• An animated chart of global marine fish stocks from The Economist HERE. Basically, while in 1950 roughly 90% of the fish stocks were in their natural state, in 2009 90% are either fully exploited, over-exploited or collapsed. From the FAO report The State of World Fisheries and Aquaculture 2014: “Global fish production continues to outpace world population growth, and aquaculture remains one of the fastest-growing food producing sectors. In 2012, aquaculture set another all-time production high and now provides almost half of all fish for human food.” Though this seems to be good news, Katheline Schubert and Esther Regnier have a paper together on aquaculture where they show that aquaculture can, nevertheless, have negative consequences on fish stocks. Under some conditions, “Aquaculture worsens the pressure on the wild edible fish stock and leads to a decrease of total wild fish stocks in the long run.”
  • Writing at the Energy Institute at Haas, Meredith Fowlie suggests that moral suasion is no substitute for getting the price right. Her comment is based on a paper by Koichiro Ito and co-authors,  who find the following: “Firms and governments often use moral suasion and economic incentives to influence intrinsic and extrinsic motivations for various economic activities. To investigate the persistence of such interventions, we randomly assigned households to moral suasion and dynamic pricing that stimulate energy conservation during peak demand hours. Using household-level consumption data for 30-minute intervals, we find significant short-run effects of moral suasion, but the effects diminished quickly after repeated interventions. Economic incentives produced larger and persistent effects, which induced habit formation after the final interventions. While each policy produces substantial welfare gains, economic incentives provide particularly large gains when we consider persistence.” It would be interesting to also know whether moral suasion together with some peer pressure would not lead to more persistent results. Also, it is really surprising that price incentives would lead to long-run effects. While the authors forward habit formation as a possible argument, it would be interesting to know whether the price effects still linger on now (i.e. 1-2 year after).
  • Thursday: Jeudi 21 mai 12:30-13:30 Emma Hooper (GREQAM, Aix-Marseille School of Economics) will present Sustainable growth and financial markets in a natural resource rich country, at PSE in Paris (see Environmental Economics Calendar).
  • I added a new calender to the blog (on the right Sidebar). I call it the Environmental Economics calender and will use it to inform interested readers about environmental economics seminars around Paris, but also about environmental economics conferences and workshops. If you have an interesting workshop/conference/seminar that you would like to see advertised/announced please let me know.
  • I also take the opportunity to provide some preliminary information on a workshop that I co-organize on the 6th July 2015 in IPAG, Paris: The changing role of economics and economists in nuclear policy and politics. This workshop will be a side-event to the huge Our Common Future under Climate Change conference that will be held in Paris, 7th-10th of July. We have very interesting speakers so far: Tom Burke (E3G, Imperial College London), Dominique Finon (CNRS), Jan-Horst Keppler (OECD/NEA), Patrick Momal (IRSN), Gordon MacKerron (University of Sussex), Steve Thomas (University of Greenwhich), William Nuttall (Cambridge University), and the BBC journalist Rob Broomby, who is going to chair the panel discussion. More information to follow soon. Registration: Attendance is free but registration is required by the 19th of June 2015. Please follow the link ingmar.schumacher@ipag.fr to send an email with the subject line: “Nuclear workshop registration” in order to confirm.
  • The psychology journal Basic and Applied Social Psychology has banned the use of p-values for empirical articles, see HERE. Is this a useful change and will other journals follow? The p-value is basically used in statistical tests to tell you something about how significant your results are. For example, we try to understand the impact of x on y, using y= alpha x+e, where alpha is the coefficient to be determined and e the errors. We would hypothesize that alpha=0 (H0). Then a p-value below 0.001 is interpreted as meaning that the coefficient alpha is highly statistically significantly different from zero. Or, in other words, we cannot reject that 1 out of 1000 times the coefficient alpha is zero.
    Thus, if the p-value we obtain is e.g. lower than 0.001, then we would reject H0. The problem then is that this gives us only an indication that we would expect the coefficient not to be zero, not which other number it would take. If the p-value is above 0.001, then we cannot reject H0 at that significance level. However, we can never accept H0.
    I guess that it is for these reasons that the editors of Basic and Applied Social Psychology decided to ban the use of p-values. In my opinion, a regression result should always be interpreted as the best case that a researcher can make for a hypothesis, or for a model. I think it is quite clear that one can always make a worst case, too. Including or dropping some variables, some other time-series filter, another group of countries, another time period, another treatment of spatial or cross-observation correlation, another regression method is always likely to lead to a different statistical result. I hypothesize that there is no statistical result that is so robust that it holds for any (statistically reasonable) change in the modeling assumptions. For, if there were, then we would not need statistical interference! However, if we do not rely on statistical interference, what is the use of statistics if we cannot study hypotheses and at least know that there exists a best case result for our model?
    Thus, in my opinion, most journals are not going to follow this ban. Also, if one understands the limitations of p-values and how they should be used, then there is nothing really wrong with them and they add a little bit of information to the results.
    Furthermore, and maybe most importantly, I think it should continue to be best practice to not just throw an econometric regression at an audience, but to start by making a convincing case based on a model that captures the most important relationships between the variables in question, and then provide a best case scenario for this model. This best case scenario should be complemented with robustness exercises that show under which conditions this best case continues to hold, but also when it may not hold anymore. This gives some understanding of the robustness and where the model may go wrong, or where the data does not fit.
    Furthermore, if statistical analysis does not support a model, then this should not directly invalidate the model. As I was told once by a friend: “If the data does not fit the model, then too bad for the data!”  Clearly, the question then is where are the problems with the model, or why does the data not support the model. I guess the point that I am trying to make is that we should simply be much more careful in our statistical analysis in general, and not simply run the one or the other regression but clearly think of what we want to know, what model we have in mind, how robust our results are, when they are not robust any longer, what the limitations are and where they come from.
  • Jane Goodall – I first learnt about her from The Far Side Gallery years ago and then got to know about her real achievements – suggests HERE that SeaWorld should be closed down. Similar points could be made about closing down most zoos in the world. However, as is noted HERE, most animals that lived for years and years in captivity are unable to adjust to `real’ life. Also, for children (and grown-ups, too) visiting zoos is often a wonderful experience that brings them closer to nature and appreciating it. Of course, the question should be whether this has to be at the costs of those animals that are held captive? Difficult…
  • What bees and voting have in common according to Marginal Revolution. Alex Tabarrok argues that quadratic voting could help to convey the intensity of one’s choices. In my opinion this comes very close to simply saying people have a financial budget that they can allocate to voting. This thus more reasily helps to equalize marginal benefits and costs, which simply gives more information than the traditional `one (wo)man – one vote’ principle.
  • 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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