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Last blog post ever! In the theme of our ongoing banter about 'it depends', I will start there. The previous literature on aid and poverty can be grouped into "it works; it doesn't; it can, but it depends". How can there be such divergent conclusions? Well, it depends on how/what the researchers are measuring. When asking my roommate the question 'does aid reduce poverty' (she has studied this question before), her answer was "no, it does not help". And that may be true…when we are solely looking at economic growth. The standard relationship between aid and income poverty is not statistically significant. We must look beyond this traditional relationship into alternative measures to give us a more holistic view on measuring poverty. The MPI looks beyond money to include education, health, and quality of life. These conclusions make me question why it is not the standard to use MPI in policy decisions, even outside the realm of aid. Shouldn't we want to have a broader understanding of policy implications beyond just money?
Toggle Commented Nov 12, 2020 on Last Post of the Year at Jolly Green General
I was not able to grasp the majority of this article, even upon 2 reads. Hopefully our class tomorrow will clear things up. From what I understand, previous studies have suffered from not seeing the whole picture of supply and demand. Both price of the bonds and the volume/composition of international lending are impacted by US interest rates. As such, higher US yields negatively impact the demand for international bonds. It is wild how truly interconnected our global economy is… how the economic state of our country influences the flow of financial capital to another developing country. If we refuse to do anything else to aid in the development of foreign countries, let us just keep our treasury yields low. Rates are historically low at the moment- how are international investors behaving as a result? I wonder what the authors would be saying in an updated 2020 version of this research.
Toggle Commented Nov 5, 2020 on For Friday's Discussion at Jolly Green General
A question I have frequently found myself asking throughout sustainable development, environmental econ, and this class is "Okay, but how?". We learn about the need for certain things (education, decrease emissions, health, whatever it may be) but I often follow this up with "how are we going to get there?". This study was great to read because it showed how we can get there- an intervention that has direct effects on educational, labor market, household, and demographic outcomes. It's funny how money can so strongly influence behavior. While obviously the issues of sending your child to school vs wearing a mask are entirely different, I wonder how much better off we would be if a Covid intervention was conditional cash transfer for mask wearing. I bet a lot better. Like Ben, I was also amused by the fact that all monetary grants were given to the mother of the family- this isn't the first time we have seen this happen in this class. Ben asked "Are women inherently more financially responsible than men?". Obviously we can't answer that question definitively, but I do think that women have a more long term mentality towards the betterment of their lives and their children's' lives.
Toggle Commented Oct 29, 2020 on For Friday's Discussion at Jolly Green General
This article was a nice summary of many of the topics we have been discussing. Education is a powerful catalyst for development, especially in developing countries. In Blunch's 'health economics in developing countries' class, I did a case study on Sri Lanka. Education is a top priority for the Sri Lankan government. A universal education policy is written in Sri Lanka’s constitution, assuring all persons aged 5 to 16 the right to free education. Since the policy’s adoption in 1948, Sri Lanka has made great strides in the realm of education. Sri Lanka is one of the few developing countries that boasts gender parity in the education sector. The literacy rate in Sri Lanka has reached 92%, which is not only high in comparison to other developing countries, but also to other countries in South Asia. Sri Lanka’s high rate of literacy, in turn, is beneficial for effective understanding of health education. In this manner, more students can be exposed to learning about health risks and the practices of self-care and disease prevention. Like we have been saying in class, there are a myriad of positive spill over effects with these investments. Health and education are mutually reinforcing…investing in education leads to better health outcomes and vice versa, as we learned from Schultz. However, the education system in Sri Lanka is not without problems. Although free, some families (more commonly poor) choose not to send their children to school at all. This is why there must be incentives in place, such as conditional cash transfers, to make the universal education policy effective. I loved the line in the discussion-- "In the United States the long-term 1966 to 2015 average return on stocks and bonds is 2.4 percent (Damodaran 2016) versus a 10.5 percent overall private return to investment in education in our database for education." Funny how Wall Street investors continues to not understand this.
Toggle Commented Oct 22, 2020 on For Friday's Discussion at Jolly Green General
As we spoke about last class, we should not wait for GDP to rise to focus on women's agency because agency is an ends in of itself. Women's agency enhances and accelerates economic growth. Yet, even if it precluded economic growth, the focus on agency should still be there because doing so is a focus on basic human rights. The most salient point from this article is that economic development alone will not be enough. Growth will not be enough to overcome discrimination in a number of domains, including lower wages. Gender pay disparities extend into both developed and developing countries. For example, while at varying levels of development, the US and Ghana both suffer from similar wage gap problems. From my econometrics project, gender stereotypes and gender specific roles are prevalent in Ghana, thereby men and women with equal education attainment do not receive equal payment. There is a decrease of 43.48 PPP dollars per week for females in comparison to their male counterparts in Ghana. A significant wage gap exists and a glass ceiling effect for women persists, which ultimately implies the potential for social welfare benefit from government intervention. These interventions that favor women are better for everyone in the long run, which is important to recognize. A long run mentality is necessary to the sustainability of development.
Toggle Commented Oct 9, 2020 on Duflo for Friday at Jolly Green General
We need to make individual self-interest coincide with social interest. The societal benefits of intervening in education and education policy far outweigh the costs. As such, public investment in education is seemingly obvious. Economic theory suggests that education is one of the basic foundations of development that set the stage for universal economic growth. We saw this in South Korea. We can also see this in Sri Lanka, which boasts some of the best educational outcomes among developing countries. The benefits of education are linked to other factors in development as well, such as health outcomes. Higher education levels correlating with better health outcomes is a generally accepted and observed global phenomenon. In Sri Lanka, education influences health outcomes for the country so much so that one the most effective investments in health is to improve education. If all of this is known and proven… why can we not move forward on these investments? How can we continue along a path that knowingly benefits some while hurting those most vulnerable along the way? Crazy stuff!
Toggle Commented Oct 2, 2020 on For Friday's Discussion at Jolly Green General
In the piece 'We can end world poverty without destroying the plant', Quigggins argues that the ultimate barrier to achieving a good life for all lies in our beliefs, values, and social institutions. The problem is not 'Can we?' but 'Will we?'. Maybe I'm just a pessimist, but I think the answer to the latter question is no (at least not before proper incentives are established). Quiggins writes that once the car fleet meets the standard of 54.5 mpg, there will be massive fuel savings. But…people are in love with their low mileage pick-up trucks and will likely not go down without a fight. In London, there are low emission zones where you can only drive your car through the city if it meets a certain fuel efficiency standard. Otherwise, there are massive fines. The only way to get the car fleet standard higher is to establish strong policy incentives like this. As time ticks on, climate change impacts will make these barriers harder and harder to overcome, as outlined in the World Bank report. Our values and beliefs will not change overnight. Given that, we need immediate and meaningful policy action to drive our values and beliefs in the direction needed.
Toggle Commented Sep 24, 2020 on Readings for Friday at Jolly Green General
The story and path of South Korea's development achievement is long. One might say that South Korea's success can be attributed to the historical circumstances- development during a time of little export-led competition, its proximity to Japan during its production movement to low cost countries, the openness of the US market, etc., etc. One might say it was the US aid and troop presence that assured foreign investors. It might be South Korea's 'Confucian Ethos', a combination of hard work, discipline, respect for learning, frugality, the importance of family, and delayed gratification. South Korea's success was probably a mix of all of these. As we have learned from Ostrom and throughout this class, there is no cookbook formula for development. From the Growth Strategies reading, we have learned that attempts to emulate successful policies elsewhere often fail. While many of the steps in South Korea's development can be seen as an example, other countries looking to develop need to look within to write their own development story.
Toggle Commented Sep 16, 2020 on Miracle on the Han for Friday at Jolly Green General
My favorite line in this article is "models are maps rather than reality". In every class I have had with Professor Casey, this concept is consistently emphasized. Especially in ECON 100, we are taught to believe these textbook models as facts, instead of merely a starting point to understanding a more complex story. Most of our classes are not spent modeling, but rather discussing how assumptions/behaviors may differ from the model. We are taught to approach scenarios with a healthy dose of skepticism… often, the answer is 'it depends'. As this article notes, development theory was halted for a period of time due to the lack of modeling capabilities for economies of scale. Delays are likely happening to this day. There are important aspects of development that have no formal model. Are we currently delaying development in other countries because we do not yet have a model that incorporates Sen's capabilities?
Toggle Commented Sep 10, 2020 on Krugman for Friday at Jolly Green General
This study focuses on development in the sense of the key institutional barriers driving or hindering economic development via income disparities. In contrast, Sen argues that development is the expansion of the freedoms that people enjoy. Freedom is the ultimate end and primary means of development. As an end, we have freedom through the avoidance of starvation and premature mortality, and political and market participation. The means of rights/opportunities/entitlements that expand human freedom include political freedom, economic facilities, social opportunities, transparency guarantees, and protective security. None of the above aligns with the development-enhancing factors outlined in the study. The two contrasting pieces must have fundamentally different ideas of what development means and looks like. Sen's version concentrates on individuals and the freedoms they enjoy, while this study focuses on the institutions, policies, incentives, infrastructure, etc. Does industrialization, exports, and IT truly make a country "developed"? I don't think it does. Similar to Sen, I think development needs to be rooted in a capability/freedom approach (health, education, living standards, as well as income). Development is not merely sustained economic growth.
Toggle Commented Sep 3, 2020 on Reading for next Friday at Jolly Green General
Sach's argument on the private sector aligned with an article I read in Sustainability Accounting, Morality, Money, and Motor Cars (Bowie 1990). Bowie argues that businesses do not have the obligation to protect the environment over and above what is required by law. Instead, Bowie says business will respond to the market, so it is the consuming public that has the obligation to make the trade-off between cost and environmental integrity. In contrast, Sachs claims that the private sector is crucial to the success of the SDGs because of 1- its far reach and 2- its access to technology/management systems. Since the private sector has the tools, the knowledge, and the ability, are they or are they not morally obligated to act through their policies, production processes, and stakeholder engagement? In my opinion, businesses should act above what is required by law. Some companies, like Walmart, have more power than most countries. For our sustainability goals to be reached, companies need to do more than the minimum required by current legislation. Additionally, Sachs clearly states that the private sector should avoid political activities that might endanger the SDGs. Bowie agrees with this stance, arguing that businesses have a moral obligation to avoid intervening in the political arena. Traditionally, the government corrects for market failures. Businesses claim to support this, but they simultaneously use their influence/wealth to defeat or weaken environmental regulation. Big oil companies like Exxon, BP, etc. as well as electric companies like General Electric are known to be influential on government policy. How can businesses truly respond to the market when they have significant hold on the government? For the SDGs to be successful, the private sector needs to exit the political sphere.
Throughout my past 3 years taking environmental studies courses, I frequently found myself thinking “okay... so why aren’t we doing anything about it?” Whether it was why aren’t we doing anything about mitigating the effects of climate change? Why aren’t we doing anything with the proven potential of a carbon tax? Why aren’t we doing anything about the distributional injustices of climate change impacts? (And by “we”, I mean the general public/government. There are, of course, select individuals/groups that are doing remarkable things on the climate change front.) This class helped me answer that ‘why’ question. The why boils down to ignorance, ideology, and interests. The promising thing is that albeit influential, these 3 i’s are not permanent. We have the tangible solutions/ideas for many environmental challenges. Once we can decrease the world’s ignorance, and align its ideology and interests, we can accomplish seemingly insurmountable feats. I will carry this lesson lesson forward by being cognizant of my own ignorance, ideology, and interests when faced with situations and decisions.
Toggle Commented Apr 22, 2020 on ECON 255 Final Exam at Jolly Green General
Stress is a powerful emotion, and as the article points out, is often accompanied by a fight or flight response. Last year, my neighbor was talking about how climate change isn’t real, the climate has “changed before”, scientists are in it for the money, namely every myth in the book… Having just taken Professor Greer’s climate change class, I was equipped to present the science to take down any of those ‘arguments’. Yet, almost everything I said was met with aggressive incoherent yelling (the ‘fight’ response). This flight or fight response is holding people back from truly understanding climate change. Approaching conservation by connecting it with cognitive benefits of nature will align the values of humans and nature. People may perceive human values to directly conflict with those of nature, but this does not have to be the case. Having a personal connection with nature, like the veteran surfer, gives one a new found value for the natural world. As with the surfer, I have a similar sense peace when in nature. When I find myself frustrated with athletic performance/in a slump, all it takes is a run in back campus to get straightened out again. There is this inexplicable feeling of going back there, surrounded by nothing but trees and the calm flow of the Maury. I am grateful for that. Conservation efforts will find meaning for all if more and more people find this similar sense of gratefulness.
Programs like The Solutions Project are essential to a transition to clean energy. The ‘grants’ section of the site reminded me of the research I did on Sub-Saharan Africa in Sustainable Development last spring term. Sub-Saharan Africa has the greatest potential for generation of solar and photovoltaic energy. Yet, SSA is facing widespread energy shortages and has the lowest energy generation capacity of any region. SSA struggles to reach their energy potential primarily due to a lack of funding. If more projects like this invest in SSA, energy potential can be reached and the returns on investment would be high! I read the article called “The Global Challenge of Decarbonization”. I was surprised to read that Kenya leads the world in clean energy use. Africa is the most vulnerable continent to climate change, with the majority of the population relying on the land for subsistence and economic activity. Africa is also the lowest contributor of global emissions, yet one of its countries leads the WORLD in clean energy use ahead of all the major emitters? From an equity stand point, this doesn't seem right to me. The article also notes that one of the most successful decarbonization projects among developed nations was in Sweden. In 1991, they were charging $110/ton of carbon. Now the carbon tax is up to $500/ton. Emissions have been reduced threefold since the 1970s, while median income in the country has doubled. This goes to show that decarbonizing the economy does not have to come at the cost of economic growth...
Just like Adam Smith’s invisible hand or Coase’s social cost arguments, AOC’s words are similarly distorted. Readers franticly label AOC as the nut-job who is trying to take away our hamburgers. People cling to these extreme examples derived from twisting the Green New Deal, and disregard the true meanings and implications of the policy. One of the perceived weaknesses of the Green New Deal is its lack of any concrete means or established plan in which to achieve its goals. However, Cortez was probably purposefully vague. While a single streamline solution to climate change would obviously be ideal, no such thing exists. Achieving the goals outlined in the Green New Deal will require a holistic and multifaceted approach (and some of the technologies involved in this approach may not have even been developed yet!)
Toggle Commented Apr 14, 2020 on ECON 255: The Green New Deal at Jolly Green General
We have the potential to renovate our current energy system to one that is far less dependent on fossil fuels. Both parties need to make energy policy a priority, and these articles make me hopeful that we are getting there. A carbon tax would incentivize people to reduce their emissions because it would equalize the private and social cost of emissions. The tax would allow people to maximize their well-being while simultaneously incentivizing a response of emission reduction from businesses and buyers. Professor Kahn said that the damage of a ton of carbon is estimated to be $50-100. Is it closer to $40? $230? On the lower end of that spectrum, the carbon tax would not result in a huge loss of spending power, but would nonetheless incentivize people to limit their carbon emissions. While we all know that science, not political ideology, should dictate one's 'belief' in climate change, we are getting closer to policy action from both sides of the political spectrum
Toggle Commented Apr 13, 2020 on The Case(es) for a Carbon Tax at Jolly Green General
There are very few things that are truly ‘felt’ globally. Climate change and coronavirus are 2 of these things. Climate change is the greatest environmental challenge facing our world today. Even if we cut all emissions tomorrow, we would still experience climate change effects. If global warming continues unchecked, these effects will certainly be worse. Luckily, there are tangible solutions that mitigate these harsh realities. We can do something about global warming, but we must collectively start now. In the same vein, coronavirus is one the greatest global health challenges. Even if everybody properly contains the spread tomorrow, deaths will still occur. Just like climate change, we have the tangible solutions that stop the spread of the virus. We must all take these actions collectively, though. As we have seen with climate change, when one or more involved parties do not comply, it is ruined for the rest of us.
Stern notes that climate change is a global problem, and solutions will require coordinated action for both rich and poor nations. In Sustainable Development, we talked about how poorer nations can take advantage of technological leapfrogging. In essence, this means that developed countries invest in the research and development, and the underdeveloped nations use this information for implementing new climate technologies. This technological coordinated action seems crucial in combatting climate change. Using the cigarette smoking example, Stern says we need to look beyond traditional economic incentives. Economics tells us that if the financial benefits are greater than the financial costs, people will act. Yet, behavioral economics says that we will break this cost-benefit Neoclassical economic principle if there are other incentives at play. These incentives include embarrassment, praise, approval of others, fairness, competitiveness, etc. I would like to think that eventually, if not already, these alternative incentives will impact climate change like they did with cigarette smoking.
This situation could be analyzed through a MAC/MDF model. EPA regulations get private behavior to act in society's best interest. Without these regulations in place, the private sector will slide down the MAC function so that pollution levels rise (at the farthest point to the right, the cost for pollution is nearly 0, while the damage is maximized) . With COVID-19/respiratory issues coming into play, the MDF would shift up, meaning the damages to society are even greater. https://www.cnbc.com/2020/03/30/tom-steyer-on-epa-limiting-environmental-laws-amid-coronavirus.html ^Here is another short article to contextualize the situation some more. I see both sides of the argument. On one hand, this move allows non-essential EPA employees and short staffed companies to not focus on routine sampling and record keeping. On the other hand, this move can exacerbate the problem of COVID-19. This could also be seen as a politically driven move to help businesses flourish, with little concern for the public health impacts.
A W&L alum who studied abroad in China in the fall term of 2017 said that pollution masks are just a part of daily life there. She ran on the treadmill everyday because the pollution outside was so bad. While she was aware of the physical health impacts of pollution, I am sure her, as well as most, are not as aware of the cognitive effects. Particulate matter not only has negative impacts on human health, but also affects Earth's climate. Climate change and air pollution are interlinked. As the 2nd article outlined, while there are natural causes of particulate matter (volcanic eruptions, tornadoes/hurricanes, forest fires, sea spray), man exacerbates the problem (vehicle exhaust, road dust, smokestacks). In Professor Greer's climate change class, we discussed particulate matter's impact on glaciers. The particulate matter falls onto the snow and lowers its albedo, which is the amount radiation reflected back from the surface. This makes sense because the white snow reflects radiation well, while the black particulate layer on the snow absorbs the heat. This heat absorption is causing the glaciers to melt at increasing rates. Since we are already seeing human health impacts, as well as climate impacts, it would seem as though policy action on air pollution would be more pressing than usual.
Toggle Commented Mar 13, 2020 on 3 short papers for Friday at Jolly Green General
Coal is cheap, reliable, and abundant in comparison to other energy sources. Coal advocates argue that coal is cheaper than proposed alternatives such as wind or solar. However, the social cost of coal is significantly greater than the amount on our electricity bill. Accounting for the true cost of coal throughout extraction, transportation, processing, and combustion actually makes coal one of the most expensive energy sources. While we are not physically seeing these higher costs on our bills, we are nonetheless bearing costs. It is as if the coal industry is heavily taxing the public (in the form of severe health consequences, property value loss, etc.) and the government/coal companies are turning a blind eye. The poor, unfortunately, disproportionately bear the brunt of these costs. In my opinion, if the adverse consequences of coal were distributed evenly across the nation (to the wealthy as well), change would have already occurred years ago.
Toggle Commented Mar 5, 2020 on Discussion Paper for Friday at Jolly Green General
Casey's study noted that a lack of funding (1), global climate change (2), and mangrove replacement with man-made capital (3) all contribute to the threat of Belize's marine ecosystem-- 1) Casey concluded that tourists are willing to pay significantly more than the current PACT entry/exit fee. 2) In Professor Kahn's Environmental Valuation class, we looked at a contingent valuation paper comparing citizens' willingness to pay for climate change mitigation in China and the US, the two largest greenhouse gas emitters. Ultimately, the researchers suggested that significant support exists for climate policy, and as such, their findings are a promising indicator of future climate policy success. In short, people are willing to pay for climate change policy. 3) In Kahn's class, we also looked at a choice modeling study for mangrove restoration in Belize. Among those surveyed, there were clear preferences towards near-term restoration. These studies all lead to similar conclusions; people want environmental quality and are willing to pay for it. I hope that governments start translating these conclusions into meaningful policy action.
In researching this paper a bit further, it seems as though Coase's words may have been distorted by readers in a manner similar to that of Adam Smith's "invisible hand". Many optimistically, and somewhat ignorantly, tend to remember that the 'magic' market will fix itself through bargaining with zero transaction costs. After citing (some of) Coase, people can argue that negotiation will lead to the most efficient allocation of resources, ultimately defending a decrease in regulation and a 'hands-off' government approach. Using this (flawed) logic, the issues of contemporary society (i.e. pollution) will be corrected by the free market. This interpretation game is dangerous and leads to confusion. Obviously, as Coase later points out, it is not realistic to have entities come together, with perfect information, and reach a consensus at zero cost. In the case of climate change policy, we have already seen how unrealistic these expectations are. It is momentous enough to have all major global parties attend a conference, nonetheless actually agree on something. Further, while there is a consensus that climate change is and will continue to negatively impact the world, we do not yet know the extent of the damage. Since climate change is a global and complicated dispute, the government 'super firm' regulating and/or taxing seems to be the ideal option.
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Jan 16, 2020