A Good Environment For Jobs

by Matthew P.H. Taylor at the Stockholm Environmental Institute – U.S. Center.

As the 2012 U.S. presidential election heats up, two important and related issues will set President Barack Obama and Governor Mitt Romney apart – jobs and the environment. But how exactly do the candidates’ views on employment and environmental protection measure up? Mr. Romney and his supporters would have you believe that environmental regulation kills jobs, and that the government should worry less about environmental protection and more about creating “an environment that is good for jobs.” President Obama, on the other hand, views environmental protection as a directing force for economic recovery. Both have a host of studies to back them up – and both perspectives cannot possibly be accurate.

A recent study conducted for E3 Network by myself and Liz Stanton at the Stockholm Environmental Institute’s U.S. Center, reviews the body of employment impact studies that support the candidates’ disparate claims. These studies, conducted by industry groups, environmental advocates, governments, and academics, address a range of environmental issues, including the expansion of the Keystone XL pipeline, offshore drilling, and recent regulations affecting electric utilities. We find some serious deficiencies in the quality of these analyses, resulting in the identification of some key questions that must be asked when assessing and interpreting their claims. We conclude that the characterization of environmental regulations as job-killers is groundless.   Continue reading…


Real People, Real Environments, Realistic Economics

The following is an excerpt from the founding statement of E3 Network.

The wealth and power of humanity in the 21st century can be used to create a far better world.

We are among the large and growing number of economists who are troubled by environmental degradation and social injustice, by the wide and growing inequality of wealth and income in America and in the world, and by the harmful impacts of the globalized economy on the natural systems that surround and support human activity.

We believe that humanity in the twenty-first century has the collective capability to eliminate hunger and poverty worldwide, to attack lethal diseases instead of each other, and to build societies based on fairness toward others and sustainable relationships to the natural environment. These goals are both socially desirable and economically feasible. The question is: how do we get there from here? Continue reading…


Great New Series on Drought in America

The United States is experiencing its worst drought in half a century, with serious and far-reaching implications for everything from food supplies to electricity production, biofuels to property values. In an effort to raise awareness of the connection between climate change and severe drought,  the Union of Concerned Scientists has started a series of blog posts that explore the science as well as the impacts on agriculture, economics, energy, and the strain on water resources.

The first three posts in the series, can be found here:

The Enormous Costs of the 2012 Drought to American Farmers and Taxpayers, Rachel Cleetus, senior climate economist

Drought Double Whammy:  As the World Warms, U.S. Droughts Likely to be Hotter, More Damaging, Brenda Ekwurzel, climate scientist and assistant director of climate research and analysis

2012 U.S. Drought and Heat Expose Electricity Supply Risks, Erika Spanger-Siegfried, senior analyst

There will be a total of about 10 posts over the next three weeks. You can subscribe to 2012 Drought in America blog feed to receive notification when the next post is published.

 


From Top-Down to Bottom-Up: New Directions for Climate at Rio+20

In 2009, I published a book with Graciela Chichilnisky, Saving Kyoto (New Holland 2009), that argued passionately for preserving the economic and political architecture of the only international treaty on climate change the world has known – the Kyoto Protocol. The book was timely: the countdown to compliance with Kyoto’s mandated emissions targets had begun; the international community was gathering that year in Copenhagen to negotiate the next round of climate commitments; and there was hope that the Obama administration could usher the U.S. back to the negotiating table in earnest. More importantly from my perspective, however, was the growing realization that the window of opportunity for stabilizing the earth’s climate system was rapidly coming to a close. The urgency of the crisis demanded immediate, extensive emissions reductions. And I firmly believed that a coordinated international effort that mandated reductions from world’s largest emitters was the fairest and most efficient way to stave off climate disaster.

This year marks the 20th anniversary of the famous Earth Summit in Rio de Janeiro and the signing of the United Nations Framework Convention on Climate Change (UNFCC), the international governance framework that eventually gave rise to the Kyoto Protocol. As the global community convenes again this week in Rio to establish goals and strategies for sustainable development for the next 20 years, its failures to arrest climate change over the last 20 years will be hard to deny. But it will also be hard to ignore the real energy, innovation, and progress around climate change that is emerging from the ground up all over the world. The examples are many, including Germany’s aggressive use of feed-in tariffs that is helping to drive down the costs of solar technology worldwide; the commitments of cities across the globe to redesigning their infrastructure, planning, and policies to dramatically slash emissions; and the emergence of regional emissions reduction schemes, such as California’s AB32 and the Northeast’s Regional Greenhouse Gas Initiative. Even private industry is taking positive leaps forward toward embracing energy savings and preparing for future uncertainties around climate change and global energy prices Continue reading…


Tribute to Elinor Ostrom

By Gernot Wagner, Environmental Defense Fund

Economists typically aren’t known for being nuanced. They are known, though, for responding to incentives. So perhaps this should change things: in 2009, Elinor Ostrom shared a Nobel Prize in economics for looking at exactly the question of what happens in between the two extremes: the tuna’s global free for all and the straw man of all-private, all-the-time. The Nobel citation commended her “for her analysis of economic governance, especially the commons.”

Her analysis applies to anything from Maine lobstermen to Swiss Alpine pastures to small forests in India, irrigation rights in Spain and the Philippines and umpteen other cases. Ostrom set out to find patterns across these disparate cases. At first, she was looking to deduce a blueprint, a single rule. That was harder than it looks.

Bear with me. Ostrom won a Nobel for her nuance for a reason.

She identified six common themes of what works and what doesn’t.  First and foremost, avoiding the tragedy of the commons takes well-defined territories. Maine’s lobster gangs definitely share that feature. Anyone who violates the boundaries of their own lobstering ground might find their lobster traps cut or their outhouses burning. Even Hardin’s pastures should have clear boundaries: fences, usually, or other natural limits. Second, she found a rough link between the costs and benefits of the rules of the game. If lobstermen felt that sticking to their gangs’ edicts didn’t provide them with appropriate personal benefits, gangs would quickly fall apart. Self-interest still rules the day. Similarly, and point number three, everyone wants a say in setting up the rules. Not everyone’s advice will be heeded, but everyone at the very least will be heard. That’s not just an act in futile pseudo-democracy; it’s key for keeping everyone on board and committed. Fourth on Ostrom’s list is monitoring. Someone ought to keep track of what’s going on. That could either be the unelected gang kings or the duly elected head of the local Lobstermen’s Association. In either case, he or she needs to draw their authority by cultivating the respect of everyone involved, and also provide a forum for grievances, another one of Ostrom’s points. Which leaves us with her sixth: There must be sanctions for violations of any kind. These can’t be too exorbitant at first but ought to be increasingly stiff for repeat offenders. Three strikes and you are banished from the harbor.

Preventing the tragedy of the commons turns out to be a messy business. Systems that combine private efforts, public governance and communities of various shapes and sizes tend to manage resources best. And it’s often the community function that has the biggest influence.

Maine lobstermen don’t just compete with each other once to catch as many lobsters as possible for themselves. They face each other season after season and also in other walks of life, whether at the market, at their kids’ school, or in church.

The key word in all of this is “manage.” Garrett Hardin, Mr. Global Commons Problem, by now has acknowledged as much. Thirty years after his article that caused the original stir, he wrote a follow-up for Science in 1998, in which he declared his “weightiest mistake” to be “the omission of the modifying adjective ‘unmanaged.'” The tragedy of the unmanaged commons makes ruin inevitable. Although here again, he manages to present the solution as an either-or: the choice is between “socialism or the privatism of free enterprise.” If you like to describe Maine harbor gangs as “socialist,” fine. I have a feeling that they would strongly disagree and may even back up their verbal disagreement with decidedly non-social behavior.

The true system of checks and balances that keeps the system afloat is much more nuanced than that. It is “polycentric,” to use Ostrom’s Nobel-winning term.

The crucial question now becomes which kinds of commons can be managed—whether mafia-style as with Maine’s harbor gangs or in slightly less dramatic settings like Alpine pastures or ancient irrigation systems that have been managed successfully for many centuries? The example of the factory upstream and the pollution victim downstream is on one end of the spectrum. That’s Ronald Coase and Garrett Hardin’s territory. Maine lobster grounds are somewhere in the middle. That’s where Ostrom shines.

And shine she did. Only today, her latest analysis appeared about why cities can and must show the way on climate, Rio+20’s ambitious (and necessary) global goals notwithstanding.

R.I.P.


Desert Year:$3 Trillion Thought Experiment for Rio+20

Because I roam the desert a lot, the UV Index is something I pay attention to.  It is an international standard that measures the strength of ultraviolet radiation from the sun at a given time and place. Canada was the first to adopt such an index in 1992. The U.S. followed in 1994, as have any subsequent number of countries since that time.  Today the World Health Organization (WHO) has standardized the UV Index by replacing the many different regional methods that otherwise provided an inconsistent set of results.

A UV index of zero is essentially a nighttime reading.  An index of 10 (highlighted by the color red) roughly corresponds to the midday sun beating down on the earth through a clear sky.  Here on the desert we often hit the extreme, at noon, with index of 11.  That is the color purple and not really all that uncommon.  And as I reflected on the thought experiment I am about to describe, yes, I was out on the desert floor at roughly the time when the UV Index hit purple.

Knowing my exposure, I suspect some are likely to think that the intense sunshine will explain my estimate of a $3 trillion loss to the U.S. economy. But, I was properly protected and not really outside for all that long. And if we step back to think about it, that very big number may prove a useful metric to help us understand the huge economic opportunities that await us – should we begin to think big about energy efficiency. And I discuss all of this in the context of the 2012 Earth Summit to be convened in Rio later this month. Continue reading…


Breaking the Association Between Believing in Climate Science and Big Government

This piece was originally published on Gernot Wagner’s blog site.

Facts are polarizing, and are easily misused. That, in short, is the conclusion of the latest paper by Dan Kahan et al in “The Polarizing Impact of Science Literacy and Numeracy on Perceived Climate Change Risks,” expertly reviewed in “Another nail in the coffin of Enlightenment reason” by David Ropeik for Bigthink.

The conclusion Ropeik draws seems clear: Now that we know that facts are misconstrued by those trying to further their own agenda, let’s use that knowledge when trying to talk about facts in the first place. In other words, put them in context, look to culture, norms, psychology, group behavior and all the other messy things that make global warming such an intractable problem.

We—as in those worried about global warming and wanting to do something about it— also need to keep in mind how our own actions and words are perceived. It’s not so much that climate deniers don’t actually like the science. It’s that climate deniers think they don’t like the inevitable conclusion: a big government take-over, a move to zero growth, a change of the American way of life as we know it—in other words all the things the “Left” seems to think are indeed necessary to make the change, epitomized by Naomi Klein’s take on “Capitalism vs. the Climate.” No wonder the “Right” believes the “Left” has an insidious agenda, using climate policy as an excuse redistribute wealth and re-create society in their own image.

The problem with Klein’s take is that it’s smart, insightful, but only half right:

Her assessment of the obstacles to solving climate change — from ideology to misplaced faith in green consumerism — are exactly right. And she’s right that fixing this problem means changing how the world does business.

But Klein is wrong in her more serious assertion…that we can save the planet only if we abandon capitalism. …

The deeper problem is not that our markets are too free; it’s that they are woefully rigged in favor of pollution.

In other words, it’s about harnessing market forces to address climate change.

I’m under no illusion that saying as much, as many from Robert Stavins on down have been trying to do for years, will do the trick all by itself.

But—and that’s the big but here—all of that market-centric language—as much as it pains liberals to embrace it—may well be the best response to Kahan et al’s powerful psychological research. It’s about breaking all-too-simple alliances, factions, and associations.

If “Believe in Climate Science” = “Big Government” in some (most?) people’s minds, then yes, increased knowledge about climate science will turn off those who strongly believe in small government.

If “Believe in Climate Science” = “Better-Functioning Markets” = “Less Socialism” and even = “Leaner, Meaner, Better Prepared Military,” alliances may well begin to change—slowly, perhaps too slowly, but still. It seems to be the only answer we have.

Gernot Wagner is an economist with the Environmental Defense Fund.


Breakthrough Institute Fails to Flatten Climate Economics

Why does the Breakthrough Institute insist that everyone else besides them who cares about the environment is wrong, wrong, wrong? Their latest, called “The Creative Destruction of Climate Economics,” is a swipe at those misguided souls who think putting a price on carbon emissions would help combat climate change.

Breakthrough, according to its website, aims “to modernize liberal-progressive-green politics” and to accelerate the transition to an “ecologically vibrant” future. They “broke through” into well-funded fame in 2003 with their attack on environmentalists for failing to emphasize the economic concerns of ordinary Americans, such as jobs – thereby alienating  the major environmental groups, who had been talking about jobs and the environment for years.

What’s wrong with pricing carbon emissions? This particular breakthrough rests on a mistaken reading of an academic paper in the American Economic Review, the most prestigious outlet for mainstream economics. That paper develops a simplified, abstract model of an economy that generates carbon emissions. Unlike some climate economics models, it assumes that public policy can affect the pace of innovation. Its conclusion, in the authors’ own words, seems quite balanced: Continue reading…


Desert Year: Doing a 180 on Energy

Running with the lizards and doing a 180 on energy!

The heat of the season is beginning to arrive earlier in the morning. And on this particular day it seemed especially sensible to get out ahead of the sun – well before it began to beat down with any real strength.  So I headed out early for a leisurely morning amble.  The route took me up a road that has very high curbs to channel the water from the fall monsoons. On this specific stretch of curb there was a single lizard, hugging the side of the concrete wall.  It scurried maybe 10 feet ahead of me as I approached, and then it stopped.  As I again advanced within three feet, it jumped ahead maybe another 8-10 feet, still hugging the curbside. And then again. . . .

I don’t have a clue why the lizard insisted on moving forward with me, hugging tightly to the pavement sidewall. The smarter thing, it seemed to me, would have been to scurry at a very quick right angle away from me to safety.  Yet, as I again approached it for perhaps the fifth time, it suddenly turned 180 degrees and bolted past me in the opposite direction – leaving me alone with my thoughts.  Although the suddenness of its movement startled me, I reflected a little and thought . . . that was very cool. And I immediately wondered why it is that we are so often dogged in maintaining our existing course of action?

A Changing of the Minds?

The good news is that people can and they sometimes do change their minds. Not to distract from his current predicament, in 2006 Rupert Murdoch, for example, “had a change of heart on climate change and now believes global action is needed.” Also changing his mind on climate change? Bjorn Lomborg who claimed for many years that climate was not an especially important issue to address. Yet in 2010 he released a new book with new equations stating the exact opposite. The indication is that while did change his mind, he hugely underestimates what might be an appropriate scale of mitigation effort. His current thinking recommends that we should spend $100 billion a year to mitigate and avoid the impacts of greenhouse gas emissions. The evidence, however, suggests it should be many times larger.  Continue reading…


Reason, empathy, and fair play for a better climate policy

This blog post originally appeared on Climate and Development Knowledge Network.

Some economists conclude that the best response to climate change is to allow greenhouse gas emissions to keep growing throughout this century, although making sure their growth is slower than under a “business-as-usual” (no policy action) scenario. Others economists say the best policy is to lower emissions quickly, starting as soon as possible, and eliminating all greenhouse gas emissions before 2100. How can scholars using the same basic set of analytical tools come to such radically different policy recommendations?

A new report from the Stockholm Environment Institute uses the CRED model to show how three simple changes can turn a slower-emissions-growth policy into a call for immediate, steep reductions. Here the slower-emissions-growth policy is defined as one that allows carbon dioxide emissions of 5,400 thousand million tons (gigatons or Gt) during the 21st century. The immediate, steep reductions policy is defined as capping cumulative 21st century emissions at 2,000 Gt and providing a 4-out-of-5 chance that temperature rise will stay under 2°C. The three changes to the economic model can be described in short as: reason, empathy, and fair play.

The first change, reason, requires understanding and believing the most up-to-date climate science. When climate-economics models start with the assumption that high temperatures and rising seas won’t cause a lot of damage, that’s what their results will reflect. In these models, bringing the relationship between climatic changes and economic damage better in line with current scientific findings increases the importance of lowering emissions. Continue reading…