Maximilian Auffhammer is one researcher who tends to have very insightful and challenging posts. In one of his latest posts he discusses recent empirical evidence on whether or not building codes improve the energy efficiency of a house: http://wp.me/p2cNHE-Pg.I discuss his thoughts and also talk about why the trends in household electricity use are problematic.
Some interesting stuff I came across:
- Luxembourg ranks last, Zurich first, London/Paris in top 1/3, in 2015 EU city ranking on pollution measures (measures include technical and economic measures, sustainable transport measures, emission reduction, modal split and transparency): http://sootfreecities.eu/city. And pollution measures should be vital especially for Luxembourg, see HERE a post of mine a couple of months ago. Basically, according to European Environmental Agency’s data, Luxembourg city’s pollution levels are so bad that
From the 11 countries that breached air pollution limits, it is Luxembourg that was among the worst, exceeding the ceiling for non-methane volatile organic compounds (NMVOC) as the only European country, and exceeding the mono-nitrogen oxides(NOx) threshold by more than 50%.
While I have no doubt in the quality of the European Environmental Agency’s data, it still somewhat surprises me. When I return from a couple of days in Paris, my lungs tend to hurt, especially in the summer. When I lived in London, black smog particles were accumulating on the window cill daily. Instead, when I worked in Luxembourg city, I didn’t really feel that affected by air pollution. Maybe Luxembourg city’s air pollution stations are located much closer to polluting sites than those in e.g. Paris and London?
- I came across some nasty information on Nestle Pure Life water. Basically, here is a Nestle advertisement: https://www.youtube.com/watch?v=IQ5mC2Barn0 and here the reality (in German): https://www.youtube.com/watch?v=gGB38A2Kds0. I am sure there are similar documentaries in English out there. The basic point is that Nestle buys the property rights for water in African regions, bottles the water and sells it to the rest of the world. However, locals do not anymore have access to this clean water, and subsequently have either resort to dirty water or are left with very little water all. Obviously, this is not only Nestle’s strategy, but there are many other companies in the world that obtain local property rights on important resources that are then unavailable for the locals. While this is e.g. also the case for diamonds or similar resources in several African countries, it is also clear that those resources are not basic needs resources such as water is, and thus their exploitation, though similarly questionable, is not that morally wrong as having property rights on basic need resources such as fresh drinking water. In this globalized world it becomes more and more difficult to know where the products come from and how they were produced. Thus, one solution is to rely more heavily on local products
- There is a nice article published in the journal Environmental and Resource Economics by Dasgupta, Partha and Southerton, Dale and Ulph, Alistair and Ulph, David, entitled “Consumer Behaviour with Environmental and Social Externalities: Implications for Analysis and Policy”, which you can find HERE. This article has been circulated on the net for quite some while, so for those who cannot download it you can find it on the net. It discusses the following:
In this paper we summarise some of our recent work on consumer behaviour, drawing on recent developments in behavioural economics, particularly linked to sociology as much as psychology, in which consumers are embedded in a social context, so their behaviour is shaped by their interactions with other consumers. For the purpose of this paper we also allow consumption to cause environmental damage. Analysing the social context of consumption naturally lends itself to the use of game theoretic tools. We shall be concerned with two ways in which social interactions affect consumer preferences and behaviour: socially-embedded preferences, where the behaviour of other consumers affect an individual’s preferences and hence consumption (we consider two examples: conspicuous consumption and consumption norms) and socially-directed preferences where people display altruistic behaviour. Our aim is to show that building links between sociological and behavioural economic approaches to the study of consumer behaviour can lead to significant and surprising implications for conventional economic analysis and policy prescriptions, especially with respect to environmental policy.
According to a recent publication by the WWF, the overall value of the oceans is 2.5 trillion US dollars annually:
Working with the eminent scientist Professor Ove Hoegh-Guldberg and in collaboration with leading business consultancy The Boston Consulting Group, WWF looked at the implications that leaders should consider based on current policies and practices. The results illustrate the economic case for ocean conservation in stark terms. The economic value of coastal and oceanic environments is valued conservatively at US$2.5 trillion each year…
I will explain a bit more carefully the difference between a value and a value added, the importance of non-market values, and why forwarding only market valuation in this case may lead to dangerous policies.
There is a new article of mine that I would like to announce, entitled “The endogenous formation of an environmental culture“, and I am happy to tell you that it is forthcoming in the journal the European Economic Review.
The article is summarized as follows:
This article presents a mechanism explaining the surge in environmental culture across the globe. Based upon empirical evidence, we develop an overlapping generations model with environmental quality and endogenous environmental culture. Environmental culture may be costlessly transmitted intergenerationally, or via costly education.
The model predicts that for low wealth levels, society is unable to free resources for environmental culture. In this case, society will only invest in environmental maintenance if environmental quality is sufficiently low. Once society has reached a certain level of economic development, then it may optimally invest a part of its wealth in developing an environmental culture. Environmental culture has not only a positive impact on environmental quality through lower levels of consumption, but it improves the environment through maintenance expenditure for wealth-environment combinations at which, in a restricted model without environmental culture, no maintenance would be undertaken. Environmental culture leads to a society with a higher indirect utility at steady state in comparison to the restricted model.
Our model leads us to the conclusion that, for societies trapped in a situation with low environmental quality, investments in culture may induce positive feedback loops, where more culture raises environmental quality which in turn raises environmental culture. We also discuss how environmental culture may lead to an Environmental Kuznets Curve.
So what is this all about?