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Jacob Strauss
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What I found most interesting about this paper is the debate over whether a double dividend exists for a carbon tax. The passage of a carbon tax in British Columbia provides some evidence of how a carbon tax may affect the US, especially states on the west coast. https://nicholasinstitute.duke.edu/sites/default/files/publications/ni_wp_15-04_full.pdf The above paper dives into more nuanced issues with the British Columbia carbon tax. Emissions have gone down, but one concern is whether there have been "leakages"- have emissions increased elsewhere in Canada due to the tax? Obviously a countrywide carbon tax solves this issue at the domestic level, but a large corporation would have the means to simple move factories out of the country to a place where emissions are not taxed. With regards to climate change, it doesn't matter where the emissions are coming from. http://www.economist.com/node/21610340/comments#comments This article from the economists covers the issues more succinctly, and interestingly they point out that public opinion has changed to support the tax since implementation, and that there is no concrete evidence of a negative impact on jobs.
Toggle Commented Mar 30, 2016 on ECON 255 for next Thursday at Jolly Green General
I found the commentary in the Harvard article on whether certain forms of alternative energy are scalable to be particularly interesting. Often it seems that proponents of green energy back a certain type- boasting that wind or solar is the solution to the problem. To hear instead that it has to be a combination of all of them to solve our was much different than what I hear in the public sphere or what government officials say in my home state of Montana about wind power replacing coal. The goal to stabilize at 550 ppm was sobering to say the least, and their fears of not being able to meet that goal were not reassuring. When they discuss replacing coal it seems worthwhile to point out as we've covered in class that coal is not actually that much cheaper than other forms of energy- we just don't pay the full price when we pay our electric bill each month. From my time in China, it doesn't seem like people are too keen on raising electricity prices to slow coal consumption. Many people told me the pollution was worth it due to the economic gains and improvement in standard of living (outside of environmental quality..).
Toggle Commented Mar 17, 2016 on ECON 255 for next Thursday at Jolly Green General
One aspect that stuck out to me was the commentary on jobs and subsidies. Obviously the coal interests are quite strong in DC and each time a discussion of environmental regulations arises or people propose cutting back on coal subsidies the response is always that any action that hurts the coal industry will cost too many jobs. The authors point out that jobs have already declined dramatically do to technological improvements, which means many of the existing jobs won't be available to someone without a decent education in the first place. A quick google search on the issue brings up an example from Pennsylvania where the coal industry claimed they created 250,000 jobs in the state, but research from Pennsylvania's Department of Labor showed total job creation at under 30,000. The type of analysis in this paper is needed for state's to fully understand what the benefits are from the coal industry and what the costs are. Kentucky is losing money without even fully considering the environmental and health costs of the industry. I also thought their comment that they were unable to measure all environmental costs and health costs, particularly to mental health, so that their total figures were likely an underestimate. If we're losing species in Appalachia at a rate so fast we don't even have an opportunity to discover all of them, how exactly could anyone quantify that loss? I am pessimistic that we will ever pass regulations to ensure we pay the true social cost of coal when we consume electricity, but ideally analysis like this moves us in the right direction.
Toggle Commented Mar 9, 2016 on ECON 255 for Thursday at Jolly Green General
Clearly the overall outlook established in this article is not optimistic, but one statement that particularly stuck out to me was when they stated "a recent survey found that only two of the Financial Times Stock Exchange (FTSE) 100 companies recognize biodiversity to be of strategic importance to their business." Three years ago I was part of W&L's spring term abroad course to Denmark which focuses on Corporate Social Responsibility (CSR), and corporations typically include environmental protection as part of their CSR priorities. It appears then that biodiversity has received much less attention than other environmental protection goals, but perhaps a corporation is going to be more willing to limit pollution than limit its activities that cause habitat conversation. Since this article is from 2010, I looked to see if there has been any recent change in focus in CSR to include biodiversity, but the only literature survey I could find on it was from the Netherlands (http://www.ccsenet.org/journal/index.php/jsd/article/download/28656/17470). It indicates that while biodiversity is starting to garner increased attention from corporations, it still remains "difficult" and "intangible" for corporations. Corporations can reach benchmarks for pollution reduction or for producing their products in an environmentally friendly way, and given that these things are easier to quantify and qualify, they can put third-party labels on their products that increase their appeal to consumers. There are also national awards for corporations that dramatically reduce pollution or limit waste. It would seem that given that biodiversity is more intangible there isn't an equivalent rating system or benchmark for biodiversity protection, which could make corporations less willing to focus on it. Even if they label their CSR efforts as entirely altruistic, they tend to respond to incentives for what they focus on. Unfortunately, US companies tend to lag far behind European companies in terms of environmental protection as a component of CSR, which means that US firms likely still consider biodiversity even less of a strategic priority than their counterparts in the Netherlands.
Toggle Commented Mar 2, 2016 on ECON 255 for Thursday at Jolly Green General
I was relatively unfamiliar with NMV techniques before taking this class, but this paper clearly demonstrates the usefulness of it. My home state of Montana generates much of its GDP through tourism, and as a result the protection and valuation of natural resources is an ongoing debate. Montana Fish, Wildlife, and Parks (MFWP) has been a backer of NMV for some time now, and these methods are frequently used in regards to the conservation of fisheries across the state. In addition, the reintroduction of wolves to much of the state has brought NMV more into the public view because it's a contentious issue at home. Valuing how much the general public is willing to pay for the protection of wolves is important considering they pose a threat to ranchers across the state. This paper's empirical example of NMV illustrates the value this technique has in other areas of environmental conservation.
Toggle Commented Feb 3, 2016 on ECON 255 for next Thursday at Jolly Green General
As many people have mentioned, China's family planning policies are what come to mind while reading the "Tragedy of the Commons." While the policies were typically viewed as a human rights violation in the Western world, they retained a high popularity rate in China until the end, and in my own anecdotal experience it was difficult to find someone from the cities that opposed it. However, evidence from developing countries in South America and Africa shows that economic development and investments in education are viable methods for controlling population growth, and China would have seen a decrease in population growth without implementing the restrictions. In addition, the policies failed to prevent widespread environment damage, and China will struggle with conservation and rebuilding habitats for decades. To combine both articles, it would seem investments in education and environmental protection would be able to go some way in accomplishing what each author is advocating for, but it's difficult to tell exactly how much of a difference it will make down the road. Residents of developing countries will value a higher standard of living and income over less pollution, and the US doesn't have any room to criticize with an extremely high per capita rate of emissions.
Toggle Commented Jan 21, 2016 on ECON 255 for Friday at Jolly Green General
As we have covered in class, any meaningful reduction in emissions must come from cooperation between the US and China and large scale commitment, and that goal doesn't seem like an easy one to attain. With Senator Inhofe as the likely chair of the EPW Committee it seems unlikely that the government will be able to pass any meaningful change, and it is also possible that with this position he can gut much of the recent EPA regulations. Based on my time in China, the situation doesn't seem much better. My Chinese classmates and teachers were all aware of the pollution because they lived in it, but they regularly stated that the environment was not a large concern to them. They wanted the pollution to decrease a bit, but not at any expense to economic growth. They still live with the previous generation's stories of hardship which means climate change (especially when the media has little discussion of it) isn't exactly on the radar. The recent agreement between the US and China does provide some hope, though. While it isn't a significant reduction or a huge commitment, it is still a step in the right direction. Perhaps more importantly, it could make future unilateral action by the US more feasible because one of the biggest arguments against it is China's unwillingness to reduce emissions.
I found that portions of the second paper relates strongly to papers covered previously this term, notably Rodrik's piece on growth strategies and the Washington consensus. Eichenberg and Fishlow in 1996 wrote that "the fiscal balance of Latin America as a whole swung from a deficit of three per cent of GDP in 1989 to a surplus of one per cent in 1993" and explained that there were shifts towards exports and privatization in these countries. Analysts at the time pointed out that domestic reforms brought capital into the Latin America and thus accounted for change in capital outflows, which is similar to what followers of the Washington consensus may claim occurs after privatization of state-run businesses. Of course, capital flowed into these countries regardless of whether they had undergone significant domestic reform, and this illustrates once again that when explaining growth/development one has to account for a wide variety of factors and be careful with a one size fits all approach. Moving on, I found it thought provoking that the role of interest rates in the US has such a large impact on capital flows to developing nation. With the current debate on whether to raise interest rates to stop the inflation monster that's supposedly just around the corner, it is worthwhile to take a look at how these decisions affect development around the world. If policymakers are sincere about triggering growth in developing countries than the growth consequences of these decisions should be evaluated as critically as those policies designed specifically to create growth in other countries.
I'm a bit late to the party so it seems essentially everything I have thought about writing has already been posted by my classmates. I did a little extra reading about agroforestry to become more familiar with it and how it works since this is the first time I have heard of it, and from what I found in other studies it seems the investment in human capital is empirically shown in multiple areas to be effective. Communities often have a demonstrative plot that can be used to prove to other farmers how the process benefits crop production and in that manner they become effectively educated. These empirical findings support the effect of human capital on the solow growth model that we have discussed in class. In addition, I found this article stating that the AfDB is increasing investment in arogforestry in Africa by 10 million Euros http://forests-l.iisd.org/news/afdb-approves-10-million-euro-investment-in-agroforestry/. Casey's paper does not discuss the up front costs of this process but they would seem to be negligible (seeds and labor?), so I wonder if the investment is predominately for educating farmers on how the process works and less about paying for the inputs needed.
Toggle Commented Nov 6, 2014 on Econ 280 for Thursday at Jolly Green General
The introduction of the Nobel Prize lecture by Schultz and Lewis reminded me of a sentiment that I have heard many times in conversations with low-income high school classmates and students in China, which is that "it is expensive to be poor." The behavior of the poor can be difficult to understand for the rich, as the lecture points out, and it can be easy to see that saving money can be virtually impossible when you live month to month. The chapter on coordination behavior also rationalized their actions by making the point that their behavior isn't irrational because of the way everyone else acts, and it will continue to be rational as long as everyone acts the same way. It seems that the points the lecture makes about the value of human capital are directly related to the consequences of malaria examined in the first article. As malaria continues to kill millions each year and weaken even more the overall human capital of these areas becomes worse, and the prospects for investment and improvement are low. It would be easy to see in a model that capital investments by the government will do little to improve the economy or ignite growth when human capital is low, and this is exactly what the article explains through examples like Mozambique.
Toggle Commented Oct 29, 2014 on Econ 280 for Thursday at Jolly Green General
The paper states that child labor is "overwhelmingly a rural and agricultural phenomenon" and that the majority of child laborers are in Asia, which doesn't quite fit with the typical image we might think of, such as a child laborer in an Asian country. Indeed, the paper never mentions factories or sweatshops and does not list the number of children engaged in agricultural labor as opposed to industrial labor, which is most commonly associated with South and South East Asia. Furthermore, the solutions to the problem listed at the end of the paper (subsidies or other methods to encourage kids to attend school) would not work for children engaged in industrial labor. An agricultural job can be done on a day-to-day basis depending on when labor is needed or extra wages are needed, but an industrial position in a factory or sweatshop requires long term commitment, especially in China. I would postulate that schooling is essentially nonexistent for Chinese children employed in factories producing goods for your local wal-mart, and I wonder what the solution to that problem is because incentives based on education would not work in China. Recent articles on factory collapses in Bangladesh and India also show child labor is a wide spread problem in the manufacturing sector. Child labor is banned in most of these countries but the laws aren't enforced because of apathy, bribes, etc. It's encouraging to see there are solutions for child labor in the agricultural sector, but the consequences to the child working in the sweatshop are typically greater in terms of health and education, and I am disappointed the paper never discussed those aspects. It may be a less widespread phenomenon, but it also seems to be the more difficult one to fix.
Toggle Commented Oct 22, 2014 on 280 Paper for Thursday at Jolly Green General
In the fall of last year I read this for a make-up session of Casey's macroeconomics class, and before opening the document to read it again I recalled a few things from last year: that it isn't a paper about Albert Hirschman, the story about the mapping of Africa, and the example of the simple climate model. I'm not sure if these are the points Krugman would want to stick, but in those two stories the pros and cons of modeling are summed up rather nicely. My classmates above have all discussed already how classroom models too often oversimplify the real world, but undergraduate econ models are still capable of illustrating many real world situations, such as why we haven't seen crowding out despite high government spending. I agree with Andrew's post above that it would be enlightening to see if the "fall" of HDT affected the developing world, or if the the loss of of support among economists was accompanied with a parallel loss of support among policy makers. It seems often that what has widespread support among economists doesn't have much support among policy makers anyway, so it is possible it didn't have any pronounced effects on developing countries.
This paper coupled with Heeju's and Juan's posts reminded me of several of the discussions I have had in international politics courses at W&L concerning poorer countries and IMF development strategies. States such as Jamaica have been forced to rely on loans from the IMF in the past to avoid default, but the strings attached to the money often force them to develop along a Washington consensus model. However, it has been shown in many areas (as Juan points out) that this paradigm doesn't work in many developing countries for a wide range of reasons, such as the lack of a strong domestic market and inability to compete with companies in developed companies. These measures can lead to a cycle in which countries are forced to request further loans and in return more austerity measures are applied. Rodrik makes the point that the strategies that work in one area (china, taiwan) usually won't work in another which explains the struggles of the IMF to create growth, and this relates to last week's discussion on how we need to avoid looking for patterns where none exists. When I was in China we often discussed the Reform and Opening of 1978, and my teachers all made the point that China had started "walking on the road of capitalism, but it will always be with Chinese characteristics." The emphasis on the unique strategy of the Chinese can be said for any successful growth story, as each paradigm must adapt to the culture and foundations of the country it is being applied to, not the other way around.
Toggle Commented Oct 1, 2014 on ECON 280 Paper at Jolly Green General
We often hear that increasing the amount of control the female has in the household has a long list of benefits, both education and nutritional, for the children in the family. This paper supports that, however it provides the interesting caveat (which I have never heard before) that at a certain point additional female power will create negative effects. For example, Basu (2006) shows that too much female power will cause the girls' enrollment to decrease. It seems to suggest that there is a tipping point within the power structure of the family and that the amount of funds the female is supplied in the RPS program should be carefully decided at the margins. However, female-led households are still more likely to have better enrollment in schools than male-led households, which could mean even when the negative effects begin of too much female power the family is still better off than it was before. I agree with Austin that the program won't change the situation in one generation and that it isn't intended to. Even if a family is less educated than its neighbors RPS can still help their children become better educated and close the gap between them. I would also assume that in this case the program directors are more likely to be concerned about closing the gap between the impoverished and the upper classes, rather than the gaps between the slightly educated poor and the uneducated poor.
Toggle Commented Sep 24, 2014 on ECON 280 paper #1 at Jolly Green General
This article reminded me of many of the experiences I had while teaching in China. Certainly the village I was in wasn't in the absolute poverty analyzed in this article, but the situation there would still be unfathomable for most Americans. I don't want to overstate my experiences there because I feel Americans do that too often when visiting poor places, but the article did bring to mind several aspects of life there. During the day the villagers would lounge around, especially those that just sold food in the mornings, and at times it appeared that they were being lazy, though I don't understand their circumstances. In the same manner as the authors of the paper, I wondered why they didn't work other jobs to save money or why they spent a lot of time lounging around during the day. They also consumed copious amounts of alcohol and cigarettes, to the point that it made conversing with them difficult because of the amount of smoke in the air. One man I spoke to frequently had little to no money but still smoke in excess of 70 cigarettes a day, so I found the discovery of the authors that the poor spend a large fraction of their funds on alcohol and tobacco to be unsurprising, though still irrational. In my experience the data showing the poor spend a lot of entertainment even when they were lacking in nutrition to be true in this village as well; people would often have a tv even if they or their children would not be guaranteed three meals a day. I found this practice to be illogical and frustrating, specifically buying a TV when your kid may not get dinner, but it is unfair to judge them when I have never had similar experiences. Finally, in Beijing the migrants from the countryside I spoke to often longingly recalled the relaxed lifestyle of the poor villages. They had all left in search of jobs and a better life for their kids, and their children were surely receiving a better education in Beijing than they ever would in a village. However my experiences and this article both seem to illustrate a habit of many poor to not work the entire day. This would be impossible in a job in the city, and I find it very puzzling that this is widespread. Perhaps lack of food is one reason, or just the realization that working thee entire day wouldn't improve their lot in life anyway.
Toggle Commented Sep 18, 2014 on 280 reading for Thursday at Jolly Green General
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Sep 17, 2014