New Environmental Economics Blog

Lynne Kiesling

I am enjoying the relatively new Environmental Economics blog. It will be particularly useful in my Environmental Economics course in the fall, especially this post on cost-benefit analysis. It starts with a point that I always go out of my way to demonstrate graphically and mathematically: because of the existence of tradeoffs/opportunity costs, the optimal level of pollution is not zero.

A recommended read.

2 thoughts on “New Environmental Economics Blog”

  1. Catching my eye: morning A through Z

    Since I have no interest whatsoever in the PlameGate goings-on and I don’t honestly care who the senators from Pennsylvania are, it’s been pretty slim pickings in the blogosphere today. A few things did catch my eye: Read Froggie’s post,…

  2. It appears that we are moving toward another attempt to establish “environmental externalities costs”.

    Ken Malloy at CAEM is proposing a “litmus test” for proposals regarding electric competition which includes: 4. Generation decisions (building and producing) are driven purely by market forces, which include the cost of externalities in the prices to customers (externality defined http://tinyurl.com/drrnq).
    5. Consumption decisions are driven purely by market forces in which customers have access to relevant data and information and prices include the cost of externalities.
    Easy for him to say!

    Last time around the environmental externalities issue (10-15 years ago), the advocates could not agree whether to impute the costs based on control “costs” or damage “costs”, no less on the level of costs to impute in either regime. Control “costs” were often based on unrealistic estimates of capital and operating costs for control technologies which had not been demonstrated commercially. Damage “costs” were often subject to extremely wide variation, depending on who was doing the estimating and their value systems.

    Some of the technologies which had not yet been demonstrated commercially then are now in commercial use (stack scrubbers for SOx). Other technologies which would likely be a focus today (CO2 fixation) have not yet been demonstrated; and, would likely be subject to widely varying estimates of their “costs”. The estimates of the damage costs of CO2 emissions are also subject to wide variations. The costs of some emissions (VOCs and NOx) cannot be analyzed separately, because of their environmental interactions. However, these costs are subject to market determination through cap and trade programs.

    Some of the externalities issues may not be subject to satisfactory resolution. I cannot imagine agreement on the environmental externalities costs of nuclear power generation, for example, within my lifetime. Establishing the environmental externalities costs of wind generation will also be difficult, since the issue includes “visual” and “noise” pollution, as well as the “cost” of “bird kill” by the wind turbines. (For example, it appears that the “cost” of visual pollution within sight of Hyannis Port and Martha’s Vineyard may be substantially higher than in other potential wind generator locations. There may also be a wide variation in the values assigned to dead pigeons or seagulls vs. the values assigned to dead hawks, falcons or eagles.)

    Then, when those difficult issues are resolved, we can deal with the simpler issues, like the value of human life, which may perhaps vary depending on progression along the conception to interrment continuum and other “quality of life” factors.

    However, in the process, we may also determine how many angels can dance on the head of a pin.

    As a science fiction fan, I can imagine a world in which these issues could be resolved purely by scientific analysis (though it strains my brain) or experimental economics (wink). As a sexagenarian techie, I cannot imagine it happening in this world. However, the process should be fun to watch! “Send in the clowns.”

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