Environmental Economics

The cromulent economics blog

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  • “Public willingness to pay for a US carbon tax and preferences for spending the revenue”

    Abstract:

    We provide evidence from a nationally representative survey on Americans' willingness to pay (WTP) for a carbon tax, and public preferences for how potential carbon-tax revenue should be spent. The average WTP for a tax on fossil fuels that increases household energy bills is US$177 per year. This translates into an average WTP of 14% more on average for households across the United States, where energy costs differ significantly across states. Regarding the tax revenues, Americans are most in support of using the money to invest in clean energy and infrastructure. There is relatively less support for reducing income or payroll taxes, returning dividends to households, and other expenditure categories. Finally, Americans support using the tax revenues to assist displaced workers in the coal industry enough to compensate each miner nearly US$146 000 upon passage of a carbon tax.

    Matthew J Kotchen, Zachary M Turk, and Anthony A Leiserowitz, Environ. Res. Lett. 12(9), 2017: https://doi.org/10.1088/1748-9326/aa822a

    via iopscience.iop.org

    And this:

    A separate survey question asked respondents about whether or not they think global warming is happening. The omitted category of 'don't know' is compared against respondents answering either 'yes' or 'no.' We find statistically significant results for both. Those who believe global warming is happening are 35 percentage points more likely to support the carbon tax, whereas those who do not believe global warming is happening are 25 percentage points less likely to support the carbon tax.

    Looking at the supplementary tables, willingness to pay is $368 higher for the 70% who believe that global warming is happening and $260 less for the 13% who don't believe it is happening (estimated relative to the 17% who don't know). These are huge differences from the $177 mean willingness to pay. 

  • I found a way to highlight the gender problem in economics on this blog

    What? There's a gender problem in economics?

    It is not difficult to find an all-male panel at the annual January mega-gathering of American economists. They are as common as PowerPoint presentations and pie charts. One such panel this year met to sleepily critique President Trump’s economic policies, but it was overshadowed by another panel, two ballrooms away, that jolted a profession that prides itself on cool rationality.

    That panel on Friday was stocked with women, each of whom presented new research that revealed a systemic bias in economics and presaged a move by the field’s leaders to promise to address some of those issues.

    Paper after paper presented at the American Economic Association panel showed a pattern of gender discrimination, beginning with barriers women face in choosing to study economics and extending through the life cycle of their careers, including securing job opportunities, writing research papers, gaining access to top publications and earning proper credit for published work. …

    Janet Currie, chairwoman of Princeton’s economics department, and Claudia Goldin, an economist at Harvard, pointed to a recent study that found that women get significantly less credit than men when they co-write papers with them, as reflected in the way the paper affects their chances of receiving tenure.

    When the co-author is a man, “people don’t say anything about it, it’s just normal,” Ms. Currie said. “When it’s a woman, it’s: ‘Oh, everything she wrote is with co-authors. How do we know she’s any good?’”

    She said the behavior, detailed in a paper by Heather Sarsons of Harvard, was related to a more widespread phenomenon. “There are lots of examples of when a woman says something, no one pays attention,” Ms. Currie said. “A man says the same thing, everyone says it’s great. It happens a lot.”

    Sarah A. Jacobson, an environmental economist at Williams College, recounted an experience during graduate school that she said was indicative: A well-respected female economist delivering a talk at her department was repeatedly interrupted by male economists when trying to answer questions from the audience.

    “In the middle of the seminar, a male economist I respect turned around — they’re in the audience — and they were explaining the answer for her, on her behalf,” Ms. Jacobson said.

    “You see it all the time,” she added. “You occasionally see it if a male is presenting. You see it pretty often if a woman is presenting.”

    What Sarah is trying to say is this: male economists, especially the older ones, tend to try to explain things for female economists, who they feel superior to simply because of their gender. 

  • Why does Economic Inquiry shout their titles?

    For example:

    Mueller-Langer, F. and Watt, R. (2018), HOW MANY MORE CITES IS A $3,000 OPEN ACCESS FEE BUYING YOU? EMPIRICAL EVIDENCE FROM A NATURAL EXPERIMENT. Econ Inq. doi:10.1111/ecin.12545

    Abstract. We analyze the effect of open access (OA) status of journal articles on citations. Using cross-sectional and panel data from mathematics and economics, we perform negative binomial, Poisson, and generalized method of moments/instrumental variable methods regressions. We benefit from a natural experiment via hybrid OA pilot agreements. Citations to pre-prints allow us to identify the intrinsic quality of articles prior to journal publication. Overall, our analysis suggests that there is no hybrid OA citation benefit. However, for the subpopulation of articles without OA pre- or post-prints, we find positive hybrid OA effects for the full sample and each discipline separately.

    via onlinelibrary.wiley.com

    $3000

  • “An Oath for Scientists”

    I swear that I will, according to my ability and judgment, protect the credibility of science by carrying out this oath and this indenture.

    To make the grounds for my scientific claims transparent and available for others to scrutinize, to welcome that scrutiny and accept that others will be skeptical of my claims, to help others verify the soundness of my claims; to describe my methods in sufficient detail for others to repeat them, to not obstruct others' attempts to replicate my work; to report all evidence I know of for or against my claim, to not suppress evidence against my conclusions, to correct my past claims if I learn that they were wrong, to support the dissemination of evidence that disconfirms or contradicts my past claims.

    I will hold myself and all other scientists to this oath, and I will not exempt any scientist because of her status or reputation. I will judge scientific claims based on the evidence, not the scientist making the claim. Neither will I hold any scientific claim or finding as sacred. Similarly, I will recognize as valuable the work of scientists who aim to correct errors in the scientific record.  

    In whatever claims I present in my role as scientist, I will not knowingly overstate or exaggerate the evidence, I will not make claims out of interest for advancing my own station, and I will disclose any personal interest that may be perceived as biasing my judgment.  I will protect the credibility of my profession by making careful, transparent, calibrated claims.

    Now if I carry out this oath, and break it not, may I gain for ever reputation among all scientists for my work; but if I transgress it and forswear myself, may the opposite befall me.

    via sometimesimwrong.typepad.com

  • Good luck to anyone who attempts to express concern / comment on a published paper

    This is not one of my adventures*:

    Three years after receiving a complaint about extensive plagiarism and major errors in an anti-global warming paper, Elsevier says it’s still reviewing the allegations. …

    After Jokimäki’s September 2014 exchange with Elsevier, he heard nothing from the publisher or journal for 10 months.

    In July 2015, the journal’s editor-in-chief, Kazmerski, told Jokimäki he had conferred with the authors and the reviewers of the paper, who agreed “some action was needed.” Kazmerski proposed a solution: Jokimäki would write a commentary on the paper, to which the authors could respond. Kazmerski said he would publish Jokimäki’s comment regardless of whether the authors wrote a rebuttal. In August 2015, Kazmerski invited Jokimäki and corresponding author Florides to start the process.

    In March 2016, Jokimäki sent Kazmerski his detailed commentary on the paper. Jokimäki co-authored the comment with John Mashey, a computer scientist who also writes for the blog Skeptical Science and has raised concerns about another controversial anti-climate science paper, which was ultimately retracted. The comment took about seven months to complete, Jokimäki explained, because he and others “are doing this as a hobby,” which meant that writing the comment paper “had to be done on our free time.”

    Over the next year, Jokimäki says he heard nothing from the journal.

    In March 2017, Kazmerski emailed Jokimäki explaining he had sent the authors’ rebuttal to Jokimäki 10 months ago. Jokimäki, however, says he never received that May 2016 email.

    In May 2017, Kazmerski sent Jokimäki the authors’ comments, which Jokimäki describes in his blog as making “hand waving type arguments,” and saying it would be “too much work” to submit a formal response.

    via retractionwatch.com

    *An update on one of my adventures: My replication paper has now received three reviews. I have responded to the first and still need to respond to the next two.

  • The cost of offshore drilling safety regulations seem low relative to the costs

    In case you missed it over the holiday break:

    The Trump administration is poised to roll back offshore drilling safety regulations that were put in place after the 2010 Deepwater Horizon oil rig disaster in the Gulf of Mexico that killed 11 people and caused the worst oil spill in American history.

    A proposal by the Interior Department’s Bureau of Safety and Environmental Enforcement, which was established after the spill and regulates offshore oil and gas drilling, calls for reversing the Obama-era regulations as part of President Trump’s efforts to ease restrictions on fossil fuel companies and generate more domestic energy production.

    Doing so, the agency asserted, will reduce “unnecessary burdens” on the energy industry and save the industry $228 million over 10 years. …

    Industry groups like the American Petroleum Institute have long opposed the safety rules, calling them “flawed and costly.” The fossil fuel interest group warned in 2015 that the regulations would reduce capital investment in the Gulf by $4 billion a year and threaten 50,000 industry jobs. …

    The Obama-era rules, written in 2016, tightened controls on blowout preventers, devices that are intended to stop explosions in undersea oil and gas wells, and called for rig operators to have third parties certify that the safety devices worked under extreme conditions. In the Deepwater Horizon spill, a supposedly fail-safe blowout preventer failed after a section of drill pipe buckled.

    As always with industry estimates you need to put them in context (ignoring the need to recognize that industry cost estimates are usually exaggerated to avoid regulations). The U.S. Energy Information Administration says that Gulf of Mexico oil production is 1.6 million barrels per day (2016). If the price per barrel is $65, then that leads to revenues of about $37 billion annually. The cost of the Obama-era rules is $22.8 million per year, about 0.06% of revenues or $456 for each lost job. The regulatory costs seem low to me, especially considering that the BP Deepwater Horizon blowout lead to 11 deaths and damages of $17.2 billion. 

    Note, that in contrast to API's warning that 50,000 industry jobs were at risk in 2015, the EIA said that "Oil production in federal Gulf of Mexico expected to continue increasing."

    What am I missing?

  • Quote of the day: revenue neutral carbon tax

    https://platform.twitter.com/widgets.js

  • CO2 emissions: Looks like it’s time to look in the mirror

    If you want to blame U.S. power generation for climate change, you're probably living in the past.  It look like U.S. transportation has passed power generation for 1st place in the CO2 emissions race:

    Some of the most common avatars of climate change – hulking power stations and billowing smokestacks – may need a slight update. For the first time in more than 40 years, the largest source of greenhouse gas pollution in the US isn’t electricity production but transport – cars, trucks, planes, trains and shipping.

    Is it time to talk gas tax again?

    Happy New Year.

  • A Winter Solstice miracle

    From the inbox:

    21-Dec-2017

    Dear John,

    Thank you for submitting your revised manuscript to the Journal of Benefit-Cost Analysis. It is a pleasure to accept your manuscript BCA-2015-0053.R2 "A benefit-cost analysis of a red drum stock enhancement program in South Carolina" in its current form for publication in JBCA. …

    I first presented this at the 2006 Southern Economic Association Meetings in Charleston, SC.

  • Will this be the biggest year for the stock market EVER? (Alt Title: Percentages matter)

    I seem to be on an explaining basic principles kick the last few days.

    I saw this story on CNBC this morning:

    The Dow Jones industrial average just did something it has never done in its 121-year history.

    The 30-stock average is now up more than 5,000 points in a year, marking its biggest annual-points gain ever. This following a 140-point rally Monday which sent it to an all-time high.

    Sounds impressive.  And it is.  But let's take a look at two time periods:

    According to MacroTrends.net, from January 2017-November 2017, the DJIA (that's the acronym for the Dow Jones Industrial Average for those of us in the know…), rose from 20,181.82 to 24,272.35.  That's an increase of 4,090.43 points. 

    Cool.  But what does 4,090.43 points really mean?  I have no idea.  It's some sort of an index based on the value of 30 stocks, defined by some group who like to do those sorts of things. 

    But is 4,090.43 a big increase?

    Take another randomly chosen time period, say, January 2009-November 2009.  In that randomly chosen period, the DJIA increased from 9,345.00 to 11,793.12.  That's an increase of 2,448.12 arbitrary points.  

    It looks like 2017 beats 2009, right?  

    Not quite. 

    Because the starting point in January, 2009 was much smaller than the starting point in January 2017, if we convert the changes to percentage terms, in the first 11 months of 2009, the DJIA increased by 26.2%.  In 2017, the comparable percentage was 20.3%.

    Given the choice would you rather earn 26% on your investments or 20%?  

    Both are good.

    But you would draw the wrong conclusion if you just looked at the absolute point change, rather than percentages.