Priorities for Environmental Expenditure

The South African government has released the Medium Term Strategic Framework

a framework to guide government's programme in the electoral period 2009-2014. This is what the report has to say on the environment:

 

The main objective of government is to encourage sustainable resource management and use by focusing on various interventions including the diversification of the energy mix in pursuance of renewable energy alternatives and promotion of energy efficiency; adopting waste reduction practices by encouraging the re-use of waste outputs as productive inputs; enforcing zero tolerance approach to illegal and unsustainable exploitation of resources; improving air and atmospheric quality for health and well being of citizens; supporting local and sustainable food production; sustainable water use and preserving quality of drinking water and enhancing biodiversity and the preservation of natural habitats.

The focus is on energy efficiency and renewables, waste, exploitation of natural resources, air quality and health, water use and quality, biodiversity and natural habitats. No specifics, such as targets, timeframes and allocations are mentioned. The report does include a list of programmes, but do not appear conclusive:

Establishing a National framework response on climate change mitigation and adaptation whilst maintaining our reputation as a global player

A common system for environmental impact management across government in developing the Environmental Impact Management Strategy that will ensure improved efficiency and effectiveness

Implementing the Water for Growth and Development strategy: strengthening institutional capacity for water management so that water scarcity is not exacerbated by ineffectual management, and finding the right mix of mechanisms to effect change in behaviour including regulatory, self-regulatory, market-based instruments and awareness and education. Projects such as the Mokolo River Augumentation Project and the Lower Sunday’s river aimed at improving water availability and irrigation especially for poor farmers and providing Previously Disadvantaged Users access to user rights will continue

Finalise a policy process on market-based instruments such as taxes, charges and incentives that can be used to promote environmental protection and biodiversity conservation

Implementation of the National Framework for Sustainable Development to ensure that the country follows a sustainable development trajectory for now and into the future

Promote innovation and diversification towards alternative production of resources

To pursue and explore further the concept of Green Jobs including scaling up labour intensive natural resources management practices that contribute to decent work and livelihood opportunities. In particular projects and industries are being pursued in the fields of marine aquaculture development, wildlife management, waste services and ecosystems rehabilitation programmes

Efforts to meet the energy efficiency target of 12% by 2015 and renewable energy target of 10 0 GWh by 2013, will be enhanced by creating an enabling environment for renewable energy, through for example implementing the renewable energy feed-in tariff and building the local renewable energy manufacturing capacity

Effectively managing and allocating the radio frequency spectrum, which is a finite and scarce national resource, prioritising the allocation of the spectrum for developmental purposes.

Growth and greenhouse gases: no decoupling (yet?)

Almost a year and a half ago this is what we quoted from an article posted on Project Syndicate (see earlier post on decoupling):

"...the solution to the challenge of global climate change is as plain as day. The only chance of improvement is to decouple economic growth from energy consumption and emissions. This must happen in the emerging countries, and even more urgently in the old industrial economies."

The "only chance of improvement" does not show convincing signs of ...eh... improvement yet. New research shows that 1% growth in the economy corresponds to 0.8% growth in greenhouse gas emissions. Very few countries diverge too much from this norm. 

Link to full paper

H/T: Scitizen.

Soybean oil

Just after coffee on a slow Monday morning. 

From a new paper "The Life-cycle Carbon Footprint of Biofuels": 

Our results indicate that soybean biodiesel production, despite its high savings from a pure engineering perspective, dramatically increases greenhouse gas emissions compared to conventional diesel when factoring in emissions from land use change across a broad range of assumptions.

Carbon emissions: what is a fair share?

The debate on who should take responsibility for climate change is heating up.  Industrialised nations want developing countries to accept reduction targets as well.  This brings renewed interest in the question how to compare emissions across nations.  The World Resources Institute for example proposed differentiated per capita greenhouse gas emissions targets to counter the obvious inequitable outcomes of absolute emission targets.  Moving beyond this proposal is another option published in PNAS to link responsibility of climate change to individuals instead of nations.  This means that all of the world's high emitters are treated the same regardless where they live. 

This is good news for Africa, which as a result of a large number of carbon poor people, can emit more, and thus, have some space to grow. High carbon intensity and inequality in countries like South Africa is not good news for rich people who will have to accept deeper then average cuts under such a framework.

Education in systems thinking

Systems thinking is not something I associate with following a standard education. In fact, it is something that bring memories of a long and painful process of unlearning...

Now, look at this:

6th grade overarching question: What is the architecture of a dynamic system?

7th grade overarching question: What are the big systems that order our world?

8th Grade overarching question: How do we contribute to and transform dynamic systems?

This is from an on-line curriculum Quest to Learn from the Institute of Play.

Fascinating.

H/T: Plektrix.

ERE conference papers on the web

The presentations from the ERE conference held in Cape Town 20-21 May have been uploaded on SANBI's website.  

Investing in ecosystems

Economists have long assisted with valuing the world's natural assets and ecosystems. To create functional markets to exchange this value is the next step. I agreed to talk on this in the local context of the fynbos biome....

“After all those cosy years of working together,  show me the money”: 

From economic valuation to real-world investment in the fynbos biome

Key words: economic valuation, ecosystems, fynbos, decision making, institutional processes and arrangements

The last decade has seen several studies demonstrating the economic value of ecosystems and the fynbos biome is no exception.  Despite notable criticism on some of these studies, on average they have succeeded in raising the awareness on the value of well-functioning ecosystems.  In some instances this has led to conservation and restoration success on the ground, but what is needed is an institutional system that will translate abstract economic values into real financial investments in ecosystems. With continued increased pressure on the world’s biodiversity on the one hand and shifting agendas towards climate change and a rather reductionist and in practice partial ecosystems goods and services (EGS) analysis on the other, economists and ecologists need to build on their successes and find new meaning in their work on total systems value, as opposed to a focus on total economic value (TEV) or an EGS analysis only.  Economists and ecologists would also do well by soliciting the services of those who can assist in the development of new institutional processes and arrangements that can capture the real financial benefits of well-functioning ecosystems beyond the usual short-term and consumptive benefits.  Based on a analysis of current bottlenecks to realise real-world investments in specifically fynbos ecosystems, an action-orientated agenda focussed on performing economic valuation studies to better serve the needs of decision makers, an increased understanding of and leverage of total systems value, and a renewed focus on the institutional process and arrangements to capture fynbos ecosystem values, is proposed.  

Another view on green jobs

With the emergence of a Global Green New Deal, the question whether government investments and stimulus packages in greenery will pay off is very prominent (see also earlier post on a damning report by the Institute of Energy Research in the US on green jobs for example). 

A study by the Pew Centre emphasised that jobs in the clean energy economy were growing faster then overall jobs, as  reported in an article on SocialFunds.Com:

Despite a lack of sustained government support between 1998 and 2007, the number of jobs in the emerging clean energy economy grew nearly two and a half times faster than the overall job market during that time. According to a report by the Pew Center on the States, jobs in the clean energy economy grew at a rate of 9.1% during that time, compared to a rate of 3.7% in traditional jobs.

and, what is more intriguing is that 

...job growth in the clean energy economy occurred without significant government engagement. However, recent developments such as funds for clean energy provided by the American Recovery and Reinvestment Act of 2009 (ARRA) show promise for rapid growth in the field. The stimulus bill provides $85 billion in spending for energy and transportation, and includes $21 billion in tax incentives for renewable energy, as well as more than $30 billion for spending on a variety of clean energy programs. 

The net costs of these jobs over time remains an important question (see also here for an experience with renewable energy in Spain).

Electricity generation and scale

Yesterday we pointed out that South Africa's share of electricity generation when compared to China has declined rapidly. Today a graph telling something about scale; for the years 2002-2007 China's growth in electricity generation was more then the total amount of electricity generated in South Africa. The scale at which electricity is generated in China dwarfs the relative minor contributions from smaller developing nations such as South Africa.

South Africa's declining share of electricity generation and responsibility for climate change

Based on numbers produced in the recently released BP Statistical Review of World Energy 2009 we did an analysis on South Africa's relative share of electricity generation. South Africa generates around 1.3-1.4% of the world's electricity and this number has been relatively stable from 1990 up to 2008. However, when expressed as a percentage of electricity generated in the BRIC countries and in China a different picture emerges.  In 1990 South Africa produced almost 27% of the amount of electricity that China generated, but this has declined rapidly to only 8% in 2008. In comparison to the BRIC countries this declining share is less dramatic, from 7.5% in 1990 to 4.8% in 2008.

Although not a direct proxy for greenhouse gas emissions over time, these numbers provide some important insights in South Africa's relative responsibility to mitigate against the emissions of greenhouse gases when compared to other developing countries.

Training Manual: Economic Instruments for Environmental and Natural Resource Management

From the UNEP’s Division of Environmental Policy Implementation (DEPI) and the Economics and Trade Branch (ETB) of the Division of Technology, Industry and Economics (DTIE) - a jam-packed training manual on the use of economic instruments for environmental and natural resource management.

The Training Manual builds on a report on ‘The Use of Economic Instruments in Environmental Policy: Opportunities and Challenges’ published by UNEP in 2004 and on a range of standard literature on environmental economics. The 2004 report was prepared under the auspices of the UNEP Working Group on Economic Instruments consisting of twenty-five developed and developing country experts from research institutions, relevant international and non-governmental organization and governments. 

Recovery of damaged ecosystems

From open access journal PLOS One this study on the ability of ecosystems to recover after major perturbations:

Rapid Recovery of Damaged Ecosystems

Background

Recent reports on the state of the global environment provide evidence that humankind is inflicting great damage to the very ecosystems that support human livelihoods. The reports further predict that ecosystems will take centuries to recover from damages if they recover at all. Accordingly, there is despair that we are passing on a legacy of irreparable damage to future generations which is entirely inconsistent with principles of sustainability.

Methodology/Principal Findings

We tested the prediction of irreparable harm using a synthesis of recovery times compiled from 240 independent studies reported in the scientific literature. We provide startling evidence that most ecosystems globally can, given human will, recover from very major perturbations on timescales of decades to half-centuries.

Significance/Conclusions

Accordingly, we find much hope that humankind can transition to more sustainable use of ecosystems.

Citation: Jones HP, Schmitz OJ (2009) Rapid Recovery of Damaged Ecosystems. PLoS ONE 4(5): e5653. doi:10.1371/journal.pone.0005653

Population growth rates per country

From the encyclopedia of earth figures on the latest population growth rates per country.

South Africa? 0.28%!

Fertility rate for South Africa is 2.43 births per women, just above the global replacement fertility rate of 2.33 children per women, and possibly well below the replacement fertility rate for a developing country such as South Africa burdened with high premature mortalities.

What are the implications? Medium to longer term population decline and serious questions whether a declining population can maintain the economic system. This is essence is not good news for South Africa's extensive social welfare system as well as the sustained flow of future pension payments.

Time for national policies to reverse declining populations? In the local context, that will be an interesting environment - social welfare debate.

Natural resource amenity and life expectancy

Better natural resource amenities increase life expectancy. That makes it a issue worthwhile of public health investment. Do not believe me? Well, here is a paper arguing just that (at least based on county level data in (I assume) the US):

Evaluating natural resource amenities in a human life expectancy production function

This study examined the effect of natural resource amenities on human life expectancy. Extending the existing model of the life expectancy production function, and correcting for spatial dependence, we evaluated the determinants of life expectancy using county level data. Results indicate that after controlling for socio-demographic and economic factors, medical facilities and risk factors, counties with natural amenities such as high proportion of land in forests, farmland, rangeland and water bodies, as well as mild climate such as longer sunlight hours during winter and cooler year around temperature exhibited longer life expectancies at birth. In addition, counties containing state parks and outdoor recreation facilities, and those located near federal wilderness parks were associated with the longer expectancies at birth. Findings from this study have several implications for natural resource economics and management, public health, and human development. An important message of our findings is that the traditional approach of public health should be extended beyond just controlling diseases or treating patients to a more comprehensive approach that also acknowledges the preservation and utilization of natural resources, environmental amenities, and outdoor recreation opportunities in maintaining public health, quality of life, and overall human development.

Keywords: Life expectancy; Natural resource amenities; Spatial error model; Production function; Public health

 

ERE conference Cape Town

For the first time in almost a decade South Africa had its own Environmental & Resource Economics conference. 

I scribbled down a few notes:

1. Sometimes one needs to speak a hard language to reach soft targets. Speaking in terms of rands and cents can help achieve objectives of care and justice. Economics can be used for the good. It is not only a throwing of "the bones". Really.

2. The narrative to see the environment as a provider of goods and services in support of human well-being is well-entrenched. 

3. Watch those numbers! Flow values, stock values, net present values, discounted values, operational costs etc etc. Always compare apples with apples.

4. Seems like we need a fresh injection of institutional economics to support an analysis on the creation of viable institutions that can support the development of markets in ecosystems services. 

5. The transition from no markets to full PES markets rises many questions on the speed, timing and focus of market reform.  There should be some good learning somewhere in the historical development of financial markets and the transition from communism to market-economies.

6. Talking about payments for ecosystems services (PES); it is not a macro-developmental concept yet, but the signs are encouraging.  With still comparable low values to water and carbon services generated in rural areas, volumes and scale factors remain crucial for success.

7. Be cautious on how much PES at the end will help the rural poor. Do not oversell. Power traps can be deeply entrenched.

8. With increased scarcity of ecosystems good and services, investment in understanding how the "ecosystem supply factory" is working makes sense. More integrated socio-ecological systems modelling.

9. ERE operates in context. Valuation is a means to and end. Economic analysis and modelling is one input to the decision-making process. Invest in understanding where this can achieve the highest leverage.

It was a great event.

 

Biodiversity conservation values and income

A new paper Are There Income Effects on Global Willingness to Pay for Biodiversity Conservation? by Jette Bredahl Jacobsen and Nick Hanley sheds some light on the question how biodiversity conservation values are related to income:

Abstract  This paper is concerned with the empirical relationship between biodiversity conservation values and income. We use random effects panel models to examine the effects of income, and then GDP per capita, on willingness to pay for habitat and biodiversity conservation. In a meta-analysis, 145 Willingness To Pay estimates for biodiversity conservation where existence value plays a major role were collected from 46 contingent valuation studies across six continents. Other effects included in the meta-analysis were the study year; habitat type; continent; scope as presented to respondents; whether WTP bids were for preventing a deterioration or gaining an improvement in conservation, whether a specific species or specific habitat was protected; whether the questionnaire used a dichotomous choice or an open-ended format; distribution format; and the choice of payment vehicle. GDP per capita seemed to perform as well as an explanatory variable as respondent’s mean stated income, indicating that it is wealth in society as a whole which determines variations in WTP. Even if large variation, our main conclusion is, that the demand for biodiversity conservation rises with a nation’s wealth, but the income elasticity of willingness to pay is less than one.

Why scientists and decision makers need intermediaries

From my ScienceDirect feeds this morning:

Fuzzy Adaptive Decision-making for Boundedly Rational Traders in Speculative Stock Markets

The development of new models that would enhance predictability for time series with dynamic time-varying, nonlinear features is a major challenge for speculators. Boundedly rational investors called “chartists” use advanced heuristics and rules-of-thumb to make profit by trading, or even hedge against potential market risks. This paper introduces a hybrid neurofuzzy system for decision-making and trading under uncertainty. The efficiency of a technical trading strategy based on the neurofuzzy model is investigated, in order to predict the direction of the market for 10 of the most prominent stock indices of U.S.A, Europe and Southeast Asia. It is demonstrated via an extensive empirical analysis that the neurofuzzy model allows technical analysts to earn significantly higher returns by providing valid information for a potential turning point on the next trading day. The total profit of the proposed neurofuzzy model, including transaction costs, is consistently superior to a recurrent neural network and a Buy & Hold strategy for all indices, particularly for the highly speculative, emerging Southeast Asian markets. Optimal prediction is based on the dynamic update and adaptive calibration of the heuristic fuzzy learning rules, which reflect the psychological and behavioral patterns of the traders.

An efficient heuristic for reliability design optimization problems

This paper develops an efficient heuristic to solve two typical combinatorial optimization problems frequently met when designing highly reliable systems. The first one is the redundancy allocation problem (RAP) of series-parallel binary-state systems. The design goal of the RAP is to select the optimal combination of elements and redundancy levels to maximize system reliability subject to the system budget and to the system weight. The second problem is the expansion-scheduling problem (ESP) of multi-state series-parallel systems. In this problem, the study period is divided into several stages. At each stage, the demand is represented as a piecewise cumulative load curve. During the system lifetime, the demand can increase and the total productivity may become insufficient to assume the demand. To increase the total system productivity, elements are added to the existing system. The objective in the ESP is to minimize the sum of costs of the investments over the study period while satisfying availability constraints at each stage. The heuristic approach developed to solve the RAP and the ESP is based on a combination of space partitioning, genetic algorithms (GA) and tabu search (TS). After dividing the search space into a set of disjoint subsets, this approach uses GA to select the subspaces, and applies TS to each selected subspace. Numerical results for the test problems from previous research are reported and compared. The results show the advantages of the proposed approach for solving both problems.

Exploiting human fear

I am reading Dan Gartner's book Risk. The Science and Politics of Fear. This books contains fantastic observations on humankind's inability to fully comprehend and understand the risks we face. One aspect that really attracted my attention is the observation that the "marketing of fear" is not something only for marketing types. Scientists are also affected. Quoting from p180: 

The competing demands of being accurate and being heard can be particularly hard on scientists. Quoting Stephan Schneider: On the one hand, as scientists we are ethically bound to the scientific method, in effect promising to tell the truth, the whole truth and nothing but, - which means that we must include all the doubts, the caveats, the ifs, ands and buts. On the other hand, we are not just scientists, but human beings as well. And like most people we'd like to see the world a better place... To do that we need to get some broad-based support, to capture the public's imagination. That, of course, means getting loads of media coverage. So we have to offer up scary scenarios, make simplified, dramatic statements, and make little mention of any doubts we may have.

Explains a lot of scary headlines these days.

Beyond sustainability

A rapidly changing world forces us to re-examine our points of departure. The concept of sustainable development or sustainability is just one of these concepts due for a rethink. Crises breed such opportunities (see earlier post on the benefits of being gloomy) and several suggestions are currently being put forward. One of them is resilience. 

This article in Foreign Policy by Jamais Cascio at his blog Open the Future describes the concept of resilience as one the next big things. A few quotes:

Sustainability is a seemingly laudable goal, it tells us we need to live within our means, whether economic, ecological, or political but it is insufficient for uncertain times. How can we live within our means when those very means can change, swiftly and unexpectedly, beneath us?

...

Sustainability is inherently static. It presumes there is a point at which we can maintain ourselves and the world, and once we find the right combination of behavior and technology that allows us some measure of stability, we have to stay there.

...

Resilience, conversely, accepts that change is inevitable and in many cases out of our hands, focusing instead on the need to be able to withstand the unexpected. Greed, accident, or malice may have harmful results, but, barring something truly apocalyptic, a resilient system can absorb such results without its overall health being threatened.

...

Ultimately, resilience emphasizes increasing our ability to withstand crises. Sustainability is a brittle state: Unforeseen changes (natural or otherwise) can easily cause its collapse. Resilience is all about being able to overcome the unexpected. Sustainability is about survival. The goal of resilience is to thrive.

Change and surprise is inevitable. We have to learn how to deal with it much better.

Reflecting on political loyalism in Rome

I am on a working trip in Rome and following the SA election news on a distance. Despite so much that happened in South Africa, an influencial newspaper states that no major changes are expected, despite huge discontent on the achievements of the ruling party. 

Why? Loyalism to liberation movements? Identity politics? Or just a case that most people still vote for the ruling party as there are no other options?

A participant in the meeting I am in provides some cold comfort: UK voters also voted Labour even when Tony Blair was quite unpopular.  

Back to work...

Resilience Economics

From the Open The Future Blog as quoted on Resilience Science:

Resilience economics continues to uphold the elements of previous economic models that offer continued value: freedom and openness from capitalism at its best; equality and a safety net from socialism's intent. But it's not just another form of "mixed economy" or "social democracy." The focus is on something entirely new: decentralized diversity as a way of managing the unexpected.

Decentralized diversity (what we sometimes call the "polyculture" model) means setting the rules so that no one institution or approach to solving a problem/meeting a need ever becomes overwhelmingly dominant. This comes at a cost to efficiency, but efficiency only works when there are no bumps in the road. Redundancy works out better in times of chaos and uncertainty -- backups and alternatives and slack in the system able to counter momentary failures.

It generates less wealth than traditional capitalism would, at least when it was working well, but is far less prone to wild swings, and has an inherent safety net (what designers call "graceful failure") to cushion downturns.

Systems Thinking: The Ben Okri Way

There is a famous story of a chief who ordered all the frogs to be killed because they disturbed his sleep. The frogs were killed and he slept well till the mosquitoes came and destroyed his kingdom. His people fled the realm because of the diseases the mosquito brought and what was once a proud land became an empty waste.

A passage from Infinite Riches authored by Ben Okri. 

He must have been inspired by Dr. Suess.

Environmental economic soul searching

From the by now legendary environmental economic blogger John Whitehead a comment on the love and hate between environmentalists and environmental economists, posted on Energy Collective:

With limited resources, households, business firms and governments must make choices. If I have a fixed amount of money and I’m choosing between a monthly payment on a luxury sedan or a less expensive but more mundane sedan, I might forgo the big TV set and go with the higher payments on the luxury sedan. Part of the cost of the luxury sedan is the foregone benefit of the TV set. Economists see these so-called “opportunity costs” all over the place and we delight in our ability to do that. It is what makes us special … 

… but not so huggable. Finding these costs is what gets us into so much trouble with environmentalists. Environmentalists tend to see only the good, what economists call benefits, in environmental policies. Environmental economists see the good and the bad (i.e., the costs). Since environmental economists and environmentalists essentially agree on the good stuff (but, see below), the only thing left to discuss is the costs. We bring up the costs and environmentalists seem to go ballistic about how evil we are (even when we explicitly state that there are enormous benefits to certain environmental policies).

Yes, that does sound familiar. We are the people that often just have to open the cold showers.

Read the full article here.

H/T: Environmental Economics

A solution for Africa's natural resource curse?

A new report Breaking the Curse by the Open Society Institute of Southern Africa, Third World Network Africa, Tax Justice Network Africa, Action Aid International, and Christian Aid performed a study on mining taxation and transparency in seven African countries, including Ghana, Tanzania, Sierra Leone, Zambia, Malawi, South Africa, and the Democratic Republic of Congo (DRC). 

The central argument made by the report is that African governments have not been able to optimize the mining tax revenue due to them before the 2003 to 2008 price boom; neither have they been able to capture the anticipated windfalls during the price boom. This argument is grounded on two main reasons: (i) Mining companies operating in Africa are granted too many tax subsidies and concessions (ii) There is high incidence of tax avoidance by mining companies conditioned by such measures as secret mining contracts, corporate mergers and acquisitions, and various ‘creative’ accounting mechanisms. These two factors coupled with inadequate institutional capacity to ensure tax compliance contribute in a large measure to diminish the tax revenue due to African governments.tax revenue from the mining industry. 

The report highlights how to improve the situation from a state-revenue side. This is only one part of the story though. More money into state coffers can help address development objectives, but certainly does not guarantee it. Maybe a follow-up report on how government efficiency and transparency is needed to responsibly invest these revenues in meeting development objectives? (see also AfriMap for existing initiatives in this regard).

Climate policy and international trade

Policy instruments that are currently evaluated for a future climate policy regime include restrictions on international trade.  Some developed nations with stricter greenhouse gas reduction targets and policies argue that disincentives such as border measures for carbon-intensive production in other nations are needed. China, for instance, proposed that carbon should be disincentivised not at production, but when consumed. 

The international trade regime, however, is also an important consideration in this debate. A new paper Climate Policy Options and the World Trade Organisation foresees conflicts with WTO rules:

This paper examines whether the climate policy options policymakers are contemplating are compatible with core principles of the world trading system set forth in the General Agreement on Tariffs and Trade (GATT), the World Trade Organization (WTO), and Appellate Body decisions. The authors argue that border measures—both import restrictive measures and export subsidies—contemplated in US climate bills and the climate policies of other countries stand a fair chance of being challenged in the WTO. Given the prospect of foreseeable conflicts with WTO rules, the authors suggest that key WTO members should attempt to negotiate a new code that delineates a large “green space” for measures that are designed to limit GHG emissions both within the member country and globally. By “green space,” the authors mean policy space for climate measures that are imposed in a manner broadly consistent with core WTO principles even if a technical violation of WTO law could occur. To encourage WTO negotiating efforts along these lines, the authors recommend a time-limited “peace clause” to be adopted into climate legislation of major emitting countries. The peace clause would suspend the application of border measures or other extraterritorial controls for a defined period while WTO negotiations are under way. 

Environment slips in the rankings

From a recent Gallup poll:

For the first time in Gallup's 25-year history of asking Americans about the trade-off between environmental protection and economic growth, a majority of Americans say economic growth should be given the priority, even if the environment suffers to some extent.

This follows an earlier poll:

Although a majority of Americans believe the seriousness of global warming is either correctly portrayed in the news or underestimated, a record-high 41% now say it is exaggerated. This represents the highest level of public skepticism about mainstream reporting on global warming seen in more than a decade of Gallup polling on the subject.

Before jumping to conclusions, please read the results of a Harris poll as well:

As the economic crisis continues, some other issues may be put on the back burner as the government focuses on getting the economy back on its feet. One such issue could be environmental conservation, but 46% of Americans say that the issue of environmental conservation is something that is more important to them personally than it was a few years ago while 47% say it is no more or less important. Just 7% of Americans say it is less important to them. Furthermore, most people do not believe the government needs to choose between the economy and the environment and that the government should be making more of an effort to be environmentally conscious. 

Is this maybe an indication of some important nuances developing in perceptions about the environment? Or just a straightforward polarisation?

On crises and the oversupply of bad news

Crises is a word that became part of our daily vocabulary in recent months. It can be defined as a time of intense difficulty, trouble or danger. It also seems as if there is an incentive (at least in some circles) to keep the fires of crises burning. Or to put it differently: bad news sells. 

Julian Simon, renowned resource optimist had this to say in an article in Science on the question why bad news dominate public discussion on topics such as natural resources, population and the environment, way back in 1980:

Why do false statements of bad news dominate public discussion of these topics? Here are some speculations. 

1) There is a funding incentive for scholars and institutions to produce bad news about population, resources, and the environment. The AID and the U.N.'s Fund for Population Activities disburse more than a hundred million dollars each year to bring about fertility decline. Much of this money goes to studies and publications that show why fertility decline is a good thing. There are no organizations that fund studies having the opposite aim.

2) Bad news sells books, newspapers, and magazines; good news is not half so interesting. Is it a wonder that there are lots of bad-news best-sellers warning about pollution, population growth, and natural-resource depletion but none telling us the facts about improvement?

3) There are a host of possible psychological explanations for this phenomenon about which I am reluctant to speculate. But these two seem reasonably sure: (i) Many people have a propensity to compare the present and the future with an ideal state of affairs rather than with the past or with some other feasible state; the present and future inevitably look bad in such a comparison. (ii) The cumulative nature of exponential growth models has the power to seduce and bewitch.

4) Some publicize dire predictions in the idealistic belief that such warnings can mobilize institutions and individuals to make things even better; they think that nothing bad can come of such prophecies. But we should not shrug off false bad news as harmless exaggeration. There will be a loss of credibility for real threats as they arise, and loss of public trust in public communication. As Philip Handler, president of the National Academy of Sciences, testified to congressmen. in the midst of the environmental panic of 1970: "The nations of the world may yet pay a dreadful price for the public behavior of scientists who depart from . . . fact to indulge ... in hyperbole".

Why does bad news flourish? In short, according to Simon,  due to R&D funding and media incentives, idealistic/utopian expectations of reality and a (dangerous) sense that communicating a crises/alarmism will lead to action or at least will not be harmful.

My apologies for not being able to finish this post. I have to run, have a project crises to attend to...

H/T: The Encyclopedia of the Earth

Image: tralfaz-archives

The Geotourism Challenge 2009

Ashoka's Changemakers in collaboration with National Geographic are searching for innovations that protect destination quality through tourism that "sustains or enhances the geographical character of a place — its environment, culture, aesthetics, heritage and the well-being of its residents.” In Africa there are many such opportunities, so let us see if Africa can gain in prominence with more entries to The Geotourism Challenge 2009: Power of Place with Entry Deadline on 20 May 2009.

Some of the past African nominations:
Fair Trade in Tourism , South Africa: nomination
Urban Walkabout , South Africa: nomination
Campi ya Kanzi, Kenya
Bulungula Lodge, South Africa: nomination

See also a related Changemakers Competition

Water pricing: insights from Harvard

It has been argued on this blog ("Should water be priced according to its market value?", "On the municipal price of water") that water pricing is an important policy instrument to manage water scarcity and risks.

A recent blogpost (As reservoirs fall, prices should rise) from Prof. Robert Stavins, environmental economist at Harvard University again states this clearly in the US context:

Throughout the United States, water is under-priced.  Efficient use of water will take place only when the price reflects the actual additional cost of making that water available.  Lest one fear that higher water rates would mean that Americans would go thirsty, take note:  On average, each of us uses 183 gallons of water a day for drinking, cooking, washing, flushing, cleaning, and watering, but less than 5% of that is for drinking and cooking combined.  There is plenty of margin for change if people are given the right price signals.

Fifty years of economic analyses have demonstrated that water demand is responsive to price changes, both in the short term, as individuals and firms respond by making do with less, and in the long term, as they adopt more efficient devices in the home and workplace.  For example, when Boulder, Colorado moved from unmetered to metered systems, water use dropped by 40% on a sustained basis.

But prices are typically set well below the social costs of the water supplies, since historical average costs are employed, rather than true additional (marginal) costs of new supplies.  Although water scarcity typically develops gradually across seasons of low rainfall and low accumulations of snow pack, pronounced droughts are usually felt in the summer months of greatest demand.  The economically sensible approach is to charge more at these times, but such “seasonal pricing” is practiced by less than 2% of utilities across the country.

A reasonable objection to jacking up the price of water is that it would hurt the poor.  But we can take a page from the play book of electric utilities who subsidize the first kilowatt-hours of electricity use with very low “life-line rates.”  Indeed, the first increment of water use can be made available free of charge.  What matters is that the right incentives are provided for higher levels of usage.

Climate Change: South Africa's options

The South African government is currently hosting a climate change summit. According to the designated website the purpose and objectives of the summit are as follows:

PURPOSE

The purpose of the Climate Change Summit 2009 is to:

• Provide all key climate change response stakeholders with an update on the most recent climate change research and other current South African initiatives and interventions; and
• Provide a platform for all key climate change response stakeholders to discuss and agree the framework for a National Climate Change Response Policy that includes, among others, fiscal, regulatory and legislative packages as well as sectoral implementation plans.

OBJECTIVES

By the end of the summit –

• All key climate change response stakeholders have a common understanding of the most recent climate change research and other South African climate change response initiatives and interventions;
• A detailed policy framework (comprehensive annotated table of contents) is broadly supported;
• The roles and responsibilities of sector departments in respect to the development of the sector policy components is agreed;
• All policy development timelines and milestones are agreed;
• The implications and intentions of all policy directions are understood.

On this blog this topic has also been discussed in bits and pieces. A short synthesis that may help in further debating South Africa's options:

- CDM may be an obstacle rather then a solution to climate stabilisation. Yes, it may offer some benefits and help finance reduction of greenhouse gases, but CDM has not (yet?) made a discernable impact in Africa. CDM may prove to be a stepping stone towards a more efficient multi-lateral market on carbon credits in the medium to longer term.

- Adaptation is the name of the game in Africa. Africa contributes little to overall greenhouse gases and is most vulnerable to climate change. With persistent poverty and increasing socioeconomic vulnerability, no climate change response strategy worthy its salt will ignore or only pay lip service to strengthening adaptive capacity. Let's not forget adaption.

- In South Africa we have a few very large greenhouse gas emitters. Eskom is the second highest CO2 emitting power company in the world. South Africa has a high energy and carbon intensive economy. This suggests that environmental effectiveness and efficiency gains are most likely be possible, but the risks of not doing anything need to be included in a future strategy. Increasing climate risks may start affecting planned expansions in coal-fired power stations (see also here and related story from the World Bank here). The point is that coal-fired power is an increasing risky business. These risks need to be reflected within a country development and company strategy, not only in a national climate response strategy.

- The pertinent question is at what cost greenhouse gases can be reduced. Marginal cost curves for greenhouse gas reduction (see Global cost carbon reduction, US cost curves) illustrate that some options may yield net benefits while others can be very expensive.  However, these studies did raise questions on the assumed behaviour of consumers, whether the costs of transacting have been included and the discount rate. The South African Long-Term Mitigation Scenarios (LTMS) also proposes a list with the costs of country specific interventions. This is useful work, but as the authors themselves suggest, need to set the basis for a more detailed scrutiny of the proposed options.

- The climate system may be forced into abrupt changes. In some circles this has been referred to as tipping points. The need to responding to extreme climatic events and disasters need to be acknowledged and response options for such climatic events included in a disaster management strategy.

- The Kyoto Protocol is fragile and pressure is mounting for a new climate policy regime.  Any national policy on climate change need to anticipate and plan for a future international climate policy regimes which may include wider cap-and-trade systems (cap-auction-and-trade), trade rules and border tariff adjustments to name a few.

Changemakers

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China's costly environmental crises

China's environment is in bad shape according to Kenneth Lieberthal, visiting fellow at The Brookings Institution.  This sends out a strong warning to other developing nations to better manage the environmental impacts of economic development.

 From ResponsibleChina.com:

China’s environmental crisis is wide-ranging, complex, and consequential

It threatens the pace of economic growth

Addressing it effectively will be expensive, and will require changes in the political economy

Challenges will evolve over time

The environment may well be the most consequential factor in shaping the country’s future

Why the Kyoto Protocol is so fragile

This graphic tells it all. From the New York Times.