The Reality of Recycling

The Guardian published a good piece called 'the truth about recycling'.  

A small selection from a very long article:

Wakelin [CEO of Greenstar] believes that one of the tricks to winning over a sceptical public is to make recycling far easier for the average householder. "I always get asked the same questions at dinner parties," he says. "Why do I have to have so many bins at home? And why can't I recycle more plastic?"

The solution, says Wakelin, is to "leave it to the machines", rather than have "Mr and Mrs Average sorting it all at home". His company's philosophy for waste is that "co-mingled" collections (where all dry recyclables are placed by householders into just one bag ready for collection) are the way forward, as opposed to kerbside collections (where householders are expected to separate their recycling at home for refuse workers working "kerbside" to then put these sorted materials by hand into separate containers on their vehicle) which, he says, are less efficient, both environmentally and economically. The MRF at Aldridge processes 500-600 tonnes of municipal recycling (collected from households, restaurants, small businesses etc) a day, serving 15 local authorities, some as far away as London and North Wales. This represents 3-4% of the UK's dry recyclate.

A key learning point for developing cities is to critically examine and pilot alternative waste management options before making any prescriptive choices.

Air pollution down, life expectancy up

A study in the New England Journal of Medicine again raises the importance of dealing with air pollution for its health impacts. 

The study argued that for an approximate period of 1980 - 2000 average increase in life expectancy in certain selected counties in the US was 2.72 years. Using regression modelling techniques, it is argued that reduced air pollution (defined as fine particulate matter PM2.5) is one factor contributing to increased life expectancies.  It is estimated that the individual effects of reductions in air pollution account for as much as 15% of the overall increase.

What Environmentalists Should Know about Economics

Dispelling misconceptions and myths about economics to environmentalists became such a large part of my work that I started thinking to write a book about it. Luckily, someone has done it already. 

Jason Scorse from Monterey Institute of International Studies published an on-line book on the topic. 

Further good news is that no economic background is required. The book is also fully downloadable.

Download the Book

What Environmentalists Need to Know about Economics - Entire Book

Download by Chapter

Table of Contents and Introduction

Part I: How Economists Approach Environmental Issues

Chapter 1 - The Root Causes of Environmental Problems

Chapter 2 - Determining the "Optimum" Amount of Pollution

Chapter 3 - Valuing Ecosystems

Chapter 4 - Putting Monetary Values on the Environment and Living Things

Chapter 5 - Valuing Future Generations

Chapter 6 - Tools to Address Environmental Problems: Taxes, Property Rights, Information, and Psychological Insights

Part II: Putting Economic Analysis to Work

Chapter 7 - Climate Change

Chapter 8 - Conservation and Biodiversity Preservation

Chapter 9 - Agriculture

Chapter 10 - Chemical Pollution

Chapter 11 - Fisheries

Chapter 12 - Deforestation

Chapter 13 - Population Growth & Technological Change

Chapter 14 - Demand-Side Interventions

Final Thoughts & Additional Resources

Comments and constructive criticism are welcome at: jason.scorse@miis.edu.

Image: Flickr

H/T: Globalisation and the Environment

SAs response to the international crises

See this draft, from Business Day.

CDM: Part of the problem?

A new working paper from the Statistics Norway, Research Department "Does the Clean Development Mechanism have a viable future" argues that CDM is an obstacle rather then a solution to dealing with climate change:

The developed countries can meet part of their Kyoto commitments by investing in emission-reducing projects in developing countries (the Clean Development Mechanism, CDM). Since the developing countries have so far not been willing to accept binding emission commitments, the CDM has been the only mechanism available for ensuring emission-abatement measures in developing countries. We argue that the CDM is not an efficient tool for achieving deep cuts in global emissions and conclude that maintaining the CDM as an option for developing countries may in itself be a serious obstacle to more binding participation by these countries.

Well-being: Income and Social Context

From a new study published by the NBER :

We find strong evidence for the importance of both income and social context variables 

in explaining differences in well-being. For most specifications tested, the combined 

effects of a few measures of the social and institutional context exceed that of income in 

equations explaining international differences in life satisfaction. Calculation of 

compensating differentials also reveals large income-equivalent values for improvements 

in the social context, with much of this value flowing via positive national spillover 

effects for key social variables.

Improvements in factors such as corruption, freedom, friends to count on, care and helping others, importance of religion can go a long way in improving human well-being.

Roaring China-Africa trade in 2008

China-Africa trade increased by 45% from 2007 to 2008 - reaching a record $107bn in 2008. The biggest trading partners are Angola and South Africa. This places even more emphasis on the question whether these deals are sustainable (see earlier post: China: Doing Deals that last?)

From ChinaView:

BEIJING, Feb. 11 (Xinhua) -- Trade between China and Africa reached a record 106.84 billion U.S. dollars in 2008, up 45.1 percent from a year earlier, customs figures showed Wednesday.

    Exports to Africa reached 50.84 billion U.S. dollars, up 36.3 percent. Imports from Africa hit 56 billion U.S. dollars, up 54 percent.

    China had a trade deficit of 5.16 billion U.S. dollars with Africa in 2008, compared with a surplus of 940 million U.S. dollars in 2007.

    The number of African countries with which China had more than 1 billion U.S. dollars in trade increased to 20 in 2008 from 14 in2007.

    Angola remained China's largest trading partner in Africa and South Africa came the second.

H/T: Centre for Chinese Studies

On carbon taxes and a sense of proportion

Three pieces of information showing the importance to keep a sense of proportion in the carbon tax debate:

A total of 735,000 automobiles were sold in China last month, compared to 656,976 vehicles were sold in the US. BBC News

and this:

FINANCE Minister Trevor Manuel’s plan to tax vehicles emitting more than 300g of carbon dioxide per kilometre from next year should be welcomed. The sentiment brings SA closer to international best practice in sharing in the responsibility to mitigate climate change.

While it is fair to argue that private vehicles do not add nearly as much carbon to the atmosphere as heavy industry does, changing the way we think about the environment may begin to make the big difference that the world needs.

Even if the effect of the tax is negligible in the greater scheme of global warming and climate change, its symbolic value and the awareness it creates is likely to have an important effect. (Business Day)

and this:

According to the National Association of Automobile Manufacturers of SA (Naamsa) 22,473 passenger cars were sold in January. But light commercial vehicle sales declined 9.4% over December last year to 8,978 units. The net effect was a total January new vehicle sales figure of 32,999 units - a mere half a percent increase over the previous month. (Bizcommunity)

Conclusion: Symbolic values and facts are not always good partners.

Rising temperature, decreasing income?

Hotter means lower income, even within countries, but there is a theory of longer-term adaption. 

From a new NBER paper, "TEMPERATURE AND INCOME: 

RECONCILING NEW CROSS-SECTIONAL AND PANEL ESTIMATES":

This paper provides new evidence on the relationship between temperature and income. 

Using sub-national data from 12 countries in the Americas, we show that the negative cross- 

sectional relationship between temperature and income exists within countries, as well as across 

countries. We then provide a theoretical framework for reconciling the substantial, negative 

association between temperature and income in cross-section with the even stronger short-run 

effects of temperature shown in panel models. The theoretical framework suggests that half of 

the negative short-term effects of temperature are offset in the long run through adaptation. 

Manuel's Greenery

Min Manuel's Budget Speech, delivered 11 Feb, highlights a continued focus on improving South Africa's environmental performance. Here are a the few extracts dealing with incentives for energy efficiency, environmental fiscal reform and favourable tax treatment on carbon credits:

A further R1 billion is added for electricity demand management, together with tax incentives for investment in energy- 

efficient technologies. 

Tax tips continue to make up the majority of the tips submitted. Mr. Saul Margolis of 

Johannesburg called for a tax to be imposed on incandescent light bulbs to encourage 

people to use compact fluorescent lightbulbs and save energy. Mr. Margolis, I have 

asked that this be included in the revenue proposals this year.  

We propose taking further steps to encourage energy efficiency and reduce harmful 

emissions, some of which have tax implications. 

• An incentive for investments by companies in energy-efficient equipment will be 

introduced, in the form of a supplementary depreciation allowance.  

• The levy on plastic shopping bags will be increased from 3 cents to 4 cents. 

• An increase is proposed in the international air passenger departure tax, which was 

last raised in 2005/06.  

• The existing excise duties on motor vehicles will be adjusted to take into account 

carbon emissions. 

It is important, furthermore that we should encourage South African companies to take 

advantage of the clean development mechanism established in the Kyoto Protocol. A 

favourable tax treatment will therefore be introduced for the recognition of income 

derived from the sale of emission reductions, as certified through this mechanism.  

RWE: No new coal fired power stations

RWE AG said it won’t build new coal- fired power stations in western Europe after the European Union forced utilities there to buy all carbon dioxide allowances starting 2013, newswire Dow Jones reported, citing Johannes Lambertz, chief executive of RWE Power.

Full story: Bloomberg.

Image: Flickr

H/T: Environmental Valuation & Cost-Benefit News

Discover Africa

A website called Discover Africa pulls together a wonderful set of images from Flickr on the continent. 

Well worth a visit! I tried one search. Good images, but just not clear how one will make sense, filter narrow or rank the 162784 images found matching “Cape Town”.

H/T: White African

Image: Bo-Kaap, Cape Town from Flickr

On free choice and planning in natural resource management

Aren’t economists often seen as the defenders of free choice and are they not sceptical about any intervention or planning that could hamper that choice? When one picks up a textbook on the subject this might easily be your first conclusion. However, further developments in the discipline have pointed out that focusing only on either planning or markets is untenable. This post will attempt to point out some of the bridges between free choice and planning within the context of natural and environmental resource management.

The first important concept is that of external effects or externalities. These negative or positive effects of certain economic activities are not accounted for in market prices. An example of a negative effect could be air or water pollution, while an example of a positive effect is that private research could lead to new general knowledge. Policy adjustments are often necessary, especially to internalise negative impacts, which, ceteris paribus, would ultimately lead to better-informed choices. 

Another important development in economic theory is the contributions of neo-institutional economics. The focus here is on the rules and contracts that guide exchange. In this view the market, or any other institution for that matter, is just one way of exchange and could be efficient, but should be measured according to the costs of performing such transactions. The focus is not on a choice between planning or market frameworks, but on the relative costs of keeping such institutions intact. 

The third, and least developed concept in economic theory, is one related to the burgeoning sciences of systems theory, complexity theory and chaos theory. With the holistic focus on the interrelationships between objects, rather than on objects themselves, the contribution of this subject field for our purpose lies in the emphasis on continuous feedback from the system under study. The ex post planning of complex systems is almost a contradiction in terms, one which will only make sense if applied in a process of experiential learning. 

These three concepts are important when evaluating the importance of  theories on economy-environment interactions for planning purposes. The fact is that the tension between the amount and type of planning, and the amount and type of free choice differ on deep philosophical grounds. Even the views of scholars within the subject field of economics and the environment (including environmental economics, ecological economics, neo-institutional economics and other more peripheral approaches) differ vastly on the relative roles they would like to assign to free choice and to planning. 

Without going into the details of such a debate, it would possibly be valuable to point out some environmental issues where such a debate will continue to flourish:

• The economic value of open spaces in urban environments
  
• The prioritisation of alternative environmental planning options
  
• The economic assessment of environmental policies and plans
  
• The economic valuation of alternative land uses in applications such as city planning, rural development or spatial development initiatives (SDIs)
  
• The planning of an international or national trading system for carbon credits

In all these examples, some will argue that more planning means more economic costs, while others will continue to argue that more individual choice means more potential for anarchy, and thus failure to reach environmental objectives. It can be foreseen that this debate will reach an academic stalemate if not guided by a learning process that facilitates such interactions. The context of natural and environmental resource management will be an important factor in determining the best mix between planning and markets.

Urban natural capital

Urban centres do not only pose a threat to the sustainable delivery ecosystems goods and services, but also provide the infrastructure and the people to realise the economic value of such goods and services.  

A study done in Canada argued that a supply of urban natural capital provides residents (and visitors!) with a connection to nature as well as benefits such as improved health, recreational and educational opportunities, increased property values, encouraging tourism and attracting and retaining skilled labour and businesses.

Investing in urban natural capital has some tangible socio-economic benefits that can be quantified.  The challenge remains to make a compelling business case to municipalities and local authorities to invest in natural capital, which by nature is often a public good.

Picture: Flickr