• A relief to know that the US senate can change the laws of nature and decide that mankind finally does not influence the climate after all. There you go, in your face climate, you are not allowed to change anymore because the majority of US senators says so! Or, in the words of Senator Inhofe: “The hoax is there are some people so arrogant to think they are so powerful they can change the climate…Man can’t change the climate.” I simply wish nature would be as convinced of this statement as the US senators are…
  • There is going to be very nice conference on climate risks in Paris, 9-10 June, organized by the SCOR Foundation. Registration is mandatory but free, you can do it here: http://scor-climaterisks-2015.com/.
  • One notices that SciencePo really has money… So there is another conference on the 28th May TODAY (thanks Idrissa Sibailly for pointing this out) entitled “What role for cities in the international climate negotiations of Paris 2015?“. The speakers are Laurence Tubiana (Ambassador for Climate Change Negotiations and Special Representative of French Government for the Paris Climate Conference of 2015),  Gregor Robertson (Mayor of Vancouver), and Claire Roumet (Executive Director – Energy Cities) will share their views and experience of the fight against climate change and of the preparation for COP21. Finally, Jennifer Petrina, a student from Paris Climat 2015 : Make it work, will present the Sciences Po initiative, aimed at mobilizing universities all over the world for the 2015 international climate negotiations, including a 200-student simulation of COP21 end of May. Further information you can find HERE and you can register (free but mandatory) HERE.
  • Batteries for storing the electricity produced in one’s own home PV system are finally entering the market. While Tesla managed to create a media hype around its products, there are other producers that are producing at least equal products, see HERE.
  • A journal ranking for environmental economics seen at env-econ.net and initiated by John Bergstrom: 1) JEEM; 2) JAERE; 3) Environ and Res Econ (ERE); 4) Land Econ; 5) AJAE and 6) Ecol Econ. I think it depends on what one is mostly interested in. For mostly theory, definitely JEEM and JAERE; For empirics and wider intuitions, certainly ERE and Ecol Econ; for more agricultural research, Land Econ and AJAE, though both journals have the odd paper out on e.g. discounting (Land Econ), or labelling (AJAE). I think I mostly read papers from JEEM, now also JAERE, Ecol Econ, and ERE/Land Econ/AJAE in approx. equal share. I read very little from the other journals, mostly due to time constraints, though the Review of Environmental Economics & Policy has many good general papers with thorough intuitions.
  • An announcement for an interesting conference/debate in Paris at SciencePo for 21 May, from 5pm. The topic is Climate and Economics, and the speakers are Agnar Sandmo (Professor of Public Economics, Norwegian School of Economics), Martin Wolf (Chief Economics Commentator, Financial Times), and Alain Juppé (Mayor of Bordeaux and former Prime Minister of France) will introduce and moderate the presentations and debates. This is part of a series of conferences on similar topics. Agnar Sandmo is definitely one of the main researchers on public economics, public goods, externalities, and well-suited to present a discussion on climate and economics. Registration is free but mandatory, please follow this LINK.
  • There is more and more evidence that reducing pesticides may increase crop yields. PredatorTake a look at this article in The Conservation. Though seemingly counter-intuitive, this is achieved through integrated pest management. What is that? Basically, farmers follow a kind of predatory-prey model, where they use predators to fight off those preys that are harmful for their crops. Done well, this may reduce pesticide use significantly. For example, a recent article finds that on average yields increased by 41% over 1-5 years after the implementation of integrated pest control, while pesticides were reduced by 69%.
    This, in general, obviously is good news. But what are the costs? I remember having seen various studies that investigated the benefits and costs of integrated pest control. Basically, famers need to monitor much more carefully when e.g. the insects that eat their crops hatch in order to fight them off at the right moment with the right predator. If they are too late, the prey wins, if they are too early, the predators don’t manage to subdue their prey because they starve. Also, it is difficult to assess just how many predators need to be set lose because it is difficult to estimate the number of prey/pests. And their can obviously be other side-effects from the predators if they do not only attack the pest but also other useful animals in the area.
    But then again, we have quite a bit of knowledge on the mechanisms underlying this, what we need are bigger experiments, government funded, that provide this information for the farmers so that the farmers do not lose let’s say a harvest because they need to experiment with the predators before they can actually know how to perfectly use them.
    Another case for government intervention can also be made on the grounds that the use of pesticides induces externalities in terms of pesticides run-off into rivers, lakes, groundwater, etc. Furthermore, pesticides may harm the consumer, which again may be in the interest of governments to address. While this is done via regulation (how much and what can be sprayed with pesticides), there are many arguments that can be forwarded for government intervention more in the form of integrated pest control than in the form of regulating the use of pesticides only.

Some interesting reads:

  • Here is a link to a brochure that I found at SciencePo on Living Green in Paris. A nice iniative. Anyone knows similar initiatives for their cities? The guys who made the brochure also have a nice blog which you may want to visit, verTige. vertige is French for dizziness, vert is French for green, while tige is French for stem or culm, thus it is a nice wordplay. (Since I am an avid climber I’d like to add that if you meet a French who tells you (s)he has the vertige, don’t take them up high walls…)
  • Last chance (deadline 30th) to submit a paper for a nice climate change conference in Toulouse in September, follow this call HERE. The organizers are Toulouse School of Economics (TSE) and the Institut D’Economie Industrielle (IDEI), specifically Stefan Ambec, Claude Crampes, Thomas-Olivier Léautier and Jean Tirole. Furthermore, during the same week there is the 2nd annual meeting of the French environmental and resource economist association, deadline for submission is also 30th, and you can submit your paper through HERE.
  • EAERE early bird registration coming up. This is Europe’s most important annual Environmental and Resource Economist conference. I won’t be coming this year since I missed the deadline for paper submissions (doh!) and they are rather strict there… big PITY! Anyway, register here http://www.eaere2015.org/ if you can go even without presenting or if you sent a paper.
  • For researchers in need of money and with a good project at hand, please look into the ERC grants. A call is open now until 2nd June, follow this LINK.
  • Very interesting and illuminating database on anti-environmental lobbying: http://www.polluterwatch.com/.  They call it the Anti-Environmental Archive, and it contains a wealth of (leaked) documents on lobbying attempts, fruitful or not, of polluters and policy makers. Interesting is, for example, the lobbying works by ExxonMobil. According to the Anti-Environmental Archive:

Since 1999, ExxonMobil has spent almost $6.7 million on political campaign donations, $414,500 of which have gone to politicians in the 2013-2014 election cycle. ExxonMobil sends addition money on state politicials, spending over $5.3 million since 2003. Since 1998 lobbying disclosure laws went into effect, ExxonMobil has spent over $210 million on federal lobbying. In response to a three-phase plan to start controlling greenhouse gas pollution, ExxonMobil contributed pressure to former president George W. Bush’s office to prevent the Bush EPA from acting, effectively delaying initial EPA regulation for almost three years.

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.

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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.

  • Just a quick reminder, the PET 15 Luxembourg will be held on July 2nd-4th, 2015, with a welcome reception on July 1st, at the University of Luxembourg.   As with previous PET conferences, papers in public economics and related areas will be presented. Luxembourg is a charming, small city, easily accessible by plane and also by fast trains from Paris and other European cities.

    Confirmed Keynote speakers are:

    Professor Robin Boadway, Queens University
    Professor Martin Hellwig, Max Planck Institute for Research on Collective Goods
    Nobel Laureate Roger Myerson, University of Chicago

    You can find more information here: http://www.vanderbilt.edu/econ/faculty/Wooders/APET/Index.html

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.

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cultureThere 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?

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