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Shlomo Honig
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This RFF paper did a fairly good job of juxtaposing the pros and cons of different solutions to carbon dioxide emissions – namely a CO2 tax and a cap-and-trade system – in both the present and future. What stood out to me was the idea of taxing the upstream production stages more heavily. This struck me as a very logical idea that should, if I understand it correctly, be put to better use if we wish to try to avoid the incredibly high projections of a $100+/ton CO2 tax by 2100, as expressed in the paper. A potential problem with this approach, however, is that consumers would be removed from the tax and would therefore not respond as directly to the price change from the implementation of the upstream tax. As a result, if people are not mindful of what they are paying for (i.e. the slowing and mitigation of carbon dioxide emissions) then it is less likely they will factor environmental impacts into their consumer choices. Instead, they might burden the higher price without questioning the rationale for why they are paying that higher price. These higher prices resulting from the tax would still lead to incentives for more R+D and a transition to cheaper, less carbon-intensive fuels. This makes upstream carbon dioxide taxing seem promising, especially since it simplifies a lot of the complexity attributed to a downstream tax. As most policies, though, it is not a panacea but could still help to mitigate GHG emissions in the near future. I would be interested to learn more about the implementation of this kind of policy.
Toggle Commented Mar 30, 2016 on ECON 255 for next Thursday at Jolly Green General
The record-breaking global temperatures that are repeatedly broken each year, as well as the necessity to rally public support to help combat climate change, are just as relevant today as they were when Jonathan Shaw wrote his paper, “Fueling our Future,” a decade ago. I found an article online a few days ago stating that this past February was by far the hottest February on record ( This article discussed how the resolutions reached at the Paris climate change talks will likely need to be reevaluated due to their underestimation of global warming’s positive feedback loop. It really is startling to me that preventing a 2 °C increase from pre-industrial levels seems more and more unlikely because of how out of hand this problem has gotten in the last 10 years alone. The rapid increase in CO2 emissions also renders public action more imperative than ever in order to mitigate the damages that are heading our way in the future. As Shaw points out in his article, the world’s energy demand is only increasing due to developing countries with increasing populations. Since we are currently stuck in an energy infrastructure that relies too heavily on coal, efforts to alleviate the stresses imposed by the energy demands of both the developed and developing world need to be reconciled so that immediate actions, rather than proposed plans for future actions, are pursued.
Toggle Commented Mar 15, 2016 on ECON 255 for next Thursday at Jolly Green General
I found the concept of the value of a statistical life (VSL) to be quite intriguing. Though I’m not sure how exactly they calculated an average life to be worth $7.5 million, this figure was very important to this paper due to both the direct and indirect effects that coal exploration, mining, transportation, refining, and burning have on society and human health. It was interesting that even though this figure represents the value of a typical life, the paper did not consider changes in this monetary value based on education, occupation, region, race, and many other important variables in their regional analysis. If this value held true for the economically struggling regions in Appalachia, where the education, jobs, and health of communities are adversely impacted by coal mining, then we would see more policy shaped around protecting the value of these people’s lives. The value of a human life has gone up since this paper was published, and it is important for policy to be shaped around fully compensating the affected people for any harm done to them by private coal companies in order to disincentive harmful practices. Additionally, if the whole world were to be held accountable for their carbon emissions and pay a tax of $30/ton of CO2 equivalent, then the overall cost of that tax on the people of the world would be incredibly large. Assuming that our annual emissions are, in fact, ~41 gigatons of CO2 equivalent (as a high estimate for 2030 from the article) or 29 gigatons as a low estimate (from online sources), then the total burden of that tax would be roughly $1.23 trillion from the high estimate or $870 billion from the low estimate. Granted, a little under 10% of carbon dioxide emissions come from human respiration (,, but most of the rest comes from electricity, transportation, and industry ( Beyond the shear size of this figure and that forming a global coalition to force companies to be held accountable for their actions is unlikely to transpire, I think it forces us to ask the question of why we are tolerating such a substantial externality and not fixing it by accounting for the true costs to society. This article does a good job of addressing the aspect of this argument related to coal emissions, although the argument itself is incomplete, and the spread of this information and its implementation in policy should be much greater than it is today.
Toggle Commented Mar 9, 2016 on ECON 255 for Thursday at Jolly Green General
I find it interesting how the paper discusses how crucial it is to eliminate the substantial knowledge gap that exists today and to better our understanding of complex functional relationships in ecosystems. Where traditional knowledge is readily available, we need to be able to translate this knowledge into policy, especially when more recently developed scientific data is lacking. While this should be a given, expanding on our knowledge today is still critically important. A key question here is how we should shape our policies. Should we formulate conservation policy based on traditional knowledge and designate resources to establishing the complementary governing body meant to monitor and enforce said policy? Or should we postpone any action that we take until we’ve reached an information breakthrough that changes the way we see the problem? Similar to the case of Coase and Pigou, as well as most of the policy-related discussions we have in class, it depends. It depends on the country and its economic situation, on how urgently the conservation measures are needed, and on how soundly we currently understanding the situation and its solutions. In both scenarios there are significant opportunity costs and tradeoffs – the first scenario gives up better knowledge for immediate change, while the second scenario rolls the dice and waits for something better to come along, all the while postponing meaningful policy. Granted, a country that is not strapped for cash could probably more flexibly transition from a policy based on traditional knowledge to one based on newly acquired knowledge over time. The moral of the story is that there will always be technological innovations and better solutions through ongoing research and development. We are therefore forced to decide whether it is more logical to let environmental damages accrue as we “bank on” more efficient solutions to arise, or whether we should just employ the strategies we have today in spite of our knowledge that they will soon be obsolete.
Toggle Commented Mar 2, 2016 on ECON 255 for Thursday at Jolly Green General
I found the Gordon model to be fairly important to the discussion connecting fishing habits, ecology/population dynamics, and economic sense. I also thought some of the open-access regulations were intriguing. In particular, I was curious as to how governing bodies (local, state, or national) are able to enforce some of the measures like the number/volume of fish or the technology used to find those fish. It seems like restricting advanced technology in order to conserve fish species is inherently counterintuitive for commercial fishers since capturing more fish is why that technology was developed – and ultimately purchased – in the first place. Most fishers are likely able to realize the importance of the restrictions that are put in place, although these efforts create a commons that some fishers are inevitably able to exploit, harming both the fishers and the fisheries in the end.
Toggle Commented Feb 10, 2016 on More Chapters from Kahn at Jolly Green General
I found this study to be incredibly relevant to contemporary problems of monetizing goods or resources without a price or market. It is also very interesting how, with such a large portion of Barbados’s GDP coming from tourism, a study like this had not been conducted sooner. Charging divers higher fees based on the non-consumptive values derived from their scuba diving, while also informing locals of the benefits of using their attractive coastlines to benefit through tourism, is a crucial step in the conservation of natural habitats and their services. However, it irks me how valuation case studies of important environmental non-market goods (e.g. coral reefs, coastlines) are not translated into action by governments. It seems that sometimes even sound data isn’t enough to trump political agendas or other biases. I particularly enjoyed reading about the use of a choice experiment in this study to compare people’s valuation of the different attributes of diving, as well as how these values are prioritized. Yet despite its attention to pinpointing which attributes divers value most in order to calculate willingness to pay, this study also raises the issue of distribution in markets once the willingness to pay for these attributes is realized by the diver’s fee. While we think of the extra economic surplus derived from a diver’s fee as a benefit to the local people and the environment, a government that does not adapt to this long-term thinking will quickly exhaust this surplus on more highly prioritized projects, overlooking the most reasonable approach to invest in the principal today to benefit from the interest in the future. As more and more marine environments become degraded from reckless and irresponsible practices worldwide, the value of still-flourishing coastlines will progressively increase, making the non-consumptive value and non-use values of this scarce resource exceed the value of its consumptive uses. And if the government were to “fairly” distribute economic surplus to the coastline citizens, there are only a handful of scenarios under which people would reinvest their money into protecting their coastlines, especially if they could make a pretty penny today by intruding upon the commons and killing turtles to sell rather than preserve them.
Toggle Commented Feb 3, 2016 on ECON 255 for next Thursday at Jolly Green General
The pattern of exponential growth the human population has experienced since the Industrial Revolution is unlike any externality, I think, that the world has ever seen or will ever encounter. Hardin makes it very clear that people should not be expected to comply with policies that do not benefit them personally (especially in the short run). While I firmly agree that the choice to reproduce is a biological right that no governing body should be able to monopolize or even regulate, the trajectory of our current population growth will cause our carrying capacity to be well-surpassed, resulting in a lowered standard of living that would dissatisfy most people (assuming the equal distribution of resources). Even with ongoing advances in technology, the fact remains that last year there were 80 million more mouths to feed than the year before. Nearly all population projection models for the next 50-100 years provide a low, medium, and high scenario. I find it intriguing how some people – including most of the people who firmly support not regulating the right to reproduce - are optimistic that we will be able to stay under even the medium population projection. Even more astonishing is how many models show our growth rate approaching 0.10% by 2100. Of course, these models are just models, and they do not explicitly state the policies and intervention necessary on a worldwide scale to bring about this drastic change. The reason for this is that we don’t know exactly what to do yet. But like Hardin says, “we can never do nothing.” Is an economic solution feasible? Potentially, although this requires making it more costly to potential parents to have a child than it is worth to them, which would first necessitate some comprehensive analysis of how much having a child is actually worth – a value that is difficult to place considering it is a human life we are talking about here, and this value is sure to vary with family, culture, country, and many other variables. Could such a policy really achieve the desirable “mutual coercion” that Hardin mentions? In his example, Hardin states how people grudgingly pay taxes “to escape the horror of the commons.” While that is reasonable, taxes also support government programs, infrastructure, education, defense, and science – things that people tangibly benefit from. I find it far less likely for someone to relinquish their right to breed since they won’t actually feel that they are benefitting from this decision. Additionally, there is no way to enforce such a policy. And what of a fine for noncompliance? Are we really going to fine people a certain amount of money for having a child, and can we really expect this to be fair considering it will favor the wealthy? The sooner that people globally realize that when everyone takes from the commons it hurts society collectively, the better the chance we have to decrease the population growth rate of our species in a humane manner. This requires both education and rationality. An interesting yet very relevant idea from Krutilla’s piece is that a large problem stems from people thinking they are being rational decision makers by “thinking at the margin.” But when this type of thinking does not take into account maximizing future utility, we overexploit resources in the context of their future use, all the while thinking the market is efficient. At the same time, the question arises as to whether we should really cut back on resource use today if people don’t concurrently change their breeding and consumption habits. Wouldn’t this just facilitate the availability of more resources for unsustainable population growth in the near future? This is just a thought, but I think it is worth discussing.
Toggle Commented Jan 22, 2016 on ECON 255 for Friday at Jolly Green General
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Jan 21, 2016