THIS is the currently latest version of the previously entitled paper `An Aggregation Dilemma’. I thank especially Reyer Gerlagh, Humberto Llavador and Gwenaël Piaser for extensive discussions and comments.

Abstract
The results in this paper show that a policy maker who ignores regional data and instead relies on aggregated integrated assessment models will strongly underestimate the carbon price and thus the required climate policy. Using a stylized theoretical model we show that, under the mild and widely-accepted assumptions of asymmetric climate change impacts and declining marginal utility, an Aggregation Dilemma may arise that dwarfs most other policy-relevant aspects in the  climate change cost-benefit analysis. Estimates based on the RICE model (Nordhaus and Boyer 2000) suggest that aggregation leads to around 26% higher total world emissions than those from a regional model. The backstop energy use would be zero in aggregated versions of the model, while it is roughly 1.3% of Gross World Product in the regionally-disaggregated models.
Though the policy recommendations from fully aggregated models like the DICE model are always used as a benchmark for policy making, the results here suggest that this should be done with the reservations raised by the Aggregation Dilemma in mind.

For anyone interested, please feel free to comment.

A recent article on Project Syndicate, entitled “The Unsustainability of Organic Farming“, by Henry I. Miller and Richard Cornett, has rightly seen quite some traffic. In that article the authors warn about the dangers of organic farming, in particularly forwarding the following points:

  1. The use of compost instead of fertilizers in organic farming may lead to groundwater contamination (via nitrates) and generates significant greenhouse gases.
  2. Organic farming has lower yield levels than conventional farming (20%-50%) and consequently may lead to higher stress on e.g. soils.
  3. And now I quote for simplicity: “Organic practices afford limited pesticide options, create difficulties in meeting peak fertilizer demand, and rule out access to genetically engineered varieties.”
  4. “Another limitation of organic production is that it works against the best approach to enhancing soil quality.”

Some quick comments are in line here I think.

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In a recent article on Project Syndicate entitled “Carbon Majors and Climate Justice“, Naderev (Yeb) Saño and Julie-Anne Richards suggest that fossil-fuel entities should be taxed, envoking the polluter pays principle. They note that

It seems only fair and reasonable, therefore, that all fossil-fuel entities, but especially the carbon majors, pay a levy on each ton of coal, barrel of oil, or cubic meter of gas they produce to a new International Mechanism for Loss and Damage, which would help to fund efforts to address the worst effects of climate change. Furthermore, given that the effects of climate change today are the result of past emissions, the carbon majors should pay a historical levy, too.

According to the authors, the money raised should then be used for e.g. climate-vulnerable countries, or disaster preparation.

There are, however, four points that one may advance against this idea.

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ecolabel_logo

One topic I am particularly interested in is ecolabels, basically the labeling of products to ascertain their environmental standards. In this respect, the European Commission is now launching a Public Consultation on ecolabels entitled “Evaluation of the Implementation of the EU Eco-label Regulation”.

They question policy makers, stakeholders, producers and consumers about their views on the EU Ecolabel. I urge everyone to reply to their survey, which you can do via this link: http://www.survey-ecolabel.eu/cms/. It should take roughly 5 minutes to reply. This is your opportunity to help shape legislation in Europe.

One of the more interesting questions in the survey was this: “Is it beneficial to have a set of common requirements in the pursuit for a single market for green products across Europe in the form of the EU Ecolabel?”

Clearly, one issue with the whole ecolabel business right now is the huge diversity of ecolabels and the differences in their requirements. They increase the uncertainty of the consumer and at the same time help producers to sell their products by apparently attaching an ecolabel to them but with potentially very weak requirements. This is, however, simply weakening ecolabels altogether. Given the range of products and labels available, policy makers cannot expect consumers to take the significant amount of time needed to study the various ecolabels that are out there. Thus, it is reasonable to expect that consumers, faced with this uncertainty, may simply turn to pricing decisions again since the ecolabel loses its product differentiation character. Hence, standards/regulations should be applied uniformly.

Interested readers in cars and ecolabeling can take a look HERE, those interested in ecolabeling more generally can look HERE (in German). Those interested in some academic work on ecolabels can look HERE.

 

My article entitled “An Empirical Study of the Determinants of Green Party Voting” is now forthcoming in the journal Ecological Economics. In this article I show the following:

I empirically study the determinants of individuals’ green voting behavior. For this I make use of three datasets from Germany, a panel dataset and two cross-sectional datasets. The empirically strongest determinants are the voters’ attitude or distance to nuclear sites, the level of schooling and net income. I show that those voters with deviant attitudes or alternative world views are more likely to vote green, a result of the fact that the green party has always had the position of a protest party. I nd little role for demographic variables like gender, marital status or the number of children. This is in contrast to the stated preference literature. Age plays a role for explaining voting behavior only insofar
as it proxies for health.

You can find the version that is forthcoming HERE.

I just received this: Apparently the left wing party in Saarland, Germany, wants to know whether fewer girls are being born around nuclear power plants. Scientifically, there seems to be some evidence that the X-Chromosome gets destroyed quite easily even at already low levels of radiation. The politician who demands this is called Ensch-Engel, and he basically said that (liberally translated): „Because of the closeness to the nuclear power plant Cattenom, it is possible that the gender distribution in Saarland may be subject to alarming changes.“

I live in Luxembourg, which is as close to Cattenom as the German region Saarland, and oddly more girls have been born in my group of friends than boys. Clearly, this is unlikely to be a representative sample, but a quick analysis of the children below one year living in the German regions around Cattenom is enlightening. I find it surprising that a politician cannot do this himself, it took me like 10 minutes. In any case, here are the results.

Basically, in the whole of Germany, 51.27% of children below one year are boys. In Saarland, respectively Merzig-Wadern or Saarlouis, the German regions closest to Cattenom, this number is 51.82, 51.57 and 52.08. Now, I would not call these numbers alarming, but they are marginally higher. If we take a 99% confidence interval of all regions in Germany, then this amounts from 51.05 to 51.5. Each of the regions with close proximity to Cattenom is above this confidence interval, which basically means that, statistically speaking, it is likely that fewer girls are born close to Cattenom.

As a disclaimer, this number is very small. In addition, it could still be due to other statistical irregularities or effects.

Still, a quick check with google shows that this is apparently not only the case around Cattenom, but also across many different regions that are close to nuclear power plants in various countries, see e.g. HERE.  While I would really advice noone to call this difference alarming in any sense, the worrying question is still: Assume radiation reduces the number of girls being born. Then this means that the radiation, despite it being more than 50km away from nuclear plants and being thus really minuscule, still has an impact on our DNA. I would call this the worrying issue! Who knows what else it then may impact…

Persons below 1 year (source: Regionalstatistik Germany)
Total Percent
Total boys girls boys girls
Germany 663026 339973 323053 51.2760 48.7240
Saarland 7062 3660 3402 51.8267 48.1733
Merzig-Wadern, Landkreis 795 410 385 51.5723 48.4277
Saarlouis, Landkreis 1390 724 666 52.0863 47.9137
boys girls
99% Confidence upper 51.5048 48.9528
Interval lower 51.0472 48.4952
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