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One thing that really stuck out to me in this paper was that the reserve has no local substitutes because of its unique features, including the spawning aggregations and the whale shark visitation. Theoretically, this characteristic should cause the demand curve for visits to the reserve to be relatively inelastic. This should be encouraging to policy makers who want to implement an entrance fee, because they could make it even higher than the derived willingness to pay. While doing so might cause a slight decline in tourism, it shouldn't show too drastic of a change. If they didn't want to make the entrance fee higher than the WTP, they could at least make it equal to the WTP and be confident that they wouldn't lose customers. Bess poses an interesting question of what a comparison of this paper with our studies would reveal. It might provide insight as to how people's brains respond to being mandated to do something versus choosing to do something, or being made to pay versus choosing to pay. I would not predict that it would involve emotions like shame similar to the other paper we read about the emotions involved with WTA and WTP, but I could be wrong.
Toggle Commented Apr 26, 2013 on Un Belizeable!!!! at Jolly Green General
Kate makes a good point that the local fishers should be included in the discussions of funding and regulations. That tags along with our conversation in class today about how policy should start at the stakeholder level. One point that the article talked about that was interesting to me was the concept of a tourism multiplier. Tourists come to Belize to see the corals and mangroves and in doing so they not only pay for that experience but they also end up paying even more for food, lodging, entertainment, souvenirs, etc. These indirect, or secondary, impacts are found using a tourism multiplier. It's interesting to think about the fact that when we ask people their willingness to pay to swim with whale sharks their true willingness to pay may actually be higher than what they will respond. In their response they are not including what they will pay in addition to that whale shark experience, such as the fees for lunch and the boat trip and maybe a taxi ride to the location. Maybe these extra fees associated with the experience are part of their willingness to pay, especially if the whale sharks were the only or primary venue attracting them to Belize. However, if a group of people came to Belize to see the coral reefs and decided to go swim with whale sharks for a day since they were already there, maybe those extra fees are viewed as a sunk cost, since they would have to pay for food and transportation as tourists in Belize, probably regardless of what activity they chose to do that day. Tourism produces a large share of Virginia Beach's economy, where I live, and I can see first-hand how a decline in environmental quality decreases the tourism multiplier. The south end of Virginia Beach is pretty gross, in my opinion. It's inundated with tourists, touristy beach shops, touristy restaurants, etc. The beach and ocean is way too crowded to be very enjoyable and it's just not very clean. All the shops and restaurants are fairly cheap, granted they aren't too high quality either. The north end, however, is really only houses, with one small hotel. The beach is much cleaner, much less crowded, and it's definitely a higher-quality experience. The hotel, though not as fancy as the south end hotels, is more expensive than most of them. The only restaurant in the hotel is nothing special, but it is extremely over-priced and not that great of food, yet it is always packed. This may be a stretch, and though they are in the same city, side by side, it seems like the tourism multiplier is higher in the north end, with a higher quality beach, than in the south end.
Toggle Commented Apr 25, 2013 on Un Belizeable!!!! at Jolly Green General
Like Bailey, I also was struck by the large range of willingness to pay to swim with whale sharks in Ningaloo Marine Park. I wonder if the people who are willing to pay $30 simply do not value an experience with whale sharks to a great extent, or if there is some other factor working into the equation. A swim with whale sharks is more of a luxury market item, and so it could be that people with lower incomes have a lower willingness to pay not because they value the whale shark less but because they are not capable of paying a high price on something that is not a daily necessity. Similarly, the person who is willing to pay $900 could just be extremely wealthy and so they would be willing to spend that much money on any kind of outdoor experience. While sufficient data probably helps to correct for this difference in income, I still wonder if stated preference surveys account for differences in lifestyle and income. Just because someone is not capable of paying anything to swim with a whale shark, it does not mean that their economic value is zero. Components like this might help to explain the wide range that appears in the willingness to pay in Ningaloo.
This article gave me a different perspective on the role of government and policy makers in natural resource conservation. I was always under the impression that the research and proof was there, the government was just being slow to act because the implementation of things like a carbon tax or fishing licenses might not be welcomed by the general public. But this article posed an issue that was new to me: "the literature is generally insufficient to support effecting policy-making". After reading it, I understand why it is insufficient and I see the gaps and discrepancies that have been created. However, I, like Kate, also probably have a skewed view after focusing so much on non-market valuation in marine ecosystems and agree that current research probably addresses many of the holes addressed by this article. I would be very interested to see an updated study on the sufficiency of current literature. A big problem addressed by this article is that a lot of the research focuses on beaches but not the other components of the tropical seascape. I do not think that the solution to this problem would be to start doing non-market valuation studies on other components like sea grass or mangroves. Like we talked about in class today, most people are willing to pay to preserve sea turtles, but not to preserve sea grass, the sea turtles' habitat. If economists rely on stated preference studies to determine the economic value of sea grass, the results will not be reflective of its true value. The general public may not place a huge value on sea grass individually, but unfortunately we don't get to pick and choose which parts of the seascape we want and which ones we don't. If people value beaches and sea turtles, they inherently value sea grass; they just may not know it yet.
Toggle Commented Apr 24, 2013 on testing at Jolly Green General
It is hard for me to believe that this article is actually discussing the ability of technology and human capital to replace ecosystem services and restore ecosystems to their original natural state. I am not undermining the incredible things that humans can do these days, but the answer just seems obvious to me that humans are simply not capable of sufficiently replacing or reinventing a natural ecosystem. Nature is one thing that I do not think will ever lie in the complete control of humans. This kind of goes back to the aspect of human nature we discussed in 255: Humans have always strived to overcome and suppress nature to protect themselves, but now they are realizing that in order to truly improve their well being they instead need to cultivate their relationship with and protect nature. The natural world and the relationships within it are too intricate, complex, and powerful to ever replace or recreate with mere human capital or technology.
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 concludes that the WTA-WTP gap is typically larger for public goods than for private goods. This does not surprise me because if you receive something for a public good you are gaining to make up for your own loss but you are not making up for the loss of others, and so you are just causing a loss to everyone else. This also proves that people are at least partially aware of the concept of a public good and how their private actions affect everyone, which is encouraging towards policies that aim to internalize the negative externalities associated with public goods. The example of the "trolley problems" was very interesting to me. The results of each scenario could, in a way, be linked to the idea of omission vs. commission. He says that empirical evidence shows that acts of omission causing harm are perceived as less blameworthy than acts of commission that cause equal harm. So causing harm in a more indirect sense, by simply not doing anything at all, is less blameworthy than causing harm by accepting payment, and therefore being more involved and a part of the action. Switching the tracks of the trolley could be perceived like an act of omission because you're not physically involved in the killing of the one person. Indirectly you may be the cause, but you have no actual connection or relationship with the trolley that does the killing. By pushing the man if front of the trolley, on the other hand, you are physically and actively involved in the killing of the person, in the same way that you are actively involved in accepting a payment in an act of commission.
Toggle Commented Apr 24, 2013 on Three more for Wednesday at Jolly Green General
Trade-offs between conservation and socio-economic objectives in managing a tropical marine ecosystem I agree with Bailey on how important it is that we weigh the long-term consequences of conservation policies in order to choose the best path to take. The Pareto-frontier between the depletion index and the social benefits shows that improvements in conservation efforts lead to a decline in the number of jobs provided by the fisheries. However, it is also true that a lack of improvements in conservation efforts can also lead to a decline in employment, and this decline is most likely irreversible and even more devastating. The authors mention the collapse of the Atlantic cod fishery off the coast of Newfoundland, but they don't give the whole story, leaving out details that shouldn't be ignored but rather used as an example to learn from. (I happened to learn a lot of these details when I was writing a paper about the collapse in my environmental class) It is true that following the fishery collapse the populations of other species like crab and shrimp flourished. But this did not happen immediately. In the meantime, the collapse was a catastrophic blow to the community, which was both economically and culturally centered around the fishery. The Newfoundland population dropped significantly as a result of the sudden loss of jobs and the community's entire way of life was dramatically altered. This fishery collapse can be used as a learning tool on why the moderate trade-off of jobs for conservation efforts, though it may seem undesirably costly in the short run, is a much better choice in the long run.
Toggle Commented Apr 24, 2013 on Three more for Wednesday at Jolly Green General
A Practitioner's primer on the contingent valuation method I found this article to be pretty overwhelming. Though Whitehead clearly and thoroughly lays out the steps to creating your own survey using the contingent valuation method, he reveals the enormous magnitude of factors that must be taken into account and responded to in order to create an accurate and effective survey. If I were going about making my own CV survey, I would stick to using other similar surveys as a model for my own and then using Whitehead's article to go through and revise and improve mine. Whitehead offers many different choices, such as mail vs telephone, open-ended vs close-ended, and dichotomous choice vs double-bound approach. It's hard to know which one of all these different choices would be most effective for your specific purpose, and so using other similar surveys as models would help tremendously alongside this article in creating an accurate and effective survey. I found it interesting that Whitehead seemed to favor the mail survey, because thinking of my own family I would think that the mail survey is the mode they would be least likely to take the time to respond to. I used to watch my dad come home from work every night and go through his mail and make a pile of all "junk mail" that he would then go and recycle. I'm pretty sure if he received an envelope from someone he was not familiar of that appeared to be a survey, that envelope would join the pile of junk mail. People are busy and they are rarely able to understand the benefits they would reap by taking the time to fill out the survey.
Like Bailey and Kate, I was also most interested in the protest bids. We read a few papers like this in Econ 255 but none of those addressed protest bids, and so it never really occurred to me that some people would simply have no willingness to pay. It seems that most of the problem lies in the interviewees doubt and lack of trust in the government. Unfortunately, it is like the issue of the hypothetical bias in that even if we tell people to have a certain mindset or to assume a certain thing, we can never fully fix it. Even when we warn people of the hypothetical bias and tell them to treat it like they are actually going to have to pay, it will still be a hypothetical situation and most interviewees are probably not capable of completely ignoring that fact. Similarly, we can tell people where the money will be going and how it will be used, but some people might have that doubt and lack of trust ingrained in them and that is also something that can be very hard to ignore.
I like how Levitt begins introducing the issue by stating that the ocean is the forgotten world on Earth. He continues on how ridiculous that is, considering oceans make up 90% of the living volume on this planet, but it is absolutely true. It is also not entirely the public's fault, because opportunities to experience and interact with the ocean are limited, especially to those who live far away. Even for those who live close, most encounters include nothing more than just a walk in the sand or a quick dip in the water. It is estimated that less than five percent of the human population have had the opportunity to scuba dive and experience the wonders of the ocean. The rest of the population relies on pictures or videos to understand what exists under the ocean's surface. We always talk about how hard it is to put a value on things like air quality and water quality, but those are things everyone experiences on a daily basis. The quality of the oceans and marine life is an even more intangible value, and it is even harder to put a number value on something that most people have never even encountered. With that being said, those who have encountered and experienced the wonders of the ocean need to be held even more responsible. It can't be left up to policy makers who haven't even ever experienced ocean life to make a change. As Curtis said, the destruction of the oceans and the pollution on land make for a nasty cycle of destruction, and images of the dead fish need to be just as prevalent in public media as images of Beijing's air quality.
Something that really popped out at me, especially after having just heard Laura Henson's talk on communication, it how important of a role communication plays in achieving success. Tejada says that environmental justice "is a nexus of so many different issues. There are so many things that impact environmental justice communities, and there are so many factors that have to be understood and accounted for". There needs to be more than just a politician and an environmentalist at the table when talking about environmental justice policies. That conversation needs to include a wide range of people with all different backgrounds and many different specialties, and all those people need to be able to talk and negotiate and come up with a solution that fulfills all of their needs and expectations. He also talks about the importance of establishing relationships when it comes to changing the practices of established industries. It's interesting to me how much a lot of the problem lies in communicating different interests and different goals. I remember Kahn's book saying in the very beginning that in order to determine the socially optimal market price and quantity for a natural resource economists need to understand the environmental aspects of it. But it may also be true that they need to understand the healthcare aspects of it as well, and probably a few other aspects. In order to help Galena Park in Houston, for example, people need to have a sufficient understanding of not just the effects of diesel particulate matter but also of the public healthcare system, the public access to healthy foods, and the transportation system. Policy makers need to know a lot, but we can't expect everyone or even really anyone to know everything, which is why communication is such a huge part of improving our world in the future.
I agree with Matt that if a state like New York implemented the programs to switch to completely renewable energy sources then many other states would follow. I also agree with Cort when he says as awesome as this policy sounds, he doubts the resolve of policymakers in making it happen. I like the idea that these Stanford researchers are proposing but it is not realistic at all. It is almost a waste of time proposing such abrupt and large-scale changes such as these, even though they are what is best for the U.S. and for the world. People can say or think what they want of the political holdup in promoting energy independence and curbing global warming, but nobody can make it go away. So instead of fighting it with plans like these, environmentalists need to try to work with the political sphere. Maybe, instead of proposing a plan to convert all of New York's infrastructure to one powered by wind, water, and sunlight, start with proposing a plan that introduces the implementation of just rooftop photovoltaic systems, or just offshore wind turbines. It's no secret that, in general, people don't like change, regarless of how necessary it is. By moving towards our ultimate goal one step at a time, rather than all at once, success is much more feasable. It is by no means the most efficient or effective way to curb global warming, but, given the political obstacles we are facing, it is probably our best bet.
This article emphasizes the fact that the conservatives are "demonising their own market-based creation", referring to the cap and trade as a "cap-and-tax". I was confused about what caused such a sudden change of attitude in the conservatives. So I was looking it up on Google and found a conservative blog from 2009 that states, "Cap and Trade is not about making America energy independent or promoting green technologies - it's about the left's unrelenting desire to change America's lifestyle and economy, limit our choices and punish economic success..." This statement, which is just absolutely ridiculous, makes the author of the blog seem pretty dumb to anyone who is slightly educated on the topic of global climate change. The problem is that too many people are not educated at all, and choose to remain ignorant. It also suggests that the conservatives change of attitude has nothing to do with the actual facts related to cap and trade and environmental policy but instead has everything to do with partisanship and doing everything they can not to give in to the Democrats. This article is tied to Krugman's article, "Building a Green Economy". Krugman points out the striking example of John McCain, who "played a leading role in cap and trade...[and now] lambastes the whole idea as 'cap and tax'". He also talks about the diminishing hope of progress in the Senate, with the Republicans suddenly changing their tune regarding cap and trade and with a good amount of Democratic senators representing energy-producing and agricultural states. Krugman is right; we have the economic analysis of limiting greenhouse gas emissions down, now we just need the political will. It's probably safe to say that the future of this planet is slightly more pressing than the pride the conservative representatives are clinging to. Blog website: http://www.the-global-warming.org/climate-change/cwa-nj-conservatives-with-attitude-»-blog-archive-»-cap-and-trade/
Toggle Commented Mar 8, 2013 on Another Political Football at Jolly Green General
I can't wrap my head around the fact that the Chinese government has let air pollution reach this level at which it is compared to "living in an airport smoking lounge". Flanagan says Chinese leaders have spoken about improving the environment of the mainland..as if it's even a question? I found myself wondering how the Chinese stand it; I don't know if I would be able to. At the same time, increasing numbers of American children are being diagnosed with asthma, an issue that wasn't so prevalent fifty years ago. Yet, our government isn't taking a strong stand to reverse this growing problem. Maybe it isn't so different after all. When I went home over Feb break I got into a few little debates with my dad, who has never driven anything but a fuel-inefficient Chevrolet truck and seems to fall into the frustrating category of people who just don't believe in global climate change. Despite the obvious decline in environmental quality that shows up almost everywhere we look, too many Americans are ignoring all the warning signals and feel no need to change their daily lifestyles. If the Chinese example of "living in an airport smoking lounge" is what happens when people ignore the warning signs until it is too late, I am worried about what's in store for America's future. I guess I better enjoy my time outside while I can.
Toggle Commented Mar 1, 2013 on Off The Charts at Jolly Green General
I found this article to be especially interesting after reading the Boston Review article "Economics must be at the heart of any discussion of how to fight climate change" for class tomorrow. In that article, Nicholas Stern states, "Action by individual countries is, however, not enough, and it will prove more costly". Stern here is talking about how there needs to be a global effort and collaboration to overcome climate change. I think that he is envisioning a much more large-scale solution and to achieve such he is probably right, that it can't be a solution comprised of various individual actions. However, RGGI has found such great success and it is likely that a lot of the success stems from the locality of the policy. I do not disagree with Stern's article, but I also do not think anyone should rule out the possibility of smaller, more localized policy changes taking place that fit each regions economy and way of life better. The Northeast is a very different place from the Midwest, and so it is very likely that the policies created by the RGGI would not find the same magnitude of success there that they found in the Northeast region. Also, I have a lot of respect for those nine countries that have participated in the RGGI for taking responsibility for issues that are not even all theirs. We learned earlier in the term about how activities in the more western regions of the United States can cause pollution on the east coast, traveling via wind or water. It is admirable that those Northeast states are taking the initiative, and sending the message that it is not about who's to blame, it's about fixing it now and doing their part to improve our environment.
Toggle Commented Feb 12, 2013 on Hurray for Market Forces!!!! at Jolly Green General
Carl Zimmer gives insight into the complexities of solving the global warming issue. While all scientists can agree on the existence of global warming and of its detrimental effects, they are still working to figure out what type of pollution exactly is causing it and determine the full spectrum of effects each type of pollution has on the environment. So scientists are trying to educate the public on a topic that they, themselves, are still learning about. But that is exactly what they need to be doing, because we can't wait for them to completely eliminate their margin of error on their results. We need to act now, by encouraging the installment of stoves that release less black carbon into peoples' homes with subsidies and by increasing the tax on diesel. One thing I was a little confused about is that Zimmer says we need to be careful and target the black carbon we eliminate, because some of it is good. While that may be true, most of it is bad, so I think it should be worth eliminating that little bit of good in order to get rid of a whole lot of bad.
Toggle Commented Feb 8, 2013 on Worse than we thought.... at Jolly Green General
I completely agree with Brett when he says that Silver's article does not provide any new information and I would not deem it as groundbreaking either. Silver does not provide us with enough information about his statistics, causing me to question their validity as evidence in his argument and to suspect that he is using them more in a manipulative manner to support his own claim. Reading his article, I felt as if those numbers were taken out of context and so they do not give me the whole story I need to fully understand the environmental issues we have facing our nation's economy and our world's economy. I, like Silver, was pleased by the significant paragraph Obama dedicated in his speech to the environmental issues associated with climate change. However, I still feel slight pangs of bitterness when I reread that same paragraph. On one hand, it's a great step forward and appreciate Obama valuing the issue enough to give so much time to it. On the other hand, I see it like Emily said earlier as too little too late. After spending so much time in both Environmental Studies and this class learning about the topic, one measly paragraph seems hardly sufficient. It's nice that Obama is publicly recognizing the issue and encouraging the nation to lead the transition towards sustainable resources, but it would've been a lot nicer if he didn't even need to address it at all. In his first inaugural address, four years ago, he declared, "We will restore science to its rightful place...We will harness the sun and the winds and the soil to fuel our cars and run our factories". He mentioned these words in between his declarations about healthcare and university funding, both of which are also important issues, yet we can't let our politicians undermine the gravity of our environmental issues just because it is not as pleasing to the public.
I took Microeconomics, my first Econ class, last semester and I was surprised by how much I loved it. Now, it’s funny, because I still love Econ, but for TOTALLY different reasons. I loved Microeconomics because it was so straightforward. It was the first class I had taken where everything was so black or white. In every market, there were two curves, and almost every market magically pushed itself to its equilibrium point. If, for the few reasons plainly listed in the book, the market did not reach equilibrium on its own, the government could help. Coase said the government should never intervene. Pigou said the government should always intervene. And when the government intervened, it created a nice little triangle on our graphs that we called the deadweight loss. Now, after just a couple weeks in this class, I have learned that none of that is true. There is no such thing as a perfectly competitive market. Neither Coase nor Pigou gave such clear-cut answers. And Pigouvian taxes do not create deadweight losses. After thinking about it now, it seems so obvious. The whole point of the tax is that the market is not at its socially optimal equilibrium point, and the tax helps bring it to that point. I wonder why I never questioned it before. It’s probably because I am just like many other Economics students and economists; we feel more comfortable sticking to the black and white ideology. I loved Econ last semester because it was like a nice little puzzle to me and everything came together very nicely. Now, however, I have realized that it is still like a puzzle, but the pieces don’t fit together quite as nicely, and there may even be a few pieces missing from the box. I think I like it even more now, though, because the challenges posed by the Economics of Natural Resources makes it a lot more fun to play with.
Toggle Commented Jan 25, 2013 on My Bad..... at Jolly Green General
I like the idea that Cort proposed in his comment that, since climate change is a global problem, the solution is to agree on across-the-board reductions. I agree with him that this would help address the free rider problem, because even if developing countries aren’t damaging the environment as much as developed countries, they still need to be held just as responsible for protecting it. I also like Marissa’s idea of finding the optimal level of carbon emissions and then allocating the emissions based on each country’s percentage of the world’s population. While this may not turn out to be completely accurate of efficient, it is a good start to finding a solution that will hold all countries responsible for the one environment they share while still not putting any single country at an economic disadvantage. Perhaps the more developed countries should make more of a financial contribution to clean up the problem they are most responsible for creating, however the under-developed countries should still be held just as responsible for not further damaging the environment. The world has only one environment and so it must absolutely be a united global effort. The fact that the federal appeal judges ruled that the Kivalina case was an issue for politicians in Congress and not the courts surprised me for two reasons. First, you would think that the government would be happy to pass on those responsibilities to the courts. By having them hold companies and countries responsible for the pollution they are creating and the damage they are causing to the environment, the government works towards relieving itself of those responsibilities. The manner in which is would respond to and address those responsibilities would be through taxes, which opens up a whole new can of worms and disagreements. Second, regardless of anyone's own personal views, one can't deny that we need a somewhat healthy environment to live a decent quality of life. We need to improve the problem and we need people who know what they're doing to address it. Why would we want to leave the pressing issue of possible human extinction in a century up to people who know nothing about the environment to decide the best path of action? You wouldn't take your broken-down Mercedes to a hair stylist and ask her how to fix it. So why would you take your broken-down environment to Congress?
Reading Friedman's article reminded me of an article I read last May in the Washington Post about the impending doom of the country's financial deficits. In the article, by Montgomery and Helderman, which can be found at http://www.washingtonpost.com/business/economy/taxmageddon-sparks-rising-anxiety/2012/05/14/gIQAUxAAQU_story.html , the real issue was condensed into a short phrase: "there's so much at stake. And there's nothing that inspires confidence that this will get done" (Montgomery and Helderman). The authors later continue that "political leaders are focused less on finding solutions than on drawing lines in the sand". This article was written before the 2012 elections, while Friendman wrote his article after. However, the issue is the still the same. Our country is approaching an aggressively downward-spiraling future, and no one seems to be doing anything about it. I appreciate how Friedman lays out the information in a straightforward, unbiased manner. It seems like our country could use more Friedmans these days. But even with more people like him, we still can't make any progress with politicians who spend their time just drawing lines in the sand. In the Washington Post article, Ajay Rajadhyaksha of Barclays Captial describes the approaching deadline as a "slow-motion train wreck". If Friedman's article weren't enough to make me slightly nervous about the future of this country, the striking similarities between these two separate articles by two unrelated authors are more than enough. One article was written eight months ago, before the presidential election. And now, eight months later, post-election, another author is pointing out the same issue. This country is crashing and something needs to be done before it's too late. How many Montgomerys and Heldermans and Friedmans will it take to actually make a change?
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Jan 13, 2013