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As the paper presented an in depth discussion of tax policy, and the existence of carbon taxes in some countries, I was curious to look further into the policy that countries enacted in the early 1990s and see if/when additional countries adopted carbon tax policy. Not surprisingly, Scandinavia appears to be so far ahead of other developed (and developing) countries. Finland, Sweden/Norway, and Denmark implemented carbon tax policies in 1990, 1991 and 1992 respectively. The cultural or psychological aspect of tax systems interests me. As the paper discusses the wide implications a carbon tax could have on a country, depending on how revenues are allocated, I question if governments can effectively communicate the mechanisms of a tax policy for carbon, and portray where the revenues are allocated with transparency, then would citizens be more willing to back a carbon tax? I’m guessing the answer is yes. Considering the first four countries to write carbon tax into law all hail from the same region, I’m wondering to what extent culturally dominant views of energy and climate policy enabled Scandinavia to emerge at the forefront of carbon tax policy. The paper calls attention to whether taxes really do (or have) given firms to innovate. I was slightly surprised that the effects of carbon pricing have maybe only made a moderate impact on innovation, due to existing incentives for firms to devote resources to R&D efforts. When considering innovation across different companies and different regions, Denmark’s emphasis on clean energy and electric vehicle usage came to mind. While spending two spring term’s in Copenhagen, I saw many citizens and professionals riding bikes or using public transportation during their daily commutes and routines. When people drove cars, they were smaller, often electric vehicles. My host family explained to me that car ownership was minimized in the city because of the extraordinarily high tax rate on car purchase and vehicle registration. As I looked into Denmark’s car-related tax policies after reading this paper, I came across a Bloomberg article detailing the newly elected Danish government’s plan to lift the tax break on EVs and begin taxing the vehicles at 180%. The article points to the new tax’s intention to help businesses. As quoted in the article, Denmark’s current finance minister suggests that while the former government promised to keep EVs tax exempt, this is not economically feasible. I was fascinated (and discouraged) to discover this policy. Even in a country that has been on the cutting edge of sustainable practices over the last 2+ decades, government policies and political agendas can still impact progress moving forward.
Toggle Commented Mar 30, 2016 on ECON 255 for next Thursday at Jolly Green General
The notion that technology and strategy to the climate-energy challenge exist and are already practiced at various levels strongly resonated across all three pieces. What is most surprising or frustrating is considering the timing of the articles that were published between 9 and 13 years ago. In different ways, the papers point to the pressing need for immediate energy reform and stresses the negative consequences of delaying action any further. Yet, we’re reading these materials a decade later and a policy solution does not appear on the horizon. Schrag’s piece concisely portrays the “climate-energy challenge”, outlaying the scientific research as well as political components that have influenced discussion and views of climate change. Numerous partial solutions to the climate energy problem already exist but the solutions have not been transferred on a large scale because of political boundaries. As we look at the climate-energy challenge nearly a decade after Schrag wrote this piece, the most pressing issue seems to be how we can “de-politicize” climate change and implement far reaching policies. All three of the articles reiterate with a sense of urgency the importance of implementing solutions as soon as possible because the longer we wait, the more difficult and costly they will be. From my understanding, some of the myth around climate-energy solutions is that they are unknown, impractical, or not feasible. Pacala and Socolow’s article, outlining 15 options to achieve “stabilization wedges” of carbon emissions demonstrated the range of solution potentials, from user/demand based options to technology based options. The fact that these options are not just theoretical but are currently implemented at an industrial scale completely dispels the myth of climate-energy solutions being intangible. Because on a national scale, the energy discussion is so politically charged, I’m curious as to what cities and regions have been making strides towards implementing energy solutions. When I lived in Atlanta this summer, I was surprised and impressed with the amount of infrastructure supporting electric vehicles in the city. Several colleges expressed their decisions to purchase or lease EVs for tax credit purposes, but their decision to purchase the car only appeared feasible because of the amount of infrastructure in place. I am curious as to how this movement towards promoting EVs began and how it can be replicated or transferred across other growing cities in the U.S.
Toggle Commented Mar 16, 2016 on ECON 255 for next Thursday at Jolly Green General
In determining the total cost of coal mining, the paper’s discussion of negative externalities, particularly public health related costs stood out. The paper names black lung disease and lung cancer to be two illnesses that U.S. miners are affected by. While the authors claim the coal industry bears some internal costs in the form of wages and workers’ compensation, the long-term costs of these illnesses are often supported by state and federal funds. If a workers diagnosis of black lung disease, lung cancer, or any other illness with potential long-term affects are determined to be caused by mining work, it seems that these costs of care for treating these illnesses should also be born by the coal industry. Because the paper cites that there are 19 chemicals used and generated in the mining process that are cancer-causing agents, and 24 chemicals that are “linked” to lung and heart damage, with other chemicals potentially leading to other health effects, I find it astounding that the industry is not held fully accountable for these negative health consequences resulting from production. As the percentage of coal powered electricity used in the U.S. is anticipated to keep rising through 2030, it seems crucial that the industry be held to a stricter accountability standard for the harmful consequences both for the environment and for public health.
Toggle Commented Mar 9, 2016 on ECON 255 for Thursday at Jolly Green General
The paper presented the issue of Biodiversity preservation while highlighting the discrepancy between all available information on biodiversity and lack of meaningful, large scale, effective policy and action to preserve biodiversity. While the author says, “existing knowledge, often including extensive traditional knowledge, is generally underused in decision-making at local, national and international levels” this point made me question what is driving the disconnect between knowledge and policy action and suggests that knowledge alone is not sufficient to generate changing habits or priorities. The author also cites that “international financial investment in biodiversity conservation has been slowly increasing and is estimated to have grown around 38% in real terms between 1992 (when CBD came into force) and 2006” suggesting perhaps that political recognition has inspired change, although not at a large enough scale. As the authors point out, the private sector has the opportunity to prioritize preservation of biodiversity and facilitate the scale up. While the authors claim that “corporate environmental performance is increasingly important to investors and therefore corporate leaders” it seems that if companies are still not prioritizing biodiversity preservation, then perhaps the beginning to a solution would be educating more investors on the importance and significant of biodiversity in hopes of biodiversity gaining more clout with corporate leaders. As the presence of technology increasingly provides access to information and the media, it would be interesting to see campaigns for biodiversity education be present on a large scale, in efforts to influence the importance of biodiversity to general populations and investors, and consequently make biodiversity a heightened priority for corporations.
Toggle Commented Mar 2, 2016 on ECON 255 for Thursday at Jolly Green General
“Conservation efforts are frequently seen as costly because they may preclude certain activities that have large immediate financial rewards, whilst the longer term costs associated with species loss and habitat destruction are overlooked in the pursuit of short-term economic gains.” “Investing in natural capital yields considerable net gains, while underinvestment in conservation efforts exposes ecologically valuable resources to degradation (Wells, 1997), leaving society worse off and often exacerbating rural poverty (TEEB, 2009).” The paper clearly taps into measuring the real economic value of reefs using non-market valuation. As the results signify that divers are generally willing to pay more for “lower levels of site crowding and higher levels of coral quality, fish species diversity and sighting of sea turtles,” which all contribute to the local site and species conservation, I found it most interesting to consider how crucial this information is for each local tourism industry from the perspective of both the tourism company and local government. As the article expresses, a large amount of the local economies’ GDP comes from the tourism industry; thus, conservation must be an integral factor in the sustainability of the economies’ futures. There seems to exist an obvious solution to halt the environmental degradation caused by the tourism industry by capitalizing on consumers (divers) willingness to pay for conservation. As the paper also specifies, most tourism economies exist in very poor rural areas that are reliant upon the industry. In this way, there should exist an incentive for company’s in the tourism industry to support policy that aims to conserve the ecosystems in which they operate in order to invest in the sustainability of their future business. If the willingness to pay for conservation within these unique ecosystems can be further quantified, winners could include the future health of the ecosystems and consequently the future profitability of the industry and the strength of local (often poor) economies in the future.
Toggle Commented Feb 3, 2016 on ECON 255 for next Thursday at Jolly Green General
I found Hardin’s discussion of maximum population and population growth to be dense. Can a population be experiencing positive growth but not be approaching its optimum? This notion led me to consider the issue of scarcity of or lack of available resources to sustain a growing human population. When considering the optimum population level are we also examining the quality of life experienced by the population- a standard difficult to universally quantify. For instance, today, could a population that is experiencing rapid growth and low standards of living be below its optimal level, but begin approaching its optimal level if it absorbs excess resources from other populations and thus obtains the additional resources necessary to support the population. I consider this question in the context of the issue of population growth in many developing countries, especially considering that high fertility rates tend to be a characteristic of developing nations. In accordance with this characteristic, the 2015 Human Development Report predicts that the world’s population will reach 9.6 billion by 2050 with most of the growth coming from developing countries (6.0 bn to 8.2 bn). According to the reports predictions, these numbers imply that 85% of the world population will live in developing countries in 2050. This is a staggering statistic when considering the world population and quality of life and leads to the question of how this growing population will be supported, especially in regions and countries within which resources are already scarce or unavailable.
Toggle Commented Jan 20, 2016 on ECON 255 for Friday at Jolly Green General
This article’s discussion of lending to emerging markets and the relationship between treasury yields and quantity of bonds brought to the market demonstrated some of the factors that influence developing country’s access to capital, and how our own treasury market in the U.S. impacts international markets in developing countries. While we have talked about how individual’s gaining access to credit in developing countries can bring improved outcomes to businesses and households alike, it was interesting to look at lending on a national scale. While access to credit at an individual level can be achieved through small business and lending organizations, the mechanisms driving lending to emerging markets face entirely different factors. Since the Fed has promised to increase rates (again), the paper demonstrates how this policy shift can impact emerging markets, and impact markets in different regions differently. This article published today covers recent comments from Fed officials about the rate hike and touches on the impact of this raise on foreign and emerging markets.
Toggle Commented Nov 18, 2015 on ECON 280 for Thursday at Jolly Green General
There were many interesting components in this paper. One of which was the notion that access to credit changes how a household spends rather than how much they spend. The statistic presented, that ~13-15% of U.S. business borrowers default on loans, compared to ~2-5% of microcredit borrowers in developing countries who default on loans surprised me. The idea that business owners who had a grace period invested 6% more of their loans in their businesses than borrowers who did not receive a grace period also surprised me. I would have expected investment from those borrowers receiving a grace period to be less than borrowers who did not receive a grace period, thinking that if payment was delayed, a borrow may be more inclined to consume and feel less imminent responsibility for the loan; however, this result showed that borrowers, and particularly the borrowers surveyed, were very savy and responsible with their loans, and optimized their credit to the benefit of their business. Additionally, the discussion of text reminders demonstrated some of the neuroeconomics of saving. The notion that receiving a text message increased savings by 16% when the reminder was about a purchase goal was really interesting, as this concept can be implemented across different savings and consumption products in both the developing and developed world. For example, I get a text a few days before my automatic car insurance payment is deducted from my account. I’m sure the company uses this to remind customers that the payment will occur and to ensure there will be funds in the account when the deduction is drawn. The use of text reminders is a simple and modern way of holding savers (and consumers) accountable. Another means for holding savers accountable that the article discussed was through account labeling. I found this concept really interesting as well. If people label their spending, they may be more likely to protect funds allocated for different purposes. These two examples prompted me to think it would be really interesting to understand more about the neuroeconomics behind saving and spending and what gives us incentive to
Toggle Commented Nov 16, 2015 on ECON 280 for Tuesday at Jolly Green General
This paper provided a wealth of information on what the world will look like if temperatures rise 4°C. The implications discussed, such as loss of ice sheets and rising sea-levels, extreme heat waves and stunted coral reef growth easily depict the severity of the future effects climate change and global warming. The paper also painted the potential consequences of extreme natural events clearly in order to depict the severity of climate change. An example that stood out to me was the chain of effects resulting from major floods. First, that major floods interfere with food production that could potentially “induce nutritional deficits and the increased incidence of epidemic diseases”, as well as contaminate water supplies and “increase incidence of diarrheal and respiratory illnesses.” Clearly, major flooding can have enormous negative consequences on health, especially for people living in poor regions, and the examples demonstrate the severity of the potential consequences of climate change on the entire world, and especially the world’s poor. Because the paper highlights the severity of this issue, I expected more discussion about current policy and funding allocation efforts to promote sustainability and halt (or reverse, if possible) this damage caused to the environment. While in class we discussed the issues of having incentive to conserve without a market for conservation, I would have been very interested in learning about policy proposals and potential solutions and quantifiable means to conserve besides “turning down the heat.”
Toggle Commented Nov 11, 2015 on ECON 280 for next Thursday at Jolly Green General
This paper was an interesting follow-up to “feeling is for doing” paper that we read last week. As I wrote last week, the notion that emotions impact how we prioritize and consequently how we make decisions stood out to me. I considered the results from the Pathos and Ethos paper in the context of the theory that emotions influence decision making by indicating how we prioritize our goals. In this context, the results that certain strong emotions (shame, anger, anxiety, distress) were more successful in reducing the decision maker’s probability of buying a tobacco product than others, leads me to wonder what the neuroscience is behind these findings. If certain strong emotions elicit stronger responses to decision making (in the context of probability of buying tobacco products) I’d be interested to know how the differences in emotions could be explained neurologically. In terms of the paper and its relevance in policy, I found it really cool that the findings of this study could and can be used to improve the health of populations by eliciting these specific strong emotional responses in anti-tobacco advertising.
Toggle Commented Nov 10, 2015 on ECON 398 for next Tuesday at Jolly Green General
I found this paper really interesting. While the concept that emotions impact our decision making intuitively makes sense to me, I had not considered the mechanisms that drive this relationship. While the paper describes emotions as "acute, relatively momentary experiences," I find it fascinating that emotions cause us to prioritize certain goals and therefore motivate and mobilize us with the energy to direct our behavior. I would have thought that emotions guide our decision making, but perhaps lead us to be less rational and therefore make less rational decisions; however, the premise of this article seems to be exactly the opposite. If emotions originate in our brain, then their linkage to decision making as a mechanism to prioritize our goals is extremely fascinating. Further, if emotions act as a motivational process during decision making, it may be interesting to see how we can control our emotions, or ignite emotions when orienting ourselves to our goals.
Toggle Commented Nov 2, 2015 on Econ 398 at Jolly Green General
Sach’s and Malaney’s article discussing the economic and social burden of malaria brought several factors about malaria that I was unaware of. The number of clinical cases the paper sites every year (300-500 million) was astounding; however, given the strength of the disease and its predominant presence in underdeveloped countries that lack the same level of resources as others, the deaths (1-3 million) in proportion to diagnoses struck me to be low. That said, 1-3 million deaths, mostly of children, is astronomical and incredibly sad. Additionally, I found the notion that adults generally develop partial immunity to the disease to be interesting, and highlighted the importance of children in tropic and sub-tropic regions that are at high risk of contracting malaria to have access to adequate methods of malaria prevention and treatment. The main problem I found in the article was the connection between poverty and malaria, and how the disease may prohibit developing countries from experiencing economic growth in may ways, including by making these regions potentially less attractive for investment, given the high risk of the labor force due to risk of contracting malaria. The nobel prize lecture had many interested components that tied back to previous readings in this class. First, the author’s point that most economists fail to understand that “poor people are no less concerned about improving their lot and that of their children than rich people are.” This related to the discussion of how the poor spend their money in “The Economic Lives of the Poor.” As we looked at how the poor spend their money: on food, usually not maximizing their calories, on alcohol and tobacco, entertainment, and festivals, we see spending patterns may be very similar to those of wealthier households. As the lecture described that there are similarities between the spending behaviors of the rich and poor, we can look at general human behavior as the mechanisms driving spending rather than individual’s income levels.
Toggle Commented Nov 2, 2015 on econ 280 for Thursday at Jolly Green General
This chapter brought up many interesting aspects of agriculture that complicate the poverty levels in rural areas of developing countries. The discussion of the cultural practices particularly highlighted how deeply rooted the mechanisms of rural poverty may be in many areas. For example, the discussion the size of farms relative to their production and land efficiency in the context of Latin American latifundios demonstrated how a culture’s social structure can influence allocation of resources (like land) and production in agriculture and contribute to the system’s inefficiency. Additionally, because the latifundios are a sign of power and prestige, it may be difficult for government’s to influence, especially in places where local governments are corrupt. The section on the role of women in rural areas was also interesting and tied directly into Deflow’s piece about the women’s empowerment and economic development. This section of the chapter reinforced the theory that women’s empowerment influences economic development in that women’s roles in agricultural production positively influence rural communities. It was interesting to see the parallel thoughts as Todaro and Smith called for the necessity in gender-specific policies to drive rural development, and Deflow called for a continued necessity in policy that empowers women in order to achieve economic development.
Toggle Commented Oct 26, 2015 on ECON 280 this week at Jolly Green General
The discussion of empathy also particularly stood out to me. The notion that training ourselves to understand our own feelings relates to our capacity for empathy made me consider the different ways in which we can control or alter our understanding of others. Continuing with Kasey’s comment of being “self-aware”, I wonder the extent of the relationship between our own self-awareness and environment. If we need to focus on being more self-aware in order to increase our empathic capacity, how can our choices of environment including social situations, education, etc. impact our awareness of our own emotions. Further, the discussion of the “Individual Differences in Empathy” made me wonder how the mechanisms in the brain formulate as we gain self-awareness, and if there is an age at which this development is critical, or if it can continuously to be learned and developed over time.
Toggle Commented Oct 26, 2015 on econ 398 next two weeks at Jolly Green General
Two discussions in this chapter particularly fascinated me. The first was the section regarding how “emotional priming” affects decision-making. The study’s results struck me as surprising- that seeing only an image of a happy, angry, or neutral face would then result in such varying choice of beverage consumption and willingness to pay for the beverage. What further surprised me, and I would expect has serious implications for marketing techniques, is that the emotional primers went undetected by the participants. In thinking about how products are marketed (and for the goal of profit maximization) it puzzles me that such a small, undetected change in emotion, caused by an outside factor could have such an affect on the consumer’s product consumption. In the context of marketing, and specifically ethical marketing, I wonder what the participants would have said about their experience purchasing and drinking the beverage a few days later. Would the participants who were exposed to the happy face and proceeded to drink more beverages and have a higher willingness to pay think about this experience positively? If so, then maybe marketing techniques maximizing consumers reaction to something “happy” is ethical. If these participants looked back on the experience with regret, then perhaps this marketing strategy is less ethical. Additionally, the section discussing attempts to change emotional reactions by actively manipulating thoughts further interested me and reminded me of the article I’ve linked below from the New York Times. This article fascinated me, as it discusses the use of MDMA in therapy sessions to allow patients to recount traumatic memories in order to rebuild memories and cope with anxiety and depression stemming from these traumatic events.
Toggle Commented Oct 20, 2015 on ECON 398 at Jolly Green General
Gitter/Barham’s discussion of the role women play in allocating transfer payments to the household, was interesting and logical, especially with regard to traditional gender roles. As traditionally, men are the breadwinners in a household, and women are the caretakers of the household, it seems logical that women would allocate additional resources (like transfer payments) to increasing their household utility through their children’s health and education. The author’s discussion of how women’s education enables empowerment was further interesting and reinforced the benefits of a household valuing education. The Sen chapter fit in nicely with how women's relative power to men in the household may affect decision-making and allocation of household resources. While the Gitter/Barham article discussed the results of women having education and attaining more power and the affect this has on spending and allocation of transfer payment resources to children's health and education, the Sen chapter helped clarify what may be the mechanisms behind women achieving education and a higher degree of power relative to the household and to society. Sen's discussion of the political, economic and social role of women in a developing helped to fill some of the gaps in the Gitter/Barham article about what may drive women’s attainment of education and power and consequently affect their households.
Toggle Commented Oct 19, 2015 on Econ 280 for Tuesday at Jolly Green General
Rodrik's discussion of growth strategies, and in particular his stance on sustaining economic growth was very interesting. His point that "even the simplest of policy recommendations is contingent on a large number of judgment calls about the economic and politic context in which it is to be implemented" highlighted the intricate issues and even setbacks developing countries face. While the article does demonstrate that policy may be capable of sustaining development, this particular point emphasizes both the challenges of ensuring policy makers are aligned with sustaining development goals, and that they are building and enabling institutions to grow in capability of enabling sustained economic growth to lead to development. As the paper defines "growth acceleration" as "economy per-capita GDP growth of 2.5% or more sustained over 10 years" it seems only natural that deeply rooted institutions will be an absolute necessity in sustaining growth over this time frame.
The article’s discussion of the economic choices, constraints, and challenges of the poor provided a broad overview of the factors affecting the percentage of the global population that consumes less that $1 a day. Consumption spending at this level seems unimaginable- how many items in Lexington Kroger, or Co Op can we find for less than $1? A major challenge in reading this article was imagining this perspective; however, the author’s breakdown of the categories of consumption expenditure made the discussion more tangible. Like the authors, I was surprised by the percentage food consumption represents to total consumption (~56-78%). The additional discussion about the discrepancy between goods the poor actually buy with this money, and the goods that would maximize their caloric intake was additionally concerning and highlighted to my attention the significance of nutritional education, especially for those on extremely small food budgets. As the authors continued to discuss the issues with public education systems in many developing countries, this highlighted not only the connection between health and education but also the circularity of many issues of poverty: how are the poor supposed to enhance the purchasing power of their dollar(s) to maximize nutrition without sufficient education?
“In some ways the problems of economics and of social sciences in general are a part of a broader methodological problem that afflicts many fields: how to deal with complex systems.” This excerpt identifies both the goal of and problem with economics: the practice seeks to “explain” the complex. When considering the issues of explaining something complex through a simplified and concise model, my mind jumped to Dr. Doty’s TED talk and the relationship, or “externality” that altered the course of his life. The life-altering situation Dr. Doty encountered was not a monetary donation or educational opportunity- Doty’s gift was the receipt of compassion. While maybe you could argue that Doty went to the magic shop seeking human interaction, the relationship he formed as a result of that seemingly coincidental decision could not have been predicted. That is, the externality that altered his life and changed his productivity as a human being was unpredictable and rooted in human emotion. In considering the Krugman piece, I find it crucial to take into account the author’s point that humans (and perhaps economists) are “builders and purveyors of unrealistic simplifications.” In this aim to understand, we simplify and this process is representative of human nature. In economics, we form concise models to explain complex systems. Socially, we utilize stereotypes to explain what we do not understand. When considering economic issues of development, I see it natural to be attentive to issues at the level of an individual human being. As Dr. Doty’s story portrays, human emotion and the exhibition of compassion, an unpredictable phenomenon, can begin to alleviate poverty, thus exemplifying the ways in which we cannot explain an entire system through a singular model.
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Sep 16, 2015