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Murray Manley
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I thought this article was particularly interesting in that, unlike many other articles we have read, the author suggests that both cap-and-trade and carbon taxes in their purest forms have advantages and disadvantages; however, policy makers are not bound to implementing either of these systems in their purest forms, but rather can "modify either instrument's design, at least to some extent, to exploit apparent advantages of the other instrument" (3). In this way, the policy makers can please more constituents, as well as by reducing taxes in other areas such as income taxes, to compensate for the loss in revenue or distributional inequalities. Unfortunately, anytime an added tax is brought up in terms of policy, conservatives and liberals disagree as to what the best solution to the problem would be. Perhaps some sort of compromise in terms of the types of policy or combination of policy could alleviate that. Additionally, the article talks about possibly implementing a banking of carbon allowances if the government chose to implement a modified cap and trade policy. This might appeal more to conservative policy makers since it allows an almost entirely market based approach similar tot eh European ETS. Both suggested policy paths raise the question, how are we going to get conservatives and liberals to agree? How are we going to make people recognize the urgency of the situation and agree to a tax that seemingly offers no tangible monetary benefits on the front end. The first step would be convincing the republican party to use the term “climate change,” or choose a moderate candidate for presidency that can raise awareness and get both sides on board. All eyes are on the US and China to make the first move, and before we can make the first move, we have to have a plan that most people agree to, such as banking allowances or a modified tax with income tax cuts for low-income households.
Toggle Commented Mar 30, 2016 on ECON 255 for next Thursday at Jolly Green General
In Confronting the Energy Climate Challenge, I thought it was particularly interesting when Shrag discussed the Eocene. The last time the earth had comparable temperatures and carbon stored in the atmosphere (although scientists don't know the precise amount), was during the Eocene which occurred in the range 55-35 million years ago. However, when this occurred, the earth had millions of years to slowly adjust and adapt. Because climate change today is happening so quickly today, we are looking at an enormous potential loss in biodiversity, as well as many other complications such as the rising sea levels. When Shrag discussed the increasing levels of carbon, combined with our class discussion about limestone and absorption of water under Miami Beach, I started to wonder if there is a way of removing carbon from the atmosphere and reinserting it into the earth. Is there some sort of chemical or synthetic rock, coal, diamond, etc. that can store vast amounts of carbon safely in the earth's crust? This vaguely fits the description of a carbon scrubber, but unfortunately, even if such a substance was developed, we still would have to focus on lowering emissions and saving the corals and other biodiversity sensitive to temperature change. Unfortunately, this class and my Apocalypse Narrative English class have made me very cynical about the future, and especially about the future of the environment. This class, and particularly this week's reading, reminded me of the end of the book Sapiens: A Brief History of Humankind, in which the author says it is only a matter of time before we drive ourselves, the planet, or both to destruction. Unless the US and China take the initiative today and implement climate change policy and carbon emission reductions, the world will be a very different place when our children and grandchildren grow up. Making people realize their bequest value, and realize that climate change is destructive even for those who aren't threatened by rising sea levels is seemingly impossible. Perhaps the best way to influence people is, after all, getting Leonardo diCaprio to state the looming adaptation costs if nothing is done in the near future to stop CO2 emisssions.
Toggle Commented Mar 16, 2016 on ECON 255 for next Thursday at Jolly Green General
After reading this article, I did a little bit of research and found that coal provides about 7 million jobs worldwide; in the United States, coal-related jobs provide about 174,000 jobs (Wikipedia). Although environmental issues should not be related to government policy and politics, unfortunately energy conservation, “going green,” and using cleaner fuels often do fall under the platforms of politicians. Many of these topics are controversial, and with good reason. The article outlines the true cost of coal, burning coal, mining coal, etc; and what they come up with is astonishing. The authors state, “Our comprehensive review finds that the best estimate for the total economically quantifiable costs, based on a conservative weighting of many of the study findings, amount to some $345.3 billion, adding close to 17.8 cents per kWh of electricity generated from coal. What the article doesn’t focus on is the opportunity cost of switching in the short run; unfortunately, people don’t consider the long-term future and what is beneficial for their health, for the water supply, and for the ozone when their job and livelihood is at stake. What is the total cost of switching to an entirely new industry? What will happen to all of the coal mining towns and the people who are left jobless? The cynic in me is disinclined to believe that any beneficial governmental policies will arise limiting coal use in the future. Why? Because that would not be a popular choice among many Americans; that would not bode well for re-elections in the following year. Until that point when the government either chooses to tax coal enough to make up for the externality, or when they significantly subsidize research for alternative fuels and eliminate subsidies for coal, nothing is going to change any time soon. Because the price of coal is still relatively cheap (thanks to government subsidization) and hasn’t changed, people have no reason to innovate or switch entirely to another fuel source. And even if they did, the issue of coal-related negative externalities (lung cancer, climate change, acid rain, etc) are global issues, not something a private corporation or US government branch could solve all on its own.
Toggle Commented Mar 10, 2016 on ECON 255 for Thursday at Jolly Green General
Despite the recent increase in membership of the World Wide Fund for Nature, the Royal Society for the Protection of Birds, and Nature Conservancy, biodiversity has continued to experience a decline. More people are on board with conservation, yet the situation fails to change. Why is that? First and foremost, 5 million supporters, while that may seem like a significant amount, is relatively small, especially considering the 7 billion people we live with in the world today. And even those who specify an interest in conservation are not always willing to pay; conservationist economists around the world are constantly battling with the problem of the free-rider and the difficulty of coming up with international solutions that people will abide by. In 1992, The United Nations Convenient of Biological Diversity passed a resolution with 193 participating nations to promote biodiversity and safer development in the upcoming years. However, the world has seen little change in widespread eco-friendly building techniques, fishing techniques, etc. The question remains, how can economists and policy makers work together to make biodiversity into a market that people are willing to actually pay for? How can we make people understand in their day to day lives the issue of non-market valuation? And how would those who are already barely scraping by and significantly under the poverty line be able to afford food if the price of a single head of lettuce increased by 7 dollars to account for the damage done on biodiversity? Who would handle these funds and make sure they are appropriated accordingly? I’m not sure about how effective the UN’s promise to improve biodiversity has been or will be int he future; and I’m not sure that we will ever come up with a solution to solve the issue of decreasing biodiversity outside of the national level. We will still always be faced with the issue of negative externalities, and if it isn’t individuals acting in their own best interest and ignoring the societal cost associated with their actions, then it will be countries acting in their own best interest; perhaps we should just cut our losses and focus on it at an international level. The United States is a world leader; if we were to instigate a shift towards protecting biodiversity, could we perhaps appear as a model of good behavior and of a market that accounts for negative externalities and forces people to pay the full (true) cost for production? If we focus our research funds on placing a standardized cost system on food items, appliances, and goods that negatively impact the environment to pay for those costs, could we make a difference? Because it is extremely difficult to get 193 countries to agree, and even more difficult to get them to take action, perhaps our best bet is to form a small alliance of the UK, the US and become a role model for all other countries in that regard.
Toggle Commented Mar 2, 2016 on ECON 255 for Thursday at Jolly Green General
In Chapter 15. Kahn discusses how some areas are working to develop wetlands to cleanse sewage water and runoff, specifically in California. I would be interested to find out how much sewage can these wetlands handle, and are they sustainable ecosystems even though they are man made. How expensive are these to construct, and what is the likelihood of this innovative alternative becoming a more widespread solution to sewage overflow?
Toggle Commented Feb 11, 2016 on More Chapters from Kahn at Jolly Green General
Often, economists serve as the missing link between scientists and policy-makers, putting the scientific research into practical information that is easily interpreted by lawmakers. In this case in particular, economists seek to place a value on the biodiversity, water clarity, reef quality, etc. in Barbados. Notably, the study was funded by the Barbados Ministry of Tourism, which is indicative of their interest in potentially taking measures to preserve the reef. Earlier research shows that “the level of degradation being experienced by Caribbean coral reefs from anthropogenic activities has been projected to result in losses up to US $300 million per year in net revenues from dive tourism and put to US $140 million per year in reef-associated fisheries by 2015”. One would hope that these kinds of figures would encourage Barbados to take measures today to prevent further losses tomorrow, especially considering how much Barbados relies on tourism and diving in their economy. Unfortunately, non-market valuation makes this a tricky issue. I would be interested to see if these figures projected in 2012 overstated or understated losses in tourism. Realistically, non-market valuation is a hard thing to make a large group of people understand. Of course when asked, manny people would express interest in saving the reefs or passing a law adding a tax to building hotels on mangroves, yet when these events come to fruition, the majority of people are content as free-riders. What can be done to help Barbados and other tropical island countries realize the importance of conservation? How can the Barbados government work to enforce laws passed encouraging conservation? The study states that "the willingness to pay for improving coral cover from 15% to 25% is roughly US$41 (ML and CL models) and may be as high as US$62 (LC model, class 1) per 2-tank dive.” In addition, the researchers highlight that Barbados has much to gain from capitalizing on the willingness to pay to conserve. Options for the future could include a permit system for diving, fishing, polluting, etc, as well as working together with other Caribbean countries to come up with a solution that works not only to protect Barbados’s biodiversity, but also that of the Bahamas, Haiti, the Dominican Republic, etc.
Toggle Commented Feb 3, 2016 on ECON 255 for next Thursday at Jolly Green General
In ninth grade biology class, one of the first things students learn is about Darwin's Theory of Evolution and the concept of natural selection. I find natural selection to be particularly interesting, especially because it applies to almost every species except, to some extent, humans. In the textbooks, we usually see the classic example of the population distribution of the white rabbit and brown rabbits in the arctic. Because of the snowy environment, it is ideal for prey to blend with the environment to best ensure survival; therefore, the white rabbits flourish and the brown rabbits slowly die off as natural selection works its magic to ensure survival. However, humans have learned to beat the system. Over the course of time, we have become a slave to the welfare systems, only one of the many factors that contributes to the abnormality that is the 7 billion strong human population. The question remains: is there something that can be done about the practically overflowing population of the human race? Is there a market solution or an incentive to protect our precious natural resources and prevent the downward spiral of the tragedy of the commons? As much as we like to think of the world as infinite and the environmental changes as not affecting us, the issue of population and the tragedy of the commons is something that can’t be ignored for much longer. Hardin poses the question of how to legislate temperance? And his question is valid. Unfortunately, posing strict laws and caps on population is hard to enforce and causes a growing discontentment in the population. What if China eliminated the one child law and allocated the resources to enforce the law elsewhere, creating an incentive to lower population. How do lawmakers and economists account for different preferences of people and religious practices that prevent some couples from engaging in contraception? Will there ever be an effective solution? Could more research and education about population growth, effective contraception, and incentives to have fewer kids help, if at all? I am certainly not qualified to answer these questions, and unfortunately we are crunched for time to solve the problem of over-population before we are too late.
Toggle Commented Jan 20, 2016 on ECON 255 for Friday at Jolly Green General
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