Posts Tagged ‘environment’

Older Entries »
h1

Green urban infrastructure can save green(backs)

May 4, 2012

Lynne Kiesling

Some of the best environmental projects also save money. This post at The Atlantic’s Cities blog highlights urban green infrastructure such as permeable pavement projects, including a recent study finding that they can also be economical:

Looking at 479 case studies of green infrastructure projects around the U.S., the report finds that the majority of projects turned out to be just as affordable or even more so than traditional “grey” infrastructure. About a quarter of projects raised costs, 31 percent, kept costs the same and more than 44 percent actually brought costs down.

Here’s the logic: suppose you are, as Chicago is doing, using permeable concrete now when repaving alleys. Permeable concrete is more expensive than traditional concrete, but because it allows rainwater to return to groundwater, it reduces the water flow into storm drains, the sewer system, and wastewater treatment facilities. So you have to evaluate the higher construction costs versus the lower wastewater treatment cost and other reduced costs of storm runoff, including lower operating and maintenance costs. As reported in the post:

The costs of traditional infrastructure are especially pronounced in cities and regions with combined sewer systems that collect both sewage and stormwater. During heavy rainfall, these systems are often overwhelmed, pouring sewage-laden water into drinking water sources and greatly increasing water treatment costs.

Technologies like permeable pavements and rain gardens can capture, naturally treat and filter stormwater back into the ground, preventing overflows and reducing reliance on treatment centers. Chicago’s existing green infrastructure, including its green alleys, diverted about 70 million gallons of stormwater from treatment facilities in 2009, according to the report.

I can attest to the existing strains on the sewer/storm runoff system in Chicago; we live just off of a main north-south surface street, and after a heavy rain like last night’s there are substantial pools of water backed up onto the street around several of the storm drains (my neighborhood hasn’t had our alleys repaved yet). Moreover, this runoff frequently overflows from the sewer system into Lake Michigan, leading to beach closures on the days following rainstorms. I could channel my inner John Whitehead to do a travel-cost estimate of the value of the lost recreation, which reinforces the value of permeable concrete. One thing we don’t know yet, though, is if it’s as durable as traditional concrete, or if it depreciates more quickly.

All of this reminds me that I have to get the KP Spouse moving on that rain barrel …

Posted in Chicago, Economics, Environmental policy | Tagged , , | 1 Comment »

h1

Praise for a New York Times article on natural gas fracking (Or, How property rights help mitigate potential environmental harms)

October 21, 2011

Michael Giberson

I’m writing in praise of a New York Times article on natural gas fracking. Yes, really! Even more surprising, I’m writing in praise of a New York Times on fracking written by Ian Urbina. Yes, really!

What is this marvel, you ask? I answer, ”Rush to Drill for Natural Gas Creates Conflicts With Mortgages.”

What is so marvelous about this article? I answer, the way it highlights how property and contract laws can serve to regulate potential environmental harms from gas drilling and hydraulic fracturing.

Of course, as the headline suggests, the focus of the article concerns mortgage restrictions which may be violated if a property owner leases part or all of the property for oil or gas development. Mortgage lenders usually include such limiting provisions in loan contracts to help ensure protection of the property, which typically serves as collateral for the loan. Obviously mortgage contracts differ and the article notes that only sometimes will leasing violate a mortgage. The article further notes that lenders who don’t secure such restrictions in their mortgages, or who fail to closely police compliance with such restrictions, may find it difficult to resell their mortgages in the secondary market.

But here is the deal: almost all of the well-documented environmental harms from natural gas drilling and hydraulic fracturing happen within a few hundred feet of an active well: cases of methane in groundwater, spills from holding ponds filled with produced water from fracking, and so on. If the landowner owns the surface and mineral rights free and clear, and owns a large enough piece of property that effects on neighbors are unlikely, then most of the potential hazards from drilling and fracking are faced by the property owner who can weigh the trade-offs between the costs and benefits and negotiate reasonable protections within the lease with a developer. Actions taken by the developer in response to such a contract to mitigate the likely harm to the property-owner will also almost inherently serve to mitigate any possible harm to neighboring properties. If methane doesn’t migrate from the well into the groundwater immediately around the well, it can’t subsequently migrate across a property line some tens or hundreds of feet distant.

When a landowner borrows against the land, the lender naturally gains an interest in protecting the land’s valueas a tool to help ensure the loan’s repayment. In may be the case, as the article mentions, that the a lease enhances the value of a property and the resulting income makes loan repayment more likely. On the other hand, gas drilling and fracking may reduce the value of the surface property. The point is that – working in the context of contracts and property law –  landowners, lenders, and gas development companies have a natural interest in trying to work out these issues in an way that should naturally reflect most of the potential costs and benefits from exploitation of the shale resource.

Not every potential hazard will be well contained within a mortgage contract and a mineral lease. For example, the landowner may not care too much what the developer does with produced water from fracking operations so long as it is safely removed from her property. Other issues may depend on rights to surface water crossing a property or the contribution to any local air pollution hazards. In such cases liability rules and potential litigation by neighbors might be the efficient regulator, but government-provided regulation is also sometimes the efficient response.

I praise the New York Times article for highlighting (even if only indirectly) the way that decentralized decision making in the context of the rights and responsibilities attendant to property and contract law can serve to regulate environmental harm. The next step, from the view of government policy, is to refocus the efforts of government regulators on just those harms that are not well addressed within the scope of voluntary decentralized decisions.

[NOTE: For additional commentary on Urbina's NYT reporting on natural gas fracking, none of it laudatory, see this search of the KP archives.]

Posted in Energy markets, Environmental policy, Law, Regulation | Tagged , , , | Comments Off

h1

A Coasian look at pesticide and genetic drift

September 30, 2011

Michael Giberson

A few weeks back Lynne drew attention to an interesting property dispute between neighboring farmers in Minnesota, currently the subject of legal action (see news summary here, related court decision here). In brief, the issue is pesticide drift from conventionally farmed crops onto a neighboring organic farm, and whether the organic farm can sue the conventional farm for pesticide-drift trespassing. Appeals court says yes.

David Conner wrote about a very similar hypothetical case a few years back in “Pesticides and Genetic Drift: Alternative Property Rights Scenarios,” when considering a Coasian approach to resolving such issues:

Imagine the following hypothetical dispute between Cameron Conventional and Olivia Organic, two farmers with adjacent fields. Cam­eron is a cutting-edge, high-tech farmer, an early adopter of new technologies, making him a low­ cost producer of grains and legumes. “Back to the land” Olivia grows organic specialty orops for sale at a local farmers’ marker.

Someone tests an ear of Olivia’s sweet corn and determines that it is contaminated by pesticides and pollen from GE corn. Her upset consumers begin to boycott her. The belief that she is an organic producer is stripped away. She must now sell her produce conventionally at a much lower price. What are her options?

Conner then explores the case in “Coasian” fashion, considering various scenarios depending upon who would be the least-cost avoider of the conflict and who held what rights.

Posted in Economics, Environmental policy, Law, Regulation | Tagged , , | 2 Comments »

h1

Lomborg and Haab on light bulbs and technology

August 16, 2011

Lynne Kiesling

Thanks to Tim Haab for pointing us to this excellent observation from Bjorn Lomborg about innovation, regulation, and environmental quality:

Real reductions in carbon emissions will occur only when better technology makes it worthwhile for individuals and businesses to change their behavior. CFLs and other advances can take us part of the way, but there are massive technological hurdles to overcome before fossil fuels generally become less attractive than greener alternatives. …

Limiting access to the ‘wrong’ light bulbs or patio heaters, ultimately, is not the right path. We will only solve global warming by ensuring that alternative technologies are better than our current options. Then, people the world over will choose to use them.

Hear, hear.

Posted in Economics | Tagged , , | 1 Comment »

h1

Learn Liberty: Tragedy of the Commons

August 15, 2011

Lynne Kiesling

Here’s another great video from Learn Liberty: Sean Mulholland introducing the “tragedy of the commons”, which, as he accurately notes, is more accurately called the problem of open access. If you teach a class where you talk about this problem, or want to learn more about this fundamental ill-defined property rights foundation of environmental problems, this video is a good resource.

Posted in Economics, Environmental policy | Tagged , , | Comments Off

h1

Coase, legal liability, and pesticide drift

August 5, 2011

Lynne Kiesling

A ruling last week from Minnesota’s Court of Appeals provides an interesting case study in using common law and legal liability (a la Coase) in an environmental case. As summarized in the St. Cloud Times, the issue at hand is pesticide drift — when pesticide spray on one field is carried over to another field by wind. In the case of an organic farm, such pesticide drift has a significant economic cost, because the organic farmer cannot sell the affected produce, and may even have to take affected acreage out of rotation for several years to clear the pesticide and retain the foundation of the organic attribution (usually defined by law).

Here’s a bit more about the fact pattern:

The Johnsons turned their farm into an organic one in the 1990s to take advantage of the higher prices organic crops and seeds bring at market. They posted signs noting that the farm was organic, created a buffer between their property and neighboring farms and asked the co-op to take precautions to avoid overspraying, according to the Court of Appeals opinion.

But the co-op violated state law four times from 1998-2008 by spraying chemicals that landed on the Johnson’s organic farm, the opinion said. The opinion said that the co-op was cited four times by the Minnesota Department of Agriculture for violating pesticide laws that make it illegal to “apply a pesticide resulting in damage to adjacent property.”

A 2002 overspray led to the Johnsons selling their crops at lower, nonorganic prices and taking the tainted field out of production for three years. In 2005, 2007 and 2008, the overspray led the Johnsons to destroy alfalfa and soybeans and plow under and take out of production for three years parts of their fields, according to the Court of Appeals opinion.

What’s interesting to me about this case is the Johnsons’ use of the common law — they filed a lawsuit claiming nuisance and trespass. The district court found against them, but this appeals ruling negates that and sends it back to the district court:

The Court of Appeals opinion Monday decided that what the co-op did could be considered a trespass because it met the two elements necessary — that the Johnsons had rightful possession of their fields and that the cooperative’s unlawful spraying of the pesticide, causing it to drift onto the Johnsons’ otherwise chemical-free fields, constitutes an unlawful entry.

Looks to me like an application of Coase to the pesticide drift question — clarifying who has legal liability for the consequences of actions when those actions affect others, use of the common law concept of nuisance — with the result that the pesticide sprayer is liable for the costs of the consequences.

In a case like this, with two adjoining plots of land, the identification of the actors and the actions is pretty straightforward, so it’s a textbook low transaction cost case. But what happens if, say, the organic farm is adjacent to three other farms, and the issue is not pesticide drift, but is rather GMO propagation drift? If all four farms plant corn, but three of them plant the same strain of drought-resistant GMO corn, some seed propagation across property boundaries is likely. How do you assign liability with multiple potential actors? Is there a way to avoid such a cost, and if so, who is likely to be the least-cost avoider? Or more interestingly, since the GMO corn is drought resistant, how do you net out the beneficial effects of the need for less irrigation against the cost of the corn not being able to be sold as GMO-free any more?

I think I may have just identified a new case study for my fall environmental class …

Posted in Economics | Tagged , , , | 10 Comments »

h1

Virginia Postrel on light bulbs

June 10, 2011

Lynne Kiesling

If you have not caught Virginia Postrel in her new columnist gig at Bloomberg View, here’s a good chance, for Virginia’s column today is about U.S. federal light bulb regulation; both Mike and I have written about light bulb technology and the EISA 2007 “performance standard” that is leading to the disappearance of the 100-watt incandescent bulb from the market.

Virginia’s column addresses both the quality/aesthetics issues and the economic flaws of technology mandates, concluding that federal light bulb policy is not an efficient way to reduce electricity use. Instead, in bootlegger-and-baptist fashion:

… the activists offended by the public’s presumed wastefulness took a more direct approach. They joined forces with the big bulb producers, who had an interest in replacing low-margin commodities with high-margin specialty wares, and, with help from Congress and President George W. Bush, banned the bulbs people prefer.

It was an inside job. Neither ordinary consumers nor even organized interior designers had a say. Lawmakers buried the ban in the 300-plus pages of the 2007 energy bill, and very few talked about it in public. It was crony capitalism with a touch of green.

After a thorough discussion of the disappointing quality features of CFLs — poor light quality, lags in starting, shorter-than-advertised life spans (but not enough discussion of the lack of dimmability, which is my primary complaint), Virginia analyzes how this technology mandate fails to allow for consumer autonomy and choice in how to control and manage their own electricity use:

But banning light bulbs is one of the least efficient ways imaginable to attack those problems [air pollution or CO2 emissions]. A lamp using power from a clean source is treated the same as a lamp using power from a dirty source. A ban gives electricity producers no incentive to reduce emissions.

Nor does it allow households to make choices about how best to conserve electricity. A well-designed policy would allow different people to make different tradeoffs among different uses to produce the most happiness (“utility” in econ-speak) for a given amount of power. Maybe I want to burn a lot of incandescent bulbs but dry my clothes outdoors and keep the air conditioner off. Maybe I want to read by warm golden light instead of watching a giant plasma TV.

This. This is a large source of aggravation with regulation more generally, as well as a large source of the unintended consequences that inevitably accompany such regulation. The “government knows best” attitude that drills down too far and does not target the ultimate objective, which is reducing electricity use, both fails to deliver on its goal and is patronizing and condescending in the bargain. That’s a lose-lose policy … for everyone except for those big bulb producers who are the beneficiaries of this legislation.

Posted in Economics, Environmental policy | Tagged , , | 7 Comments »

h1

Hydraulic fracturing panel discussion at AEI

May 27, 2011

Michael Giberson

Kenneth Green hosted a panel discussion on the environmental consequences of hydraulic fracturing at the American Enterprise Institute. Panelists were: Ron Bailey of Reason Magazine, Mark Brownstein from the Environmental Defense Fund, Timothy Considine from the University of Wyoming, and Amy Mall of the Natural Resources Defense Council.

The video above is just a short sound bite by Ron Bailey, I couldn’t figure out how to embed the full video. Find the full video archived at the AEI website. Readers here who have followed the fracking posts will be familiar with many of the points discussed, but the video offers some sense of which environmental issues are currently seen as important.

Posted in Energy markets, Environmental policy, Regulation | Tagged , | Comments Off

h1

The UK’s commitment to carbon reductions?

May 16, 2011

Lynne Kiesling

I’ll be interested to see how the political, economic, and environmental consequences of this weekend’s new carbon approach in the UK unfolds; according to the Guardian (and the too-much BBC that I listen to):

Cabinet ministers have agreed a far-reaching, legally binding “green deal” that will commit the UK to two decades of drastic cuts in carbon emissions. The package will require sweeping changes to domestic life, transport and business and will place Britain at the forefront of the global battle against climate change.

The deal was hammered out after tense arguments between ministers who had disagreed over whether the ambitious plans to switch to more green energy were affordable. The row had pitted the energy secretary, Chris Huhne, who strongly backed the plans, against the chancellor, George Osborne, and the business secretary, Vince Cable, who were concerned about the cost and potential impact on the economy.

However, after the intervention of David Cameron, Huhne is now expected to tell parliament that agreement has been struck to back the plans in full up to 2027. He will tell MPs that the government will accept the recommendations of the independent Committee on Climate Change for a new carbon budget. The deal puts the UK ahead of any other state in terms of the legal commitments it is making in the battle to curb greenhouse gases.

Not surprisingly, reactions have been strong. Take the Telegraph’s outspoken James Delingpole, for example:

But if what it says is even half way true, then David Cameron has made the most unforgivably damaging decision of his entire political career. It will delay our economic recovery, lay waste the British countryside and cement Cameron’s reputation as a man driven not by principle (as, say, Margaret Thatcher and Winston Churchill were) but by a grubby, son-of-Blair urge to keep clinging on to power at no matter what cost to the country at large.

While I agree that it’s unwise to base expensive policy changes on inconclusive science and on a false belief in our ability to control outcomes in complex systems, that statement does seem a bit hyperbolic.

I think this is happening in the context of some other political machinations, and it may not play out exactly as reported in the Guardian. But since in some ways the UK is a bellwether of carbon policy, this should be interesting to watch — are renewables sufficiently economically and technologically developed to meet demand at prices that customers are willing to pay? Will retailers and customers in the UK be willing to explore/interested in exploring the combination of transactive digital technology and dynamic pricing that may modulate that demand relative to forecasts based on old technologies? Will this lead to the perpetuation of government subsidies of the sort that are currently being debated in the US?

Posted in Economics, Environmental policy | Tagged , , | 1 Comment »

h1

New atmospheric research on contrails

March 30, 2011

Lynne Kiesling

When I think about climate, greenhouse gases, carbon policy etc., I always worry about the certainty that people (typically politicians) want to attach to models (actually, that statement holds for macroeconomic models too, for the same reasons). The global climate is an incredibly complex system, comprising many individual agents and local systems that interact and lead to non-deterministic outcomes (thus the complexity, at least in part). In trying to understand such complex systems we construct models of their behavior. Even the best models are abstractions from some of the details of reality (as statistician George Box said, all models are wrong but some are useful).

Regarding climate, I’ve thought that the most with respect to clouds, and many different ways that clouds can affect climate. Capturing the effects of clouds in a model is difficult because there are so many variables — height, water vapor, etc. — and clouds have different effects depending on those variables and their interactions.

Thus I read with great interest at Ars Technica today about a new research study published in Nature Reports: Climate Change on the atmospheric effects of airplane contrails. Separate from any effects of the emissions from the combustion of jet fuel, the formation of contrails due to the production of water vapor as a by-product of burning jet fuel may itself contribute to greenhouse effects by increasing water vapor in the troposphere. According to the abstract:

An important but poorly understood component of this forcing is caused by ‘contrail cirrus’—a type of cloud that consist of young line-shaped contrails and the older irregularly shaped contrails that arise from them. Here we use a global climate model that captures the whole life cycle of these man-made clouds to simulate their global coverage, as well as the changes in natural cloudiness that they induce. We show that the radiative forcing associated with contrail cirrus as a whole is about nine times larger than that from line-shaped contrails alone. We also find that contrail cirrus cause a significant decrease in natural cloudiness, which partly offsets their warming effect. Nevertheless, net radiative forcing due to contrail cirrus remains the largest single radiative-forcing component associated with aviation.

While I remain cautious in drawing inferences from models of such complex systems, I think research like this at least gives us some insights into the dynamics of how a local system like cloud formation works; in particular, the “substitution” that occurs with the reduction in natural cirrus formation was something I always wondered about. Worth reading.

Posted in Economics, Environmental policy | Tagged , , | 4 Comments »

Older Entries »
Follow

Get every new post delivered to your Inbox.

Join 50 other followers