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Sydney Goldstein
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This paper was a nice paper to have as the last paper of the semester. I particularly found the discussion of whether or not it was poverty driving aid or aid reducing poverty to be quite interesting. In the past when we talked about dual causality, it didn’t matter the direction as both were positive. For example female agency driving development versus development driving female agency. Both of these stories were true and it did not necessarily matter in which way the casual link ran because either way, the outcome was something positive. But, with the issue of aid, it does matter. If poverty leads to more aid, but that aid doesn’t actually reduce poverty, then spending is essentially wasted. Although, if aid does reduce poverty then the spending is justified. What makes this issue even more fascinating is that it is subject to the classic “it depends” phenomenon. Sometimes aid can reduce poverty, but in other instances it might not. What was interesting to me is that this study found that aid may not impact income, but can improve living standards, education, and health when gains from aid are measured using the MPI. I actually think that there may be benefits to aid targeting living standards, education, and health rather than just increasing the income of the poor. This is because households may misallocate funds (not necessarily intentionally, but just not make proper investments in education due to asymmetric information). Furthermore, targeted aid on education and health could cause improvements to human capital that could have greater long term effects.
Toggle Commented Nov 13, 2020 on Last Post of the Year at Jolly Green General
To mirror the sentiments of most of my classmates, this paper was very difficult to understand. From what I do understand it seems that past econometric studies were unable to provide support for the concept that the condition of global financial markets such as the bonds market, as measured through interest rates in advanced industrial countries such as the US, act as a determinant of capital flow to emerging market and the pricing of external debt. The reason that past studies failed is because they relied upon disaggregated data. This study aimed to improve upon past studies by looking at both, “international investors’ appetite for developing-country debt but also the borrowers’ decision to supply these obligation”. This study found, by looking at the international bonds market, that global credit conditions do have an impact on the developing country debt market. It found that higher US interest rate lower demand by international investors for fixed-rate issues by Latin American borrowers. If I am understanding this correctly, this makes intuitive sense since when the rates are higher in the US, the returns to investment will be greater and thus demand will increase drawing demand away from the fixed-rate issues. Because this paper seems to rely heavily on the interest rate and bonds market, I wonder how shocks to the bonds market would impact the findings of this paper. I also wonder more specifically on how global shocks such as the current pandemic would effect it versus and regional shock would impact it.
Toggle Commented Nov 5, 2020 on For Friday's Discussion at Jolly Green General
In this class as well as some of my other classes we have often discussed how poverty is a cycle, and that it often impacts generation as it can be very hard to escape from. This is often due to the fact that budget constraints of parents limit their capability to supply inputs to human captial such as good health, nutrition, and education to their children. According to this paper CCT programs such as Progresa are the perfect way to not only improve the lives of individuals at the present moment, but also to break intergenerational cycles of poverty. This paper provides sufficient evidence that CCTs have intergenerational benefits that are as large or larger than current poverty effects. The study did this through showing that after the implementation of Progresa there were large effects on the subsequent generation’s educational attainment, work, earnings, and household economic status. It found that these gains were particularly high for women, which is especially important given other studies that suggest that investments in women’s education have substantially large spillover benefits. Furthermore, gains in education and earnings for women is also an important aspect to increase the agency of women and thus makes CCT programs even more important. In this paper it was fascinating to analyze the relationship between our current topic of human capital and the past topic of gender. Additionally, something I wonder about is how important are incentives. CCTs reward families who meet certain criteria. Essentially, welfare programs are conditional upon the receiver’s actions. I wonder if it is necessary to make them conditional upon certain behaviors in order to see the benefits observed in this paper or if other welfare programs that aren’t conditional would still cause similar benefits.
Toggle Commented Oct 29, 2020 on For Friday's Discussion at Jolly Green General
This paper was very interesting to read especially in junction with the material I am learning in my economics of education class. Sarah pointed out something that I think is worth discussing more. She said that she is, “shocked that investment in education is not more of a priority—in some low-income countries but especially in the U.S.” To this is would respond that the U.S. has been increasing real spending per pupil in K-12 education since the 1950s. This increased spending would suggest that it is valued, at least to an extent. Something that is interesting to note about this increased spending in the U.S. is that it was not accompanied by higher test scores. Some economist argue that this is because there simply aren’t returns to investment in education in this scenario. This could coincide with this paper’s finding that returns to education are lower in high income countries. It may be the case that because there are diminishing marginal returns, the returns have become so low that they’re immeasurable so increased spending in the U.S. on education has no measurable impact. But, another potential reason that we have seen an increase in spending, but not necessarily test scores is that there has been a demographic change in students. Now there are far more students in the education system who have limited English proficiency as well as more students who require special education. Because these students require more resources they are more expensive to educate so the increase in spending may be necessary to keep test scores the same. Additionally, theorehtical models and intuition suggest that investment in education is important and will lead to gains in human development (as we have discussed in the class regarding Schultz and Human Capital Theory). Now bringing the conversation out of the context of the U.S. and into that of developing countries, all evidence points to the fact that investment in education is a crucial part to development. Primarily through the improvement of human capital which are inputs to production. This paper discusses how education is generally associated with higher earning due to increased productivity rather than screening, which is not something that surprised me. Furthermore, the gains to education in developing countries are much higher and thus it seems clear that it is imperative to invest in education especially that of women and in primary education for which high returns are seen as well.
Toggle Commented Oct 22, 2020 on For Friday's Discussion at Jolly Green General
Something that Duflo’s article got me thinking about was how do we empower women and expand their opportunities and capabilties but without producing a cost to men. In Duflo’s article, she discusses the tradeoffs that exist between female empowerment and costs to men. This is something I found very interesting because I think it is somewhat of a taboo topic that many are reluctant to discuss. This may be because some fear female empowerment would be limited if there were perceived costs to men, which isn’t an invalid concern, but none the less I think it is important to discuss all aspects of female empowerment. But, female empowerment has value not only in development but also intrinsic value from a moral and ethical standpoint that push its benefits beyond potential tradeoffs (at least in my opinion). Most of the tradeoffs mentioned were that there would be less men in leadership positions or politics, which I think one could make the argument that these positions are in fact overly saturated by men (specifically white, older men) thus an equalizer is needed even if it has the cost of removing some men from politics and leadership positions. Duflo argues (and I agree), that polices that equalize representation of women in the workplace and in politics are imperative because they allow for women’s voices to be heard. There is value in that alone because even though a male could fight on behalf of women’s issues, he can only do so from a male’s perspective which is inherently limited to the scope of being a male. Thus, in order for females to truly be represented I’d argue that we need a female perspective, someone that understands the world and its issues as they pertain to females from a female perspective. Now granted not all females think exactly the same (just as not all males think the same), but I think a female perspective even in its most general sense can relate more closely to females than a male trying to take on a female perspective. To give a metaphor to hopefully clarify the point I’m trying to make, it is similar the the controversy over American Dirt. American Dirt is a novel about Mexican immigrants written by a non-Mexican white woman. Her critics state they even though there is some value in her writing in that it got a conversation started about immigration, it lacks authenticity because it is written from the perspective of a white person who can’t speak to what it is like being a Mexican immigrant. The same applies to woman’s issues. Men can speak on them and raise awareness, but they will never have an authentic view as to how these issues impact women purely because they aren’t women. For this reason alone it is crucial for women to have a voice. To bring this back into economics, the decisions made by women, which would be a product of female representation and autonomy, and/or policies that empower women tend to have positive effects on women and children, enhancing overall efficiency and increasing the size of the economic pie. Which, in turn, is good for development and thus everyone.
Toggle Commented Oct 8, 2020 on Duflo for Friday at Jolly Green General
In the paper by Epplin, there were a few lines that read as follows, “formal economic theory was not available to explain market failure and the justification for government intervention in markets. It had not yet been ‘discovered’ (Bator, 1958). The case for publicly funded common schools was more a matter of common sense, which is the case for many results derived from the standard theory of microeconomics.” This line reminded me a lot of what we had read in Krugman’s piece about the rise and fall of development economics. The idea that theory and model couldn’t quite explain something yet, intuitively we knew it made sense. This was the case for publicly funded schools as well. Krugman stated that high development theory depended on economies of scale which were unable to be explained using models. Schools, are an example of an economy of scale as there are high fixed costs, but the marginal cost per student decreases as there are more students. Two of the largest of the fixed costs are the land on which to build the school and the school structure itself. Epplin’s piece addresses the land side of these fixed costs. Epplin talks about how the marginal social benefit of education is greater than the marginal private benefit and thus education is a positive externality. As we have discussed in class externalities lead to market failures and thus government intervention is needed to correct the market failure, in this case to provide greater access to eduction through employing a policy regarding land grants. The policy regarding land grants is similar to the land reforms in South Korea we read about in “Miracle on the Han”. I liked this paper a lot because it tied into many concepts we have already talked about and created a more complete understanding of the material.
Toggle Commented Oct 1, 2020 on For Friday's Discussion at Jolly Green General
The article by Quiggin stated that neither technology nor the environment are barriers to achieving a good life for all, but rather that it is our beliefs, values, and social institutions. In his closing paragraph he states, “If we collectively prefer to stay on the treadmill, chasing bigger and better consumption goods, we can do that, at least until we hit the limits of sustainability. But if we choose to use the opportunities given to us by technology to eliminate poverty and drudgery, and to protect and restore the environment, that choice is equally open to us.” Although I don’t think this was his intention, especially since he has stated we could increase our standard of living and still reduce the use of coal, gas, and oil by 90%, this statement makes it sound like bigger and better consumption is mutually exclusive to sustainbilty, but I think that is far from the case. I think the more relevant issue is what we consume and how. For instance, you want a new fancy car, well you could buy a gas guzzling Hummer or Tesla’s sleek new electric car. Both cars carry somewhat of a status symbol if that is part of what a consumer is factoring in, but one is sustainable and the other isn’t. So consumption itself is not the problem but rather whether consumer preferences align with beliefs and values that will support the production of sustainable goods. If everyone decides to buy the Tesla because they want the car whether it be for functionality or status rather than the Hummer, the market would self correct and thus only Teslas or sustainable cars would be produced. But, if consumers don’t have preferences that align with sustainability then there is a need for government intervention to correct the market failure caused by carbon emissions. I wonder what Quiggin's viewpoint is on whether we can influence consumer preferences without using policy or whether policy is needed to correct the market failure. Like with most issues the answer is probably situational depending on the good, its demand, and the availability of substitutions/alternatives.
Toggle Commented Sep 24, 2020 on Readings for Friday at Jolly Green General
In this class we have discussed whether in order to create growth and development the burden lies on individuals/firms or the government. Like with many other issues the answer we put forth is that it depends. This case study on growth and development in South Korea highlights this “it depends” phenomenon as growth is linked to both market factors and governmental (policy) factors. Under the rule of Park Chung Hee, techniques combining state planning and private entrepreneurship were used to promote economic growth growth in South Korea. In another example regarding education, which is an input into human capital and thus can increase growth and development, a mix of state and private intervention was used to make South Korea have the best educated work force out of any country with comparable income level. State and private groups jointly worked to improve adult literacy. A nuance of the “it depends” phenomenon is that sometimes government regulation in one sector can cause a spillover effect as the market corrects itself given a new policy, thus both the market and the government pay intertwining roles. One example of this is land reform in South Korea in 1950. The land reform limited the amount of land that could be owned. This decreased tenancy, causing it to virtually disappear, Peasants became entrepreneurial farmers and many landowners invented in businesses or established schools. This reform thus redirected capital toward commerce, industry, and education. Another nuance of the “it depends” circumstance is whether or not the government has the ability to enact a policy that actually does what it is supposed to do. In South Korea the employment of technocrats likely tightened the ability of the government to make effective policy. While the role of the state versus the role of the market does depend, the answer generally lies somewhere in the middle where it is a mix of both private and state influences that lead to growth and development. In South Korea there are substantial policies in place that regulate the market and promote certain behaviors (for instance the creation of centers to promote research and disseminate knowledge especially as it pertains to technology), but despite these state controls there are still some market freedoms and private groups that aid in growth and development. I find the relationship between the private and public sector in South Korea to be very fascinating.
Toggle Commented Sep 17, 2020 on Miracle on the Han for Friday at Jolly Green General
As Didi also stated, one of the lines that really spoke to me was that, “models are maps rather than reality”. Often times models fall short in isolating variables to prove causation rather than just correlation, and thus casual links are very hard to prove. This is because in many cases RCT are either not possible or unethical and thus we rely on trying to observe sufficient information or using natural/quasi experiments when collecting data to form basis for models. The problem with this is in a regression analysis, beta can become biased due to a correlation between the epsilon or error term and the variable(s) being measured. Thus, models while they can be good maps as Krugman said, are almost never without flaw relying on assumptions in order to hold true. A prominent example often brought up in my Economics of Education class is the model for the casual effect of education on earnings. It is difficult to create a model that is able to calculate solely the difference between wage with schooling and wage without. This is for a number of reasons. One of the most prominent ones is that students who obtain higher education levels may be systematically different from those who don’t (ie higher ability or productivity). Those systematic differences, regardless of education level, are likely to impact earnings. Thus, these differences are likely to inflate the wage gap between those with education and those without education. So in order to attempt to isolate the casual impact of education on earnings economists try to observe sufficient information about student’s backgrounds to try to control for the non-random sorting. They also try to find natural experiments where a policy enacted creates some type of natural sorting. To determine the causal impact of education on earnings a mincer regression is often used. The issues with this is that it assumes a linear relationship between education and log earnings. This is often not the case as one year of college would not carry the same relative weight as four years, where then a Bachelors degree is earned. The second issues is that beta may have bias, as mentioned above due to correlation between variables and error terms. The model often assumes that there is no correlation, which can be problematic.
Toggle Commented Sep 10, 2020 on Krugman for Friday at Jolly Green General
The biggest takeaway for me in this paper was how fast growing countries adopted export-led development strategies and set up environments that encourage FDI, whereas the trapped and lag-behind countries had strategies involving import substitution and protectionism. I was curious to learn more about the economic development zones (EDZ) since a detailed description of how those functioned was not given, beyond that they adopted policies that favor production and foreign investment. I did some research into what specific policies were used to promote EDZ and FDI thus inspiring growth and development and found an interesting paper by Xiao Wang called, “The Role of Economic Development Zone in National Development Strategies: The Case of China”. The reason no concise structure for EDZs was given is that there are several types with slightly different structures that cater to specific industries. China has over 10 different types of EDZ. Most EDZs however used financial incentives to encourage businesses to move into these zones and for individuals/groups, especially foreigners to invest. One of the major incentives commonly used are favorable tax policies and exemptions, including exemptions on duties. Other prominent strategies include free trade, fostering development through agglomeration, and fostering science and technology, both in innovation and advancement and enlargement. This couples with what we talked about in class Monday relating to Gary Fields’ dualistic development. With EDZs China is doing some combination of enriching and enlarging the modern sector. It also relates to our discussion on economies of scale and how in many countries the barriers of entry are too high. EDZs may provide a solution to some barriers to entry since they promote agglomeration which leads to cost savings. This makes EDZs largely favorable which is likely why they exist in over 130 countries. Link to paper: https://www.rand.org/content/dam/rand/pubs/rgs_dissertations/RGSD300/RGSD320/RAND_RGSD320.pdf
Toggle Commented Sep 3, 2020 on Reading for next Friday at Jolly Green General
Something that this paper by Sachs touched upon was the concept of responsibility. Sachs describes how MDGs were made as “targets for poor countries, to which rich countries were to add their solidarity and assistance through finances and technology.” Although not directly said, Sachs implies this was a shortcoming of the MDGs by stating that it is necessary that the SDGs “have a different feel about them.” The SDGs are meant to pose goals and challenges for all countries for global wellbeing and betterment. Even though this framing of the challenges and goals for development maybe be favorable to those outlined by the MDGs, I still believe there are shortcomings due to a lack of responsibility. For example, even though it would be better for everyone to limit pollution say Country A decides not to follow the guidelines or agree to to the SDGs in the first place. It appears that there is no true mechanism to hold Country A accountable. Additionally, the atmosphere is a prime example of a public good and thus is subject to the tragedy of the commons. Without a mechanism for countries (and firms operating within countries) to be held accountable for pollution there is not much basis for countries to stop polluting except for on a moral basis and the concept of social responsibility which may not be enough when firms or countries are driven by their own personal interests rather than the greater good. On another note something that this paper lead me to think about is the fact that establishing clean energy in countries with low levels of development may actually be easier than establishing clean energy in countries with high level of development that are already based on non-renewable energy such as coal. This is for two reasons: 1. People tend to stick to old, reliable ways of doing things such as the rural farmers who wouldn’t grow a new crop even though the plant scientists knew it would be better. This means that it is likely that in countries where people are already dependent on coal, moving them away from coal may be more difficult than in countries or regions where there isn’t that kind of energy infrastructure to begin with. Where there aren’t large coal companies and large businesses running off of coal. 2. In developed countries where infrastructure and mechanisms for coal mining already exist there is often the argument that implementing clean energy is too costly upfront (while long term there is actually data that suggests clean energy is cheaper both directly in monetary expenditure and in term of societal wellbeing through better environment, health, etc. the upfront costs seem to be a consistent argument). Because in less developed countries infrastructure may not exist to start with, there will be upfront costs regardless to build any kind of energy infrastructure so it might as well be clean energy infrastructure due to the environmental benefit.
I forgot to add a blurb about how this makes me a better citizen, so here's a brief part two. This helps me be a better citizen, since now I know that everything is so interconnected I realize just how ignorant I truly am. I learned that it is foolish to think you know everything and how everything relates because the world and topics are so expansive. Furthermore, with every new piece of knowledge you gain, you should be asking more questions. I’ve learned that learning is something that never stops, from learning new things, to connecting old ideas into a more cohesive understanding of the world. This allows me to challenge myself and those around me to be better and do better. It is challenging oneself and those around you that lead to progress and change through the dissemination of knowledge and ideas. Thus, I will always keep learning and share what I do learn with others.
Toggle Commented Apr 22, 2020 on ECON 255 Final Exam at Jolly Green General
My biggest takeaway from this class is that everything is interconnected. On the surface that seems like a silly assertion, but truly I never realized how many things are related to another. First, and most obviously, this class is a relation between economics and the environment. I learned how economic concepts relate to environmental issues and climate change. I can now apply terms such as labeling coal a negative externality and discuss what the socially optimal level of coal use might look like. I can also discuss the tradeoff between development and conservation relating it to a PPF. While I knew some about economics and the environment independently, I had never related the knowledge of one to the other, and this class challenged me to think about these topics in a new intertwined way. I learned that a portion of the solution to climate change depends on economic solutions such as taxes, incentives, subsidies (or reducing them in the case of coal), and the existence of alternatives. But, I also learned, that while something might make sense economically, it might be difficult to accomplish in reality due to bureaucratic and political complications, thus also intertwining politics. For example, John Oliver talked about how in America and many other countries such as Canada the word “tax” has become a dirty word, and thus people seem to be adverse to a carbon tax purely because of the word tax, despite it being socially optimal. Also, the fact that there was a conservative and progresive case for the carbon tax rather than just a single case for taxing carbon, that party lines can complicate issues too. Furthermore, I learned that health and medicine is related to the environment. The biodiversity of places such as the Amazon could hold an ingredient to a new drug, particles released into the air as byproducts of coal production can cause cardiovascular issues in fetuses when breathed in by a mother at higher rates than smoking, and ozone cover can impact peak respiratory flow. And similar to this topic, I also learned that environmental issues are heavily linked to poverty. Poor communities are more likely to suffer the health effects associated with pollution than other demographics. They’re the ones that due to lack of means live near factories, coal mines, etc. that breathe in polluted air, drink contaminated water, and work dangerous jobs in mines and other locations. Finally, I learned that these issues also relate to behavioral sciences. Concepts such as moral suasion rely on psychology. So do the concepts of whether to use positive affect or negative affect when trying to convince people of an issue. There are probably many more fields and topics that can be related to what I learned in this class, but these were my main connections that were made in this class. This taught me to approach issues as being a small part of a larger, more extensive picture rather than as something isolated or independent. Thanks for a great semester full of valuable discussion!
Toggle Commented Apr 22, 2020 on ECON 255 Final Exam at Jolly Green General
From reading Fraker’s article and hearing about the Blue Marble project, I became interested in what kind of literature exists that links nature and cognitive science. I found out that there is a large field of science called environmental psychology with extensive literature. One paper that I decided to read and found the most relevant is called, “The impacts of nature experience on human cognitive function and mental health,” by Bratman, Hamilton, and Daily. In their introduction, the authors discuss how it is theorized that humans are inherently fond of nature due to evolutionary influences. Furthermore, that evolution may influence what specific type of nature a person may prefer i.e. mountains, beaches, desert, forest, etc. Another popular hypothesis states that grasslands and savannahs may be valued more due to sightlines and room for flight response that early humans relied on for survival. The paper states that although scientists may disagree over details of the argument, most postulate that since the evolutionary experience of humans relies on natural environments, we are therefore inclined to resonate with it, whether it be consciously or not. Consequently, it is ascertained that natural environments increase positive affect and decrease negative feelings, especially in environments that have evolutionarily aided in survival. Ulrich, a scientist that was very active in the 70s and 80s, suggested that landscapes with water and vegetation were most beneficial for survival. He ran an experiment that showed color slides of what he considered the ideal landscape (water and vegetation) to one group and city slides with little to no vegetation to another group. He measured stress levels before and after and found that by stress reduction theory the ideal landscape helped moderate and diminish arousal (stress) and negative thoughts within minutes through psychological pathways. I think the discussion of how evolution relates to an inherited love of nature is something very fascinating. What further interests me is how urban environments impact this connection, both in short term psyche and in a long term evolutionary framework. Current studies show that having greenspaces in urban locations, improves both physical and emotional health. But I wonder, as the world becomes more urbanized, will our brains change, or will the inherited love of nature persist? I am inclined to think that inherited love of nature will persist, due to the literature I have read, but I still think it would be an interesting study to try to pursue. Paper (warning it is 136 pages but is very interesting, would especially recommend pages 119-130 which talk about stress reduction and attention as related to the environment): http://willsull.net/resources/BratmanHamiltonDaily2012.pdf Side note: Much more cognitive functions are discussed such as impulse inhibition, but I focused on the aspects of the paper that were most relevant to Fraker’s article.
The Solutions Project piece was overall very positive and encouraging. Their website talked about how their goal was to track media coverage on renewable energy resources (WWS). The trends they’ve noticed since 2018 is that discussion seems to be mostly positive, with the conversation on the GND and clean energy continuing to be in the spotlight. The continuance of the GND’s prominence shows that there may be changing attitudes towards the environment and the issues it’s facing. I think the one downfall of the Solutions Project is that it is also trying to relate equity to environmental issues. As we know in this class, poverty, race, and environmental issues are all very intertwined, but I think that the average American does not view it that way. I believe there are many Americans who view inequality and environmental issues as being completely separate, even though this is not the reality. For this reason, I believe both GND and interest groups such as Solutions project should keep the issues separate, at least in official wording. Even though a program that taxes pollution may end up taxing the rich (who pollute more) at higher rates than the poor I think it should just be framed as carbon pricing (not even tax, since that has become a stigmatized word) rather than an equalizer between the rich and the poor. When too many issues get piled together, the right seems to interpret that as “crackpot leftists, trying to change the way we live”. Since it is the right that mainly needs convincing on the importance of clean energy, it is important, I think, to frame the legislation in a way that convinces them to support it. Thus, including buzz words like equality between social classes which could be skewed to look like some sort of socialist agenda should be kept out of the language of a bill or even resolution. The second piece I read was called “Making Public Works Work”. It talked about how public infrastructure in the US is severely lacking and poorly managed. It further discussed how the GND could help better US infrastructure, create new jobs, and act as a stimulator to the US economy in a manner similar to the New Deal. What I found interesting is that in its discussion of how the US lacks a capacity and national purpose in public infrastructure, the one cited exception was the long-term planning and financing of the 1950s National Interstate Highway system, which was constructed, in part, as a section of national defense. The official reasons for construction were that it would, “eliminate unsafe roads, inefficient routes, traffic jams and all of the other things that got in the way of ‘speedy, safe transcontinental travel,’” and that, “in case of atomic attack on our key cities, the road net [would] permit quick evacuation of target areas.” This reminded me of Wednesday's discussion where we talked about how it might be effective to frame global warming as a national security threat and use the defense sector to combat it. It does seem that the defense sector is the best at getting public projects accomplished. This was something that caught my attention Wednesday, and in this article, so I started looking into whether the defense sector was doing anything related to global warming in connection to it being a national security threat. While nothing official seems to exist, there are interest groups who are creating a framework for why global warming is a national security threat and how it directly impacts the effectiveness of the military. One such group is the Climate Reality Project. Some of the things they discussed were how changing weather patterns impact naval vessels and aircraft’s ability to be deployed. The article includes other much complicated arguments such as how climate change relates to our conflict with Syria or how it relates to our alliance with Nigeria since Nigeria is struggling against rising sea levels. If you have a few spare moments, it’s definitely an interesting read that lays out how climate change can impact the US in ways many people haven’t even considered. Climate Reality Project: https://climaterealityproject.org/blog/climate-crisis-threat-national-security
What I found most interesting was reading all the articles/watching the John Oliver video all together. Many people act as if the GND is a big scary document that mandates what we do, and controls our lives to an absurd extent. The last article, “The 10 Most Insane Requirements Of The Green New Deal,” ascertains that the GND will ban “affordable” energy such as coal. This is not entirely true, as the document itself cites that there will be an effort to transition off of them ASAP, but there is no mention of an outright ban. Furthermore, coal is only considered affordable because it is so heavily subsidized by the government, if clean energy was subsidized at the rate coal it would be considered affordable as well. Furthermore, in considering cost, the author of this article is only making a case for direct monetary cost rather than including the cost of negative externalities such as environmental damages and public health. If these factors are taken into account clean energy is much more desirable. This author then dives into assertions that are even more ludacris such as eliminating air travel and 99% of cars. Once again, the document makes no mention of a direct ban and says it will, “[overhaul] transportation systems in the United States to remove pollution and greenhouse gas emissions from the transportation sector as much as is technologically feasible, including through investment in—zero-emission vehicle infrastructure and manufacturing; clean, affordable, and accessible public transit; and high-speed rail…”. This means there will still be cars and airplanes, they will just be greener models--my question to the author of this article is why is he/she so concerning about keeping a carbon emitting car, the purpose of transportation is to get you from one place to another, and if it does that, then it’s serving its purpose. In fact, the document is quite reasonable in acknowledging that these green changes will be made to the point where it is technologically feasible, therefore, making sure transportation will continue to exist and serve its function. It is quite amazing how much the points in the GND have been distorted to the point where it’s absurd. The document is not long or difficult to read, as John Oliver pointed out, it’s 14 pages. Thus, I don’t understand why more people don’t just read it themselves, rather than listen to extremely distorted versions of it. As the Stanford article pointed out, one of the biggest problems that the GND faces is political and social aversion. Jacobson wrote, “The fossil fuel industry has a lot at stake, and they sow doubt and oppose all legislation that will phase them out”. If I had to bet where most of the distortion of the ideas proposed in the GND are coming from is likely leaders in the fossil fuel industry who have everything to lose, so they make AOC and the GND look absurd. I attempted to do some research on the total monetary cost of the life cycle of coal for reference, but was having trouble finding something completely comprehensive. I did find this website that has a pretty detailed outbreak of cost per short ton as well as transportation costs--which are surprisingly high. It also discusses the price of coal by region and discusses other factors such as how coking coal makes it more expensive. https://www.eia.gov/energyexplained/coal/prices-and-outlook.php
Toggle Commented Apr 15, 2020 on ECON 255: The Green New Deal at Jolly Green General
In an attempt to make this post more like a discussion, I will reply to what some of my peers have commented. Steven pointed out that both articles have similarities in their cases for a carbon tax/dividend wherein you would think that some bipartisan solution would be feasible. The problem is political polarization wherein neither party is willing to compromise. Maisie pointed out that despite commonalities the Conservative case proposed a 40$/ton tax whereas the Progressive case proposes a 230$/tax. This is quite a large disparity and shows that even though we think of numbers and calculations as something concrete, when dealing with projections and interpreting data, statistics can actually be more subjective than we think. Logically, we would think that even though there is a disparity some compromise would be reached where the tax ends up being in between the two values, but due to political polarization which has only been increasing in the last decade compromise is a lot easier said than done. This goes to the point that while we think something is obvious or is a clear environmental problem that would easily be solved, it doesn’t function like that since everything becomes so politically entangled. Environmental issues are no longer just environmental issues, but rather become political ones entangled with various agendas. More to the point, Steven pointed out how the vast majority of Americans would benefit from this policy being in the bottom ¾ income bracket. He also points out that stereotypically, environmentalists tend to be wealthier so some of the top ¼ of the income bracket would also favor the policy. What most people don’t realize is that most members of congress are in the top ¼ of the income bracket. The base salary for a member of congress is $174,000 annually (keep in mind this is for an individual, not household). In 2018, the median household income in America was $63,179. The individual salary of a member of congress is therefore over double the median household income of an American. This calculation is not even including other wealth members of congress hold such as inherited wealth or money earned from writing books, making appearances etc. Most members of congress are worth in the millions of dollars. So why is this relevant? As the Progressive case explains the wealthy have a much larger carbon footprint than other Americans. Olivia pointed out how a carbon tax could act as an equalizer and solve some issues relating to income inequality while also benefiting the environment. While we see this as optimal, those in power who have large amounts of wealth likely aren’t going to support such a policy due to greed and other personal interests. It’s easy for a politician to say they care about something, but when push comes to shove I’m willing to bet more are voting in their own financial interest than for the greater good. Money classically acts as an incentive and thus when people are motivated by money outcomes are likely to not be socially optimal.
Toggle Commented Apr 13, 2020 on The Case(es) for a Carbon Tax at Jolly Green General
It’s discouraging, but not surprising that many people in the US are not doing their part and staying home. In countries with a more centralized government the social contract to which citizens subscribe is far more extensive. For example, in China and Singapore the government simply states, “don’t leave your house,” and people won’t because they have faith that the government is acting in the people's interest. In the United States, people are reluctant to give up personal freedoms, even if overall it would benefit society. There seems to be a mentality that the government can’t tell people to stay home because that is “unconstitutional” and infringes on the liberties and freedoms this country was founded on. Furthermore, there seems to be a very individualist view of the problem. Most of the people who are ignoring shelter in place orders seem to be in the mind set that they are young, healthy, and untouchable. But, the fear is not necessarily for them as individuals. Shelter in place orders exist so that those who are essential personnel and can’t stay home, who may be vulnerable are less likely to be infected. It's all about flattening the curve in a way that’s similar to the concept of herd immunity. There’s a high likelihood that a lack of understanding of this is what leads people to ignore shelter in place orders. This is probably why those with lower levels of education are more likely to not practice social distancing, as discussed in the article. Income likely relates to this since income and education are confounding variables in which higher levels of education usually correlate to higher income. This would explain why those with lower income are also less likely to practice social distancing. On a similar note, studies have found that poorer communities have higher rates of contracting the virus as well as higher death rates. I wonder if it is due to the factors discussed above, environmental justice issue, or some function of both. It is most likely the latter, but seeing research on this would be fascinating. An interesting article on COVID-19 and poor communities: https://www.hrw.org/news/2020/03/19/us-address-impact-covid-19-poor#
Although the article itself is extremely alarming, there is a positive aspect in the fact that there are now many articles about environmental justice coming to the forefront of conversation. Wednesday, the governor of Virginia, Ralph Northam, spoke out on how coronavirus is impacting marginalized groups, especially African Americans, at higher rates than other groups. He stated New York and Louisiana (especially NO) as examples and stated the same is likely occurring in Virginia, but that the data in Virginia is incomplete as 54% of people tested did not report their race and an additional 6% marked “other”. The New York Times, The Washington Post, and other major news outlets have also released articles on how COVID-19 is impacting those in areas with high levels of pollution at higher rates due to weaker lungs and poorer health. Most of these articles also relate the issue to poverty and minority groups especially African American and members of the Latinx community. The thing that I find interesting is that it took a pandemic to bring this literature to the forefront. Extensive literature on environmental justice existed long before the coronavirus. For example, literature by Janet Currie, some of which we have read in this class, details several environmental factors that can impact health and welfare especially in children. Other literature, from the early 2000’s details how the SARS outbreak impacted those living in poverty and those who live in polluted areas at higher rates. But despite all the literature that exists, before COVID-19 people were either ignorant or just didn’t care about the health related impacts of pollution, or how it relates to equality in that those living in poverty and/or minorities are more likely to be impacted. This is interesting because it shows people are anything but logical, which is what we often assume we are. It all goes back to the Krugman piece where industries such as the coal industry work to discredit and suppress literature due to personal interest, the public remains ignorant, and ideology and party lines keep groups/politicians from acting in society society’s best interest. The EPA rollback on emissions can be attributed to definitely, interest and ideology, and some could argue ignorance, but I personally doubt that given the amount of literature that exists, so if it is ignorance it is willful ignorance given that the agency's existence is to in fact research and protect the environment (including environmental justice issues). In the future, I hope environmental justice continues to be focused on even after the buzz due to COVID-19 ends. Article on Northam and VA: https://www.richmond.com/news/virginia/virginias-data-on-how-coronavirus-affects-minorities-is-incomplete-northam-says-many-medical-providers-arent/article_a2683a31-e771-5c23-bbc1-89b74f1540c3.html
The “Ten Facts about the Economics of Climate Change and Climate Policy” article discusses how climate change will increase mortality rates, especially in Africa and the Middle East because warming will exacerbate heat related health issues. This got me thinking about how it might contribute to increased mortality rates in other regions due to other less direct causes. Specifically, I pondered how it would impact Bermuda. Bermuda although surrounded by water, is faced with the challenge of freshwater shortages due to a lack of groundwater, lakes, rivers, etc. The country has been able to adapt to these shortages by collecting rain water. The iconic white, stepped, limestone roofs associated with Bermuda actually slow rainfall so that it can be stored. The white color reflects UV light from the sun and helps purify the water. Fresh water shortages are such a big problem that Bermuda law mandates that each house must have eight gallons of rain water storage per square foot of roof space. Since climate change includes changes in precipitation patterns in which some regions will receive less rainfall, I wonder how this will impact countries such as Bermuda that rely on rainfall for freshwater. So besides posing a threat to ecosystems and agriculture, a change in precipitation in some regions may threaten water supply and subsequently public health and wellbeing. On the bright side I was happy to read more about how renewable energy prices are falling not including subsidies. Eventually technological advancements will make the price so low that the market will shift to it without question.
These articles were definitely uplifting and provide hope for the future in terms of improving how firms and individuals interact with the environment. One aspect that I found interesting is that two of the three articles discussed the cost of the product to firms and individuals. The Evoy article discussed how the price of the outboard motor was TBD but that Evoy projects that commercial operators, at least in Norway, would break even at about 350 hours of runtime per year, which is less than an hour a day. The wind turbine article also discussed cost and how firms were looking to improve technology and drive down costs.This shows how firms and individuals are concerned about dollar price and profit as opposed to the focus being solely on efficiency. The ironic part is that if the government put the same money into subsidizing renewable energy and into renewable energy research and development as it does into the fossil fuel industry, it would be just as cost effective and likely even more cost effective than using fossil fuels as the inputs of production. Furthermore, this would also be efficient and increase social welfare.
Toggle Commented Apr 3, 2020 on ECON 255: Good News at Jolly Green General
One way this scenario can be modeled is through a negative externality model wherein the MSC of polluting is much higher than the MPC because the pollution impacts respiratory health which is likely to increase instances of COVID-19 lowering social welfare. Another model that can be used is a feedback loop to express the interdependent relationship between increased pollution and more cases of COVID-19, because if the number of cases continues to increase (as more pollution would cause) and the EPA continues to respond in the same manner then the rollbacks to attempt to help the economic situation surrounding COVID-19 would cause more cases causing a damaging cycle. Another model that can be used to represent another aspect of this scenario is a basic supply and demand model. For example, ventilators are used in the treatment of COVID-19 and their supply is relatively fixed short term due to the fact that production takes time and labor inputs are strained due to COVID-19. Demand for ventilators is already high and is having trouble being met in the US as well as other countries such as Italy. The EPA rollbacks on emissions, that increase chemicals in the air that are associated with increased respiratory illness, will further heighten demand for ventilators since respiratory illness will increase instances and severity of COVID-19. Because of the disparity between supply and demand shortages will occur and at that point the ethical issue of who should receive treatment and who shouldn’t becomes an issue. The idea of how COVID-19 relates to pollution, ethics, and even poverty lead me to find an interesting article that discusses all of these things as well as compares it to the SARS outbreak. I found this comparison interesting as most people present COVID-19 as something unprecedented, but it is actually very similar to SARS as both are coronaviruses. This article includes discussion of how those who have less income are more likely to live in areas that have more pollution due to the inability to buy more expensive property away from pollution. This article talks primarily about a neighborhood in Chicago called Little Village where most residents are low income minorities. It discusses that because the residents of this area grew up breathing in soot from coal plants most of them already have poor respiratory function thus making them more vulnerable to COVID-19 and more likely to experience a more severe version of it. The article includes tweets by Gina McCarthy (president and chief executive of NRDC) that read as follows: “As someone who has dedicated her career to public health issues, I also want to share my thoughts on the ways #COVID19 is impacting different communities...This crisis isn’t simply a public health issue. It is directly related to social equity and environmental justice...It is directly related to our fight for clean air, clean water, a healthy environment, and healthy communities. #COVID19 is affecting all of us—our health and our way of life, but low-income communities and communities of color may face added risk.” I think the problems she brings up are the central idea of this article and important thing to consider today and everyday when making policy, such as rollbacks on emissions that are more likely to impact poor communities. Article: https://www.theverge.com/2020/3/19/21186653/coronavirus-covid-19-air-pollution-vulnerable-lung-disease-pandemic
The commonality between all three of these articles is that they discuss the impact of environmental issues caused by pollution/pollutants on human health with two of the articles focusing on physical health and one on cognitive function. What I find to be very interesting is that most of time pollution tends to be validated by interest groups and politicians on the grounds that economic productivity is important, and that stopping the use of fossil fuels that cause pollution in their direct use as well as in their acquisition or dissipation, would devaste the economy and cause GDP to fall. While this is unlikely due to the availability of substitutes that aren’t much more expensive (and if fossil fuel weren’t so subsidized might even be cheaper)and are readily available, in this argument I will entertain the idea that there aren’t cheap substitutes. As we know from Econ 100 GDP per capita is a measure of a country’s output that accounts for the population. Productivity is a key driver of economic growth that can be measured in GDP per capita. Productivity can be increased (thus increasing GDP per capita) through improvements in technology or through increased labor productivity. The point that I’m getting at here is that since an increase labor productivity causes a growth in GDP per capita, and the converse is true: a decrease in in labor productivity would cause a decrease in GDP per capita. Pollution that impacts cognitive health would decrease labor productivity and thus decrease GDP per capita. The same applies to pollution that effects physical health. For example, imagine a construction worker who develops a respiratory or heart condition due to pollution. The construction worker would not longer be able to work as effectively at a physically demanding job as that worker would be able if healthy. So, since labor an an input to most economic activity and labor would be less productive, output would also decrease. Thus, in accounting for how much the use of fossil fuels promote economic productivity one must also consider how it decreases productivity, which arguably would substantially lower the benefit of its use in favor of cleaner alternative that wouldn’t impact labor productivity. The scope would be even greater when considering childhood defects such as cardiovascular problems as mentioned in previous articles since parents would 1) likely have to take time off from work (less labor) to take the child to doctor appointments, 2) that the child will be a less productive laborer due to physical ailments, and 3) other potential factors such as time missed from school due to doctors appointments that would cause the child to be less productive in the future.
Toggle Commented Mar 12, 2020 on 3 short papers for Friday at Jolly Green General
This article was interesting because it provides empirical data associated with the many negative externalities that come with the acquisition, use, and dissipation of coal. Something that really stood out to me, is that despite the harm caused to the environment in every stage of coals’s life cycle as well as public health implications such as Black Lung, it is still is the predominant fuel used for electricity generation, and its demand is projected to double by 2030. This is fascinating since the technology for greener alternatives exists, but it goes back to the three I’s: Interest, ideology, and ignorance. Interest is probably the biggest contributor because groups such as coal corporations rely on coal for for profit, and because each of these firms are rent seeking they will try to maximize production efficiency at the point where demand equals their private cost rather than taking into account social costs. Furthermore, they will advocate that coal is the sole way to fuel the nation since there are extensive coal deposits and greener alternatives would be far too costly to implement, despite empirical data suggesting that this is not the case. On a slightly different, but still relevant note, I recently saw a news article that Takoma Park in Maryland seeks to ban fossil fuels in order to combat climate changes. Takoma Park has already been a pioneer for combatting climate change since they’ve replaced several gas stations with charging stations and have eliminated the use of nuclear power. The new plan furthers these efforts to go green by limiting coal use, banning gas stoves, and closing gas pipelines. The most recent update I’ve seen says that the plan was set to be enacted on March 4th of this year. Seeing the empirical data of how this plan impacts the cost of living as well as measures of environmental wellbeing and public health will be interesting. If the data ends up being favorable this plan could serve as a model to other cities or even states trying to combat climate change, and just maybe we will be able to slow the growth of coal use (and other fossil fuels) so that it doesn’t double by 2030. Takoma Park articles: Fox: https://www.foxnews.com/us/liberal-maryland-enclave-seeks-to-ban-fossil-fuels-as-part-of-sweeping-climate-plan Washington Post: https://www.washingtonpost.com/local/md-politics/takoma-park-fossil-fuel-ban/2020/02/20/307f7c44-5341-11ea-929a-64efa7482a77_story.html
Toggle Commented Mar 5, 2020 on Discussion Paper for Friday at Jolly Green General
In this paper, Casey and Schuhmann conclude that tourists in Belize’s WTP is just over $30USD, thus could be raised from the current $20USD exit fee. Through research I found that this amount applies only to travelers leaving Belize via crossing to Guatemala or Mexico (terrestrial or marine). This $20USD exit fee is equal to $40BZD. Of this fee $2.50BZD is for border development, $7.50BZD is for conservation efforts, and $30BZD is defined simply as being a departure tax. Those that exit Belize via air from the Philip Goldson International Airport incur a different tax. Belize citizens and permanent residents pay a $35BZD exit fee, and non-citizens/non-residents pay a $55.50USD fee ($111.88BZD). I think it is interesting that this study did not consider the differences in the tax for those exiting via airplane. But, furthermore, I find it interesting that in my research I was not able to find a breakdown of how the exit fee via airplane was spent by the government of Belize. But noting that the exit fee is higher for those who travel by airplane, I wonder if the WTP for those who travel by plane is higher. One potential reason I propose that this value is able to be higher is that, those traveling by plane are likely spending more money on a vacation which likely translates to having a higher income, thus higher ability to pay, thus higher WTP. Another potential reason that an exit fee via air travel is able to be higher is that it often gets buried in the cost of the plane ticket. Thus, people may not see the tax as an additional cost taking their money, like they may see the other exit fee (which must be paid in cash) and be willing to pay more. This could be in part due to the fact that people tend to value cash more since it has physical form and departing with something physical tends to be more difficult than spending money electronically via credit card. Another reason might be because the exit fee for those traveling via airplane is tacked onto the airfare cost and thus people don’t view it as a separate entity taking their money, but rather as part of the cost of the good. I think that future research on how making a conservation tax associated with other goods, for instance adding a tax for conservation to a hotel bill for each night stayed at the hotel, and how that affects tourism and WTP could be a crucial part to raising more money for underfunded conservation efforts in Belize and elsewhere. Furthermore, it would be interesting to see if for example, the tax would be able to be higher at higher end resorts thus allowing for some price discrimination. Departure fees info: https://www.belizeadventure.ca/travel-tips/departure-tax/ https://belizefuntours.com/belize-departure-tax/