Friday, December 8, 2017

Prices

A lot of Economics boils down to prices. If prices were perfect, reflecting all the costs associated with a given product, then all it would take is rational consumers (admittedly not as easy as once thought) to get society to the "right" AKA socially optimal level of consumption. The problem for today is that prices aren't as perfect as we'd like: they really ought to include the costs of associated pollution, and they don't, as you may have learned in your microeconomics or environmental Econ class. That's not a big deal if that additional cost is small, but in today's news:

Cost of pollution is higher than we think

There are particular applications to food. We want an agricultural production system that produces food with costs as low as possible, including all costs. So, agriculture that creates pollution should have that cost factored in. Also, governmental subsidies hide some of the costs, but as noted by this author, maybe not as much as we think when it comes to some products. Prices are unfortunately hard to get right!

Tuesday, November 28, 2017

Protein

How can we maximize the efficiency of agriculture? We want to produce as much food as possible using as little as possible of our other resources (and minimizing harm done via pollution). One resource it's important to make the most of is land, and that's why this graph is so compelling. (hat tip to https://twitter.com/GeorgeMonbiot/status/935201947610574848)

I was a little surprised to see maize on the list at all: Jared Diamond's fascinating book Guns Germs & Steel tells, among many other things, about how corn's low protein content slowed the development of civilization in the Americas as contrasted with the Middle East. The crops produced today, at least, don't seem that different: there's a little more protein in wheat (10% vs 13%). Interesting to know!

Thursday, November 16, 2017

Pollution's toll on our waterways

While it's no news to Marylanders, for whom the state of the Chesapeake can be a bit of an obsession, more and more parts of the country are starting to wake up to the damages of agricultural runoff. This article focuses on algae, which makes it seem like a simple problem of too much slime, but the consequences are severe. More dramatic is the term "dead zones," a direct result of algae sucking the dissolved oxygen out of water and creating an area in which aquatic life cannot persist. Almost as bad are the problems created when algae blocking out the sunlight prevents subaquatic vegetation from getting the resource they need to thrive. With no SAV, an important ecosystem is gone, leaving crabs and juvenile fish no place to hide.

If you aren't aware of the damage that fertilizer can do, please take a quick look!

Wednesday, November 15, 2017

Responding to climate change in the best way possible

Economists are interested in finding the optimal solution: how to maximize social welfare.

In the case of climate change, what that boils down to is limiting activities that wastefully emit carbon. If burning coal will save someone's life, I'm for burning coal, even if it leads to worsened climate change. And to be honest if burning coal will help build a car that will save me a lot of time, I'm probably for that too.

One way to get to that optimal point is to put a price on carbon emissions: a price that would then be included in life-saving treatments or the price of that time-saving vehicle. So how do we find the right price? If we set it right we will block the "wasteful" uses, but allow the important uses. See Prof. Max Auffhammer's short video for more on prices and on the social price of carbon. Hint: what's the answer to life, the universe, and everything?

Tuesday, October 31, 2017

Fruit, pesticides, and fertility

Study out yesterday showing that pesticides on fruits are linked to decreased fertility in women. While I'm guessing that the risks don't outweigh the benefits of eating fruit in general, people hoping to become pregnant may want to be careful... of yet one more thing.

Wednesday, October 4, 2017

Air Pollution Externalities

All of London is suffering from low air quality. The damage to children is particularly acute. Yes, the problem is hard to solve because both the cause and the damage are diffuse, but that doesn't mean we shouldn't act!

***Update: I was going to make this a separate post, but it's too similar to this one! 1 in 6 deaths in 2015 is linked to pollution, and most of them to air pollution. That's crazy! That's three times more than AIDS, TB, and malaria combined.

Wednesday, September 13, 2017

Tolls and traffic

Nice example of the impacts of tolls in British Columbia, where the removal of a toll increased traffic by 24%. The elasticity homework problems almost write themselves!