Brisbane before and after the floods
A brilliantly conceived way of showing the impact of the floods that have afflicted many areas of Brisbane can be found here. Some stunning images here perhaps when thinking about the damage that floods create and flood defences as a public good.
The Externalities of Plastic
A hat tip to Mark Seccombe for suggesting these resources on the externalities of plastic waste - very timely as many teachers get stuck into aspects of market failure and sustainability with their AS students.
I came across this video which would be a good little clip to introduce negative externalities on both the production and consumption side. It would also reinforce the difficulties of putting monetary values on externalities. The first half is better for Economics, the second half drifts into sociological comment.
It could be supported by this cracking site on plastic bag usage. This article considers plant based plastics as a way forward, it could be good example of weighing up costs and benefits – the second-to-last paragraph has some good stuff from a business point of view.
read more...»Economics Q&A: Can economics provide answers to the crisis of collapsing stocks in global fishing?
The UK is one of many countries that now face a dilemma when it comes to fish stocks and their sustainability. In the UK we now consume over 385,000 tons of fish per year whilst on a global scale only 10% of large fish stocks that existed in the 1950s are still present today; this include both cod and tuna. Stock depletion has become a larger issue because of the increases in fishing technology – especially in long-line fishing which is the main technique used in Japan.
As a result many of the once inaccessible fish reserves have become economically viable to fish as boats are more fuel efficient and require less labour. In a fully functioning market the decline in supply of the product would cause an increase in price and act as a disincentive for consumers to purchase the product meaning that the industry would reach a sustainable equilibrium. In this case however there has been a deep market failure resulting from the tragedy of the commons. The sea, and its fish, is a common resource either on a global scale or on a national scale within a country’s own territorial waters. There are very few established property rights over the sea meaning that rational economic agents have an incentive to plunder the seas resources causing the falling fish stock levels.
read more...»The Impossible Hamster and Economic Growth
A new year hat tip to Paul Bridges and Carol Cornell at Tiffin School for pointing us towards this short and snappy animation about food happy hamsters and unsustainable growth. There are plenty of other videos linked in and around this you tube video.
Economics Q&A: Tragedy of the Commons and Market Failure
‘The tragedy of the commons’, although created by Garrett Hardin, is a famous concept which can be traced back to Adam Smith. It refers to a situation where individuals or private economic agents exploit scarce and rival common environmental resources for their own rational, self-interested aims, leading to over-production and the possible permanent depletion of the resource for all.
The essence of this problem stems from insufficient and poorly protected property rights. In other words, as consumers do not own these common goods, they have little incentive to take care of and maintain it, but rather an incentive to extract as much personal utility or benefit from it as possible at that particular time. Therefore, the provision of property rights over some grazing land may help to prevent it being permanently destroyed – instead allowing utility to be extracted from it at a sustainable rate. However, as the tragedy of the commons is a problem where one’s actions affect the benefits of others in the future, concerns for intergenerational equity usually end up being dominated by concerns for personal benefits.
read more...»Roger Harrabin - Environmental Economics Videos
I am a big fan of the journalistic work of Roger Harrabin at the BBC. Here is a nap hand selection of five recent video pieces on environmental issues focusing on emissions issues and policies in developed and developing countries.
read more...»Environmental Economics: Five Fresh Links
Here are five links to stories and issues connected to environmental economics - we are embarking on a study of this for our A2 microeconomics
read more...»Trees as private and public goods
Nancy Folbre an economics professor at the University of Massachusetts Amherst provides in this short article from the New York Times a beautifully clear explanation of the economics of deforestation and the tragedy of the commons. A superb article to print out and use when studying the motives of individuals within society and ideas for how social norms and local institutions really do matter when putting together policies to reduce global deforestation. Read Tree-economics
China limits rare earth exports
China (which produces about 97 percent of the global supply of rare earth metals) has announced that it plans to restrict exports of rare earths by 10% for 2011 and it is also increasing export taxes for some rare earth elements to 25 percent in 2011.
These moves raise fears that shortages of rare earths will drive prices higher and make many hi-tech consumer goods more expensive.
read more...»Promising news on deforestation
There is better news on progress being made by the Brazilian government in reducing the annual toll of deforestation in the Amazon. Better surveillance, tougher penalties and more effective incentives all have a role to play.
Successors to Roosevelt and Kruger - Marine Parks of the Sea
Charles Clover, author of The End of the Line - the inspiration behind the award-winning documentary film of the same name, was on splendid form in a talk to the school Geography Society tonight. After showing an abridged version of the powerful film he led a discussion on issues raised by the End of the Line. What is clear is the immediacy of the global fishing crisis. One way or another this will be resolved in our life time and the consequences of measures designed to protect and rebuild fish stocks and aqua-diversity will impact on billions of people around the world.
Accoding to Clover, the EU continues to be a black hole when it comes to successfully managing fish resources - if ever there is an example of government failure this is it. To save the Blue Fin tuna we need to set aside 20% of the Mediterranean and in some areas of the North Sea, replenishing haddock and cod stocks will require upwards of 50% of fishing grounds to be closed and the process of large-scale decommissioning of fishing capacity must continue. There is a stark paradox that fishing fleets can now make more money by fishing less because we are already way beyond the point of maximum sustainable yields. The “economic effort” required to catch one single fish in the North Sea has risen by 97 per cent over the last hundred years.
Investment in marine reserves offers much hope for the future and British money is leading the way in this. Charles Clover is President of the newly established Blue Marine Foundation and they have already had a major success. The Marine Protected Area (MPA) around the British-owned Chagos Islands will cover some quarter of a million square miles of sea around the archipelago in the Indian Ocean and include a “no-take” reserve banning commercial fishing. It appears to have been secured with a major investment from the Bertarelli Foundation.
The cost of damaging Planet Earth
A recent, two-year study for the United Nations Environment Programme, entitled The Economics of Ecosystems and Biodiversity (Teeb), put the damage done to the natural world by human activity in 2008 at between $2tn (£1.3tn) and $4.5tn. The loss of bio-diversity is a key element of this environmental impact.
At the lower estimate, that is roughly equivalent to the entire annual economic output of the UK or Italy.
In the US in 2007, for example, the cost to farmers of a collapse in the number of bees was $15bn, according to the US Department of Agriculture, contributing to a global cost of pollination services of $190bn, according to Teeb. More here from their website.
In 1998, flash flooding in the Yangtze River in China killed more than 4,000 people, displaced millions more and caused damage estimated at $30bn.
Read more here. The Independent also has a superb feature on this issue. Living Planet: The world is not enough
Searching for the right price for water
This OECD video available on You Tube argues the case for putting a price on water.
read more...»The Happy Planet Index
Statistician Nic Marks from the Centre for Economic Well-Being/ New Economics Foudnation asks why we measure a nation’s success by its productivity instead of by the happiness and well-being of its people.
read more...»Potash - a battle for grey dust that has become gold dust
The market for a particularly lucrative gray dust has been thrust into the spotlight this summer with news of a $38.5bn (£25bn) hostile takeover bid from Australian mining giant BHP Billiton for Potash Corp of Saskatchewan in Canada a business coined by some as the “Saudi Arabia of Potash”!
read more...»Falling in love with a fish
Chef Dan Barber argues for a radically different approach to food quality and sustainability with this impassioned and inspirational talk at TED - his love story revolves around a revolutionary farming method in Spain. Superb as part of any course on the economics of farming and fishing and approaches to the erosion of ecological capital. He argues that intensive agri-businesses that are reliant on capital and chemicals have never produced good food.
Nudging Consumers towards Sustainability
I popped over to the RSA last night for a meeting on nudging consumer behaviour to promote sustainability. The panel discussion featured Sir Martin Sorrell, Chief Executive, WPP, one of the world’s largest communications services groups; Dr Andy Wood, Managing Director, Adnams, one of the UK’s most carbon-efficient brewers and Dr Sally Uren, Deputy Chief Executive, Forum for the Future. Overall there was less discussion on ideas drawn from behavioural economics than I was expecting.
Sir Martin Sorrell focused most of his remarks on the progress that WPP was making in lowering their carbon footprint. He made some interesting comments on the power that brands have in changing consumer behaviour. When a brand is genuinely loved then there is more scope for companies to nudge consumers in changing their purchasing habits. But many businesses have legacy products they don’t want to alter. Sorrell argued that consumers in BRIC countries are greener than their Western counter parts and that taxes and regulation in rich nations can only succeed to a point.
Dr Sally Uren was on good form last night and I felt she made the most significant contributions from a behavioural economics perspective. Smart marketing about sustainability can make consumers feel good! And businesses need to be the ‘nudgers in chief’ and make small actions seem significant. She praised Tesco’s carbon management project - they are focusing directly on lowering the consumer’s carbon footprint as well as making progress in reducing their own carbon impact and through their supply-chains.
A point made by all of the panellists is that doing good is good business and that there is growing evidence of a seismic change in attitudes of business towards sustainability.
Recycling waste - goodbye stick, hello carrot
The proposal for a pay as you throw charge for collecting household waste is being abandoned by the new government as they turn instead to positive incentives for people to increase recycling rates. This BBC news article provides the background. Gradually the percentage of household waste that is being recycled after collection is rising.
But there are enormous differences in recycle rates across the country and also variations in what is being collected. According to the article, almost 37% of home rubbish was recycled in England in 2008/09 - up from 34.5% the previous year and a massive increase since 2000/01 when only 11.2% was recycled - the top performer was 62% in Staffordshire Moorlands compared to just 15% in Newham, London.
Will rewards instead of charges nudge people into making changes to their behaviour? Positive rewards within a voluntary system seems to have worked well in my local borough of Windsor and Maidenhead. Can it be rolled out across the country? Beware the law of unintended consequences!
Remember though that recycling is just one part of this issue. Cutting the amount of waste in the first place is hugely important and here both consumers and producers have important roles to play.
On the Daily Politics show Giles Dilnot reports on plans to end the bin tax
Economics of the EU Revision - Carbon Taxes
Revision notes on carbon taxation in an EU context
read more...»Lomborg stays cool as brickbats fly
Things got quite tasty at the RSA’s Presidential Lecture in London last night. Bjorn Lomborg - adjunct professor at the Copenhagen Business School and director of the Copenhagen Consensus Centre was at the RSA to deliver a lecture on tackling climate change. His delivery was relentless and I must admit to falling asleep for some of the time (it had been a long day at school). I noted his central theme that climate change is real, man-made and a big issue that we need to take seriously. But that the consequences of climate change are often portrayed in a one-sided manner and prone to exaggeration by those scared stiff by planetary emergencies and tipping points.
Lomborg is right to emphasise the importance of innovation (woefully under financed) rather than a single-minded approach to cutting emissions at all costs. The pay-offs from smart innovation are potentially huge. And this is where left-sided climate change campaigners just dont seem to get it. The next wave of green innovation is on its way and it is likely to come from emerging market countries - where research costs are much lower and where the incentive to develop, launch and then sell / licence innovative technologies is already well understood - and also from the labs of some of our top internet businesses.
Don’t be surprised to see Google emerge as one of the most successful and admired green technoloogy companies of the next decade. There is so much human capital in that business wholly committed to surprising and eye-catching innovations.
The question and answer session got quite tasty! There was the usual pre-planned attack on Lomborg from event guests sat on the front row. And one of the RSA Fellows resigned his fellowship in melodramatic and faintly comic fashion before striding out of the room (to the relief of those who stayed). Lomborg was cool in his responses and rather impressive. There were some smart questions from the floor, but the discussion was disfigured by people singularly unable to stand up and ask a question rather than engage in three minute streams of consciousness. Fortunately HRH Prince Philip was on hand to swat away some of the “piddling arguments” and keep things moving with his legendary good humour!
read more...»
Sustainability - building a building from plastic bottles
I showed this to my students today and these hardened Year 13 economists found this idea really cool,.It is a wonderful example of innovation, of sustainability, of design and style. And the creative ideas behind this new building have potentially huge commercial applications. Rubbish bin inspires Taiwan’s plastic bottle building - an example of how investment in sustainable energies and materials can be exported from developing countries to richer developed nations.
Here is the link to the BBC video
Footprint
The issue of water scarcity and the scale of our increasing demands on water supplies is in the news today. In this BBC news video Richard Black looks at the amount of water used in making goods imported to the UK. And a hat tip to Mark Seccombe for finding this vivid and superb supporting graphic from Visual Economics
Another great graphic here concerning water stress
Innovation in a Material World
A big hat tip to Henry Coverdale from KES Birmingham for spotting this excellent resource linking innovation to environmental strategies. Henry writes:
The potential solution to our energy needs. I caught this on Radio 4’s Material World on my way home last night: Nano-technologists from the University of Cincinnati have developed a new method for creating artificial photosynthesis. This can produce c.20% more energy than the best biofuels and 10x more than Bioethanol from plant crops, is over ten times cheaper, and doesn’t have the same resource requirements in terms of water or arable land. All-in-all a good example of the ingenuity that the incentive function of high energy prices brings. The discussion on Radio 4 is useful for more figures, listen here, starting at 22:10.
Bill Gates on Energy and Carbon
A hat tip to Tom Aedy for spotting this new TED video
read more...»The Economics of Cloud Computing and E-waste
Here is a thorough and well written explanation of some of the likely economic effects of the rapid expansion of on-demand cloud computing services. Most of the major players (Google, Amazon, Microsoft et al) are investing huge amounts in building up their server infrastructure to cope with the likely demand for cloud-based computing services. The article explores some of the positive externalities that might result from a move to the cloud and also possible effects on market structures as IT entry barriers for small to medium sized businesses are reduced.
“One of the main obstacles to entry in new markets is represented by the high up-front costs of entry, often associated with physical and IT capital spending. Cloud computing allows potential entrants to save in the fixed costs associated with hardware and software adoption”
For an alternative perspective, the Independent yesterday carried a feature on the externalities of e-waste - a good example to use of some of the external costs of the super-charged growth of IT services.
“The United Nations Environment Programme (UNEP) estimated that, worldwide, between 20 and 50 million tonnes of electrical and electronic goods which had come to the end of their lives were being thrown away every year. The latest UNEP report now estimates the annual total at 40 billion tonnes, with America in the lead, producing 3m tonnes domestically every year, followed by China with 2.3m tonnes.”
Revision Presentation - EU & Carbon Emissions Trading
This new revision presentation covers the policy and practice of carbon emissions trading in the European Union.
Launch presentation on EU & Carbon Emissions Trading
New House of Commons research report on carbon trading
Published at the end of January 2010 I came across this excellent report whilst researching an updated presentation on carbon trading and carbon taxes. The hmtl version of the report from the House of Commons Environmental Audit Commission can be found here. The role of carbon markets in preventing dangerous climage change
Here are some additional links to useful recent news articles and resources on carbon trading and carbon pricing:
read more...»Revision Presentation - Market Failure & the Environment
This new revision presentation examines the concept of market failure in the context of the environment.
Launch interactive version of Environmental Market Failure and Policy Options
Download printable handouts (pdf)
read more...»Sustainable development and the tragedy of commons
Between now and Easter I am teaching environmental economics and other aspects of market and government failure for my A2 micro groups. This week we are looking at environmental market failures and will spend a lesson looking at the Tragedy of the Commons. I found this superb eight minute You Tube video featuring the 2009 Nobel Prize-winner Elinor Ostrom who gives a tremendously clear explanation of how enhancing the way that local people organise to manage resources can be used to achieve a more sustainable use of scarce resources.
read more...»Made in the North East
On the day that Corus starts to mothball the steel plant at Redcar, there is important positive news for Tyneside with an announcement that a Windfarm blade plant is to open on Tyneside with the prospect of creating 500 new jobs in the next six or seven years. And this article from the Times is also optimistic for the region if they can develop and build a new expertise and competitive edge in creative industries, tourism and low-carbon eco-jobs.
read more...»
