difficulty in retraining fishers to become tour guides. If retraining and education is indeed feasible, then it should be enacted, but not all governments have the capability to do so, and it is ambiguous as to whether this training would occur on a large scale otherwise. When there is a lack in alternative livelihoods, mandating a decreasing in fishing is simply not feasible. Additionally, the article pointed out that we could eliminate fishing subsidies. However, as we discussed in Econ 255, eliminating subsidies for those who fish simply for nutrition for their families and basic income is neither moral nor easy to implement. Because of these many barriers to underdeveloped areas, the article’s suggestion that public funds be raised for high conservation levels is incredibly important. These funds must be funneled into job training programs and provide a viable method of income for subsistence fishers to end overfishing and other ecologically degrading endeavors.
Toggle Commented Apr 24, 2013 on Three more for Wednesday at Jolly Green General
The Willingness to Pay-Willingness to Accept Gap Revisited: The Role of Emotions and Moral Satisfaction This article’s juxtaposition of WTP and WTA further put into perspective the discussions we had in Econ 255 about this topic. We had affirmed that WTA was usually higher than WTP, but I had never fully understood why without this argument based on emotions. I agree with Bess that the most telling part of the article was its focus on omission vs. commission. Omission is less blameworthy than commission. For this exact reason, the commission associated with WTA makes people more likely to donate. What I found very interesting for our specific course motives was the mention of public goods vs. private goods. Because public goods often have a higher intrinsically moral obligation associated with them, I wonder how that would apply to marine environments. I would assume that the role of asymmetric information is very large in coastal environments, so although they have public goods aspects, people would operate from a private perspective. If there was no asymmetric information, people would feel more morally responsible for harm done to coastal ecosystems and would act accordingly. For policy makers, it is thus important to remember that public goods have more obvious ethical dimensions than do private goods, so appeals to emotions are very useful and will harbor significant results.
Toggle Commented Apr 24, 2013 on Three more for Wednesday at Jolly Green General
Ecosystem services of the tropical seascape: Interactions, Substitutions, and Restoration I agree with Bess that this paper pinpoints the difficulties and previous failures in attempting to restore mangroves and coral reefs. She states it well; establishing an ecosystem does not guarantee resiliency. The simple technological implementation often shows short-term success but fails to predict long-term success. Because we must focus on a multifunctional ecosystem whose success is highly dependent upon surrounding areas, this presents a large roadblock for highly depleted areas. Along these lines, what I found most startling was the grim outlook for underdeveloped and developing countries. These programs are incredibly expensive, especially for coral reefs, in the realm of funding, collaboration, employment, and shear length of projects. This drastically reduces the capability of underdeveloped, coastal economies to restore depleted ecosystems. Additionally, this will create a snowball effect as depleted ecosystems are then more vulnerable to natural disasters, and coastal communities, such as those in Southeast Asia, are hit by tsunamis and hurricanes. This further damages their economies and capability and this vicious cycle continues. Much damage to ecosystems in these areas is not caused by industrial coastal development, but subsistence fisheries and other necessary livelihoods, so deciding whom to burden the restoration of ecosystems with is a difficult question. The article correctly states that prevention gives much better results than the cure, but in underdeveloped areas, prevention may not be possible on the scale that it is in better-funded areas. That being said, we must recognize that the question of ecosystem restoration and substitution does not have a homogeneous solution for all coastal nations.
Toggle Commented Apr 24, 2013 on Three more for Wednesday at Jolly Green General
Economics of Marine Ecosystem Goods and Services These sections of Schuhmann’s paper were a well-rounded introduction to the course and economic valuation. It is most important to emphasize that valuation includes measurements of both human well-being and economic value. Ecosystems provide supportive, regulation, provision, and cultural services, all of which must be considered in valuing marine ecosystems. Value is also defined by its worth to people, not the actual cost or money value. The Total Economic Value is then different than simple value because it considers social values, which often differ from individual values. This was material we covered in 255, and it is very important to keep in mind that social costs and benefits must be considered in valuations and policy decisions, as individual valuation is not conclusive. We must also look at environmental impacts on a large scale, as we did in 255. Deforestation leads to runoff in subterranean rivers, which goes to freshwater, mangroves, sea grass, reefs, and then the open ocean. When looking at the big picture, we can better see how the four categories of services are within marine ecosystems. With this large scale, we can better conduct and understand the valuation methods that Schuhmann mentions.
A Practitioner’s Primer on the contingent valuation method This article walked me through the process of contingent valuation method in a much more thorough manner than I had previously approached, but I agree that it was pretty overwhelming. It first set out the different types of non-market valuation and then went through categories of CV, such as mail, phone, and in-person. I had been taught that mail surveys were the least desirable because of non-response bias and lack of follow-up, as Holly mentioned, but this article shed light on the fact that they are often the most feasible. The importance of conciseness and mutually exclusive response categories was emphasized more than I thought it would be, revealing the importance of keeping the audience engaged. The valuation scenario was the most interesting, as it forces the researcher to tangibly write out the current scenario they are testing, a task that does not seem intuitive. The different suggestions for how to phrase WTP questions, such as by behavior and follow-ups was also interesting, as it highlighted strategic ways to avoid biases and how to handle them when they occur. The section associated with convenience samples seemed most applicable, as this is what we will be doing in Belize, I assume. We will have to weight our responses based on demographic questions and strategically decide how to best conduct follow-ups. We must remember to report our research methods before analyzing to enhance the quality of data. This article was helpful in that it depicted hypothetical situations that we may run into with our experiment such as selection bias or non-response bias. Now that we have a tangible survey topic and guideline, this guide will be very applicable in useful in the upcoming weeks.
Are Tourists Willing to Pay Additional Fees to Protect Corals in Mexico This article is very similar to those we read in Econ 255 and clearly states the background research, survey methods, and responses needed for the reader to understand the methods by which non-market valuation has been conducted. The article starts by describing the need for coral reefs for biodiversity, the economy, fisheries, and tourism and then states the multiple human-impact threats that are currently increasing stress on the environment. The article uses a contingent valuation method to determine tourist’s willingness to pay for a program to protect the coral reef ecosystem and assisted ecological services. The survey included information on the current benefit of coral reef ecosystems, their current physical state, and current efforts to combat degradation, and the survey also collected demographic information of tourists. The model used demographics, survey variables, and environmental preferences to predict WTP for further protection. They found that WTP and time of travel were the most statistically significant variables and that a collection of funds dedicated to coral protection would benefit the environment and provide a base for economic development along the Mexican Caribbean. What I found most interesting was the discussion on protest bids, as it describes why some were not willing to pay to support coral protection. I would be interested to see comparative studies in other countries on the reef to see if the prejudice against government control changes based on the country or if it is simply a prejudice against federal control. I also wonder if education on the local area would change the opinion of those who believe local businesses should pay the cost. Subsistence farmers and fishermen in the area cannot necessarily pay the cost, and the benefits are much more widespread than the local area. Many benefits from tropical ecosystems are global, thus forcing local businesses to pay for costs is morally unsound and infeasible. Education of this sort may eliminate some negative responses. Finally, because many tourists favored an airport tax method, I wonder if they would have a higher WTP if the fee was in this specific form in the survey. This paper does provide promising information that protecting corals is feasible. Continuing to explore the reasons that people responded negatively will hopefully provide the necessary information to increase conservation more so. Additionally, it will be important when increasing conservation fees, to keep a close watch on coastal development, as it could easily counteract conservation efforts in the reef if not directly linked to these conservation efforts.
I agree with the other student’s sentiments that Hausman’s negative comments on CVM are extreme. I agree fully with Cort in his comment that disregarding CVM may also disregard any type of non-market valuation in certain situations. When the object of value is hypothetical, there is no way to conduct hedonic pricing or travel cost methods. Also, in developing and underdeveloped areas, it may not be feasible to conduct revealed preference methods. In some situations, it may also not be feasible to conduct choice experiments if there is primarily one valued item you are measuring and there is a lack of comparable items. Additionally, a researcher could make the situation less hypothetical. For instance, in Professor Casey’s Spring Term class, we may conduct an experiment on campus before going to Belize in which students are asked their WTP for conservation of wale sharks and given $10 for participation. They would then be asked to contribute their WTP value from their $10 after the experiment. This would make CVM highly credible. Finding other methods such as this one and realizing that CVM may be the best estimate in certain situations indicates that CVM is not hopeless but necessary. It is not a perfect measure and is subject to biases, but that does not mean we should ignore it and let the tragedy of the commons continue when other methods are not available.
I echo both the excitement and worry from previous comments that will come from building this solar power plant in California. It undoubtedly marks a movement from large firms to more sustainable energy practices, but it does not indicate a widespread shift. I agree with Wen that possible subsidies by the government should be looked into, at least to cover overhead costs. The long-term benefits of these technologies outweigh the costs, and solar energy specifically has mostly upfront costs. That being said, some sort of loan system could be implemented by the government as companies shift to solar power. The company would then pay providing a loan to cover the cost back in a sufficient time frame as it begins to reap the awards of having solar power rather. This would remove the disincentive in a more expensive energy source for companies. I agree with Alex that we must look at the site-specific characteristics of where this facility is being built. Just because it worked in the Mojave desert does not mean that it will work in Southern California. More importantly, that definitely means that it will not work in Washington or other areas of the Pacific Northwest with low amounts of sunshine. While this seems obvious, it must be pointed out from a practical perspective. That being said, there is an image in Kahn’s book that emphasizes the shift over time to different energy resources. As time goes on, the costs increase for coal and oil, and we will eventually end up in an alternative energy world. This company is doing a successful job in transferring to alternative sources and other companies should follow step, although that does not necessarily mean through solar power. Other alternative resources, such as wind power, also have large upfront costs that are short-run, so a loan system could be implemented here as well. I have by no means addressed the nuances of a loan system, but it could be a possibility when incentivizing more firms to switch to alternative energy resources on a large scale.
I agree with Holly’s comment that the emphasis on communication between companies, government agencies, and local communities is closely related to Laura Henson’s talk. Laura emphasized the importance of communication between disciplines and we see this recommendation in action here. Additionally, Environmental Justice takes the importance of communication in conjunction with a government program to combine communication with moral suasion and potential economic incentives to have a magnified impact on communities. This holistic approach is a refreshing policy that properly addresses a multifaceted problem. By having leagues across the country, will better be able to address rural areas, Indian reservations, food deserts, etc. to create localized agendas that are often lacking in policy decisions. For this action to be successful, each location must take into consideration their specific region and its resources at hand. With the emphasis on low-income and minority communities, Environmental Justice should work with public housing locations and resettlement agencies to ensure that there is community across all sectors. Working with housing operators will build trust and communication and will help these agencies decide where to locate new public housing facilities in relation to highways and factories, when possible. While these actions are very positive for the US, we must remember that some areas in the US are not environmentally safe, but not due to heavy traffic, subpar construction, and polluting factories. For instance, places on the Mississippi Delta have heavily polluted water and are in very rural locations without access to environmental regulators. While Environmental Justice seeks to ensure greater access to health care, clean water, etc. it cannot only focus on areas with heavy emissions pollution. If it encompasses multiple facets of pollution in the US, it will have a substantive and sustained impact on these areas.
I agree with Charles; we must make this issue bipartisan. We can reminisce about the times when climate change was not part of a party’s agenda, but for action to occur, we must address the issue objectively from a humanitarian standpoint, not a political agenda standpoint. The cap and trade policy for SO2 sparked international movement, so we have seen how large an effect our policies can have on the global sphere, and it’s simply frightening that labeling this policy as “liberal” is preventing global action. When we think about our actions in a global setting, we must consider the ramifications that our inaction will have internationally, as stated in the World Bank’s article “Turn Down The Heat.” Our lack of action is increasing ocean acidification, sea level rises, decreases in crop productivity, etc. We cannot think about this as a domestic issue that exists on a political agenda. Additionally, I agree with other students that emphasized the need for technological progress and research and development. If we are keeping the discussion around cap and trade, lowering our marginal abatement costs will decrease the price of permits, so the conservative argument that it is “cap and tax” proves faulty when we can lower the price by increasing research and development. This argument, combined with the global outlook we should be having, is, to me, enough reason to institute a cap and trade policy on emissions of greenhouse gases. However, until we recognize the multiplied impacts that our policies will have on the world, we may not have the political willpower to make climate change a national concern rather than a political campaign strategy.
Toggle Commented Mar 11, 2013 on Another Political Football at Jolly Green General
After reading other student’s comments, I would agree that this is a step in the right direction, but it must be compared to other potential methods to fully assess the efficiency of this approach. If a carbon tax were implemented, would that have a larger effect on the number of coal plant shut-downs? If the EPA focused in on big-companies with low MAC and high emissions, would they get a bigger bang for their buck? In addition to questions of economic philosophy, I wonder how large of an impact this will have on both the greater US and the world climate. Because this effort was organized by the eastern states, does this mean that only the eastern US is benefiting from reduced carbon emissions from coal? Also, is this even economically and environmentally the most feasible option if there are other industries with lower MAC’s? For instance, agriculture has a lower MAC and accounts for 14% of CO2 emissions. An EPA regulation on agriculture would also promote sustainable agriculture throughout the country rather than in localized geographical areas. This would also be more easily transferrable to the international sphere than would be command and control on coal plants because it is applicable to more nations. This being said, these EPA actions are a step in the right direction, and we should consider them the first step on a trajectory, not an end in themselves. We cannot stop research and development now that we are switching to more natural gas; we cannot become complacent.
Black carbon emissions are linked closely to carbon dioxide emissions in this article, as both are concentrated sources of global warming, but that does not mean that the solutions to both pollutants are equivalent. They present different effects and call for different solutions. Unlike some comments, I do not think that cutting black carbon is equal to cutting carbon dioxide. For one, black carbon has mixed effects, which makes it a more difficult situation to analyze. Black carbon also has instantaneous effects, so the discount rate that we discussed in class today would not have an effect. The costs today are not less than the costs in the future, so that could change perceptions on actions to take. However, that may create an incentive to pay now instead of later because it is constant. More striking to me is how localized black carbon emissions are. While carbon dioxide emissions are undoubtedly a global issue, black carbon has more of a local argument. This has significant implications for developing areas that are experiencing an auto boom, as Nick described. Not only does localization have a practical application, it has a moral and ethical one as well. Because developing nations typically have less “green” standards and are in an industrial and automotive boom, they will emit more black carbon (at least on market level) and will have to pay the economic, environmental, and humanitarian costs. Nick rightly questions who should pay for these costs, as placing them all on developing nations is not justifiable. In order for developing countries to truly develop, they must achieve industrial success before they can implement a lower energy-intensity strategy. This problem indeed makes black carbon a global issue, as the cost borne by developing nations must be partially absorbed by developed nations in order for developing nations to reach a threshold at which energy intensity declines. At this point, black carbon emissions, specifically those related to carbon dioxide emissions, will decrease, as many high-energy intensity emissions include both. This result will then place less of a burden on developing nations and help to lower global warming effects through both black carbon and carbon dioxide emissions.
Toggle Commented Feb 13, 2013 on Worse than we thought.... at Jolly Green General