Results for “air pollution”
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When was the Golden Age of conservative intellectuals?

Paul Krugman says a mix of “never” and “certainly not now” (my paraphrases, not actual quotations from him).  Here is one bit:

On environment, a similar turn took place a bit later.  The use of markets and price incentives to fight pollution was, initially, a conservative idea condemned by some on the left.  But liberals eventually took it on board — while cap-and-trade became a dirty word on the right.  Crude slogans — government bad! — plus subservience to corporate interests trump analysis.

I believe this is pretty far from the reality, here are a few points:

1. Conservative intellectuals never have turned against the idea of a carbon tax, as evidenced by Greg Mankiw’s leadership of the Pigou Club.  Cap-and-trade is somewhat less popular, but that is probably the correct point of view, given the time consistency problems with governments that increase the supply of permits, as has happened in Europe.

2. Water economics is a big part of environmental economics.  “Raise the price” and “define property rights better” remain central ideas in that field, commanding a lot of attention.  David Zetland is one recent exemplar of these ideas.

3. The idea that there can be too much environmental regulation in many particular cases remains a central contribution, often associated with the Right.  Of course this view is compatible with much tougher restrictions on carbon or other forms of air pollution.

4. The idea of properly applying “value of life” analysis to regulation, and seeking greater consistency (let’s save lives in cheaper rather than more expensive ways), remains a significant and undervalued insight.

5. Some of the key work on valuing biodiversity has come from Chicago-related methods, though I do not know the political affiliations of the authors.

6. Matthew Kahn, one of the leading environmental economists today, I would consider broadly in the classical liberal tradition.  He recently published an important book on air pollution in China.

6. Jonathan H. Adler is a significant ongoing contributor to environmental law and economics.  Or try the work of Terry Anderson.

7. Applying property rights analysis to animal herds, animal ownership, and the tragedy of the commons remains a significant conservative idea.  You will note throughout I don’t like calling these “conservative” ideas, they are simply good ideas or bad ideas.  Still, in the broader sociological sense you hear these ideas from conservatives and libertarians fairly often.

8. There is plenty of recent work on the political economy of the administrative state, and whether it generates abuses of the rule of law or bad incentives.

9. I could go on, with perhaps Vernon Smith”s recent work on peak-load pricing for electric utilities being next in line.  Or pro-green, pro-nuclear analysis often comes from the Right.

10. Overall, “schools of thought” have been dwindling in economics, and so it might seem that the golden ages of various ideologies or schools of thought lie well behind us.  But if we focus on the ideas and their influence, rather than whether carriers of those ideas bear particular political labels, the influence of Chicago, UCLA, cost-benefit, and Montana/PERC ideas in environmental economics never has been stronger.  In that sense the golden age is right now.

Addendum: Here is a better Krugman piece on the history of thought, though I would note that capital movements were integrated into the price-specie-flow mechanism in the 18th century and fully by the time of Henry Thornton.

What is the relevant uncertainty for climate change policy?

A number of people have climbed onto Twitter and outlined (correctly) how increased uncertainty about the impact of climate change increases the value of doing something about it.  There is downside risk, and of course we wish to buy insurance against that in the form of a more active climate change policy.  Still, that is not looking deeply enough.  I see some of the relevant uncertainties as embodied in the following scenario, which is more about policy means than climate change science:

Following a Trump debacle, finally the Democrats win all branches of government and pass a climate change bill.  There is a carbon tax, and further anti-coal measures, but it isn’t enough to shift energy regimes in a transformational sense (besides, truly transformational technologies require luck and “the right time” far more than price incentives).  Instead the United States becomes more like Western Europe, with higher levels of conservation but no ground-breaking new energy source.  Solar goes up by ten percentage points, and wind by two or three, given NIMBY opposition.  Fracking becomes more efficient yet, which nudges fossil fuels back a bit onto center stage.  Nuclear is closed down altogether, and hydroelectric also goes in reverse or stagnates.  China is as China does, and they slowly move away from their installed coal base, in the meantime taking steps to control their particulate matter but not so much their carbon, copying America in this regard.  India starts a shift from coal to natural gas but still has rising carbon emissions.  Africa and Vietnam exceed growth expectations, with a lot of solar power to be sure, but not enough to counteract their growing industrialization.  The carbon tax causes a mild recession in America, and environmentalism becomes less popular.  The global boost in temperature continues, unchecked.  The people who die each year from regular air pollution — six to seven million at last count — diminish in number with economic growth, but we react largely with indifference to that problem, because it doesn’t fit into domestic political struggles very neatly.

Now, to me something like that is the single most likely scenario, albeit with a lot of uncertainty.  I am still happy to try remedial policy measures, and to try them now, if only out of non-complacency or perhaps just desperation.  But come on, let’s be honest.  If all you are doing is trying to combat uncertainty about the science, you are unwilling to look the actual problem square in the eye, just like the climate deniers, the very people you so much decry.

How to invest to fight global warming

Here is a query from a loyal MR reader:

If you had net assets in the six figures, and were very concerned about global warming (some combination of wanting a good life for your children, and believing human civilization is valuable over a time horizon longer than your lifetime), how would you invest those assets?

Some thoughts I’ve had:

Invest in renewable energy companies: Extremely hard industry to figure out where your money would have most value added. Not easy to invest in Tesla.

Invest in water utilities: a lot of the problems with water are regulatory rather than investment.

Buy a house in an urban center: NIMBYism means that this likely just crowds out someone else, with unclear impact on carbon reduction

Housing ETF: Might have more political impact than personal purchase but difficult industry to figure out.

Give money to politicians: Does money actually impact political results?

Buy a house with access to water and a lot of guns: Not an ideal solution

Quit your job and become an activist: seems to have been moderately effective in recent years.

What non-complacent answers am I missing? How would your answer change if someone had 5 figure assets? 7 figures? 8 figures?

My answer is pretty simple: invest in fighting indoor air pollution in developing nations.  (Here are further research sources.)  The burning of wood indoors, for instance, leads to pretty significant carbon emissions, as does the burning of charcoal, dung, and plant residue.  These burnings are also harmful to human health, accounting for perhaps as many as four million (!) deaths last year, maybe more.  Some of the problem is inadequate ventilation, but also safer and cleaner gas stoves, among other technologies, represent a better and environmentally friendlier option for many of these households.  Pilot projects in India, Kenya, and China have shown positive results.

The nice thing about this target is that you can save lives even if global warming can’t really be stopped.  And rather than (implicitly or explicitly) taxing poor people in poor countries, you are helping them out.  The broad steps one wishes to take are consistent with these locales become wealthier rather than poorer regions.  Here is a paper on indoor air pollution and carbon emissions in Nigeria.

That said, I do not know which are the best non-profits or commercial projects in these areas — could any of you help out in the comments?

Another option would be to continue to apply pressure to Indonesia to limit the burning of their forests: “Indonesia’s carbon emissions from the 2015 forest fires were bigger than the daily emissions rate of the whole European Union, a study reveals.”  This would involve working through international organizations and perhaps NGOs in Indonesia itself, again your suggestions are welcome.

Moving to China and how to do it

A loyal MR reader writes to me:
I’m planning on…spending the summer in China before starting the program in Beijing in September…
How much emphasis should I spend generally on language study vs. travel in China vs. reading in English about the country? For this summer, I was thinking of holing up in one city and finding tutors to do 10hrs/day of study, traveling around the country, or some combination of the two.
Here’s how one blogger described what three months of intensive gave him: “My level of Chinese is sufficient to deal with most basic necessities of living, travel, make new friends and have interesting conversations entirely in Chinese. I can also read most of simple emails, menus and signs, although my reading still lags behind my speaking ability. I’m still not at a level where I could easily understand group conversations, movies, television or read books or newspapers.”
Also, any cities in particular you’d like to spend three months in?
What type/mix of books should I be reading over the next few months in the states to prep? Any particular titles come to mind?
Ideas for Master theses in economics that would benefit from being in-country even with relatively limited language ability?

TC here: Tough questions!  I would offer a few points:

1. You can’t study a foreign language for ten hours a day, as you need to intersperse more rewards to keep yourself motivated (like most things!).  The best way to learn Chinese is how I learned German, namely through a romantic partner.  That probably implies having a home base city for a big chunk of your time.

2. You need to ask how well you can handle air pollution, especially for the winter months.  Overall, I prefer Western China, which also tends to be less polluted.  Yunnan province is to me one of the very best visits in the world, and the environment there is downright pleasant, but everywhere I’ve gone in China was worth visiting.  Of course Beijing, Shanghai, and Shenzhen are where much of the action is at, of those three I enjoy Beijing the most (by far) but would pick Shanghai to live, mostly because it has less air pollution.

3. It is hard to tackle China through books, and single titles don’t get you very far (but here are a few recommendations).  Maybe start with John Keay for an overview, but finish up by reading it yet again.  Along the way, pick a few particular pre-communist topics, such as the Taiping rebellion, the history of a part of the country, Christianity in China, the Great Divergence, or the Grand Canal (understudied!), rather than just pawing through dozens of basically similar books on “where China is at right now.”  If I had to suggest one topic, maybe it would be “reading Chinese history through the lens of the state capacity idea,” as my colleague Mark Koyama has been working on.

4. The economic history of China is an area where economics research is making some very rapid advances from a pretty low base of knowledge.

5. Ask someone who has moved to China.

Aleppo, and other tragedies

There were a number of deadly attacks yesterday (Berlin, Cairo, Jordan, Turkey (multiple)), while the Aleppo tragedy is continuing and a significant part of the world is mired in disaster every day.  I sometimes feel bad that I do not post more about such topics, but often I do not have a fresh perspective to offer, nor do I find it cathartic to consume my own self-righteousness, quite the contrary.  I also find it problematic to elevate the commonly-shared “tragedy of the day” above the less immediately publicized tragedies.  UNICEF for instance claims that three million children die each year for reasons that can be traced back to malnutrition.  WHO claims that seven million deaths each year can be attributed to air pollution.  Maybe those are not the correct numbers, but you cannot talk them down to anywhere near zero.

Sometimes I feel there is a kind of impossibility theorem, suggesting there is no morally appropriate response to changes in the scope of widespread tragedies.  It seems wrong to be happy that “fewer people than usual suffered and died today,” also wrong to let particular upward blips in death and suffering so fully capture one’s attention because of social framing, and all the more wrong to think changes in the numbers do not matter at all.  And why is hardly anyone upset about Irkutsk?

This post is not the best I can do, but it is what I have done.  The image is a depiction of a long-since-gone 16th century Aleppo, by Nasuh Al-Matrakî, via Rabih Alameddine.

aleppo

*China’s Banking Transformation: The Untold Story*

By James Stent, I thought this was quite a special book.  Most of all, it tries to explain how things actually work (it is sad how rare this is in books, outside the genre of angling tomes).  Stent tries to give the reader a good sense of what kind of demotion a failing leader of a big bank might receive, how the 1998 failure of GITIC (Guangdong International Trust and Investment Corporation) shaped the thinking of Chinese leaders on bank resolution, how major bank board directors are chosen, how the percentage of non-performing loans is calculated within banks, how SME loan risk is dealt with, and how the regulators try to ensure safety (lots of liquidity), among many other matters.

It is perhaps no surprise that the author has been an independent director on the boards of two Chinese banks, and has four decades of banking experience in Asia.

It’s not a thrilling read for most people, but if you read books on China or international finance you’ll learn a great deal from this one.  That said, I believe the author’s assessments are in general not sufficiently critical, noting that some recent events seem to bear out such a judgment.

You can buy it here.  Also useful, for different reasons, is the new book The Economics of Air Pollution in China: Achieving Better and Cleaner Growth, by Ma Jun.  It is funny (read: sad) how many people think the planet is at stake when it comes to climate change, and yet they will not deign to read a single book about air pollution in China.  Should they not read all of them?

Tuesday assorted links

1. Missing moods.  And apolitical reasons to hate politics.

2. No boo necklace markets in everything.  Avoid those monsters.

3. The Jewish-American accent.  And Donald Trump’s linguistic style.

4. Alan Turing’s computer-generated music has been restored.

5. “A boom in electric cars means Europe would have to look at building the equivalent of nearly 50 power stations the size of the UK’s planned Hinkley Point nuclear plant, EU experts have warned.  And if big fleets of plug-in cars are charged with electricity from power plants burning coal, the dirtiest fossil fuel, overall levels of sulphur dioxide air pollution are likely to rise, a study from the government-funded European Environment Agency shows.”  FT link here.

6. How to read a book a week.

Qingdao notes

There are early twentieth century German colonial buildings, some lovely water promenades, and less air pollution than in perhaps any other major Chinese city.  Here is the urban plan.  The best dishes are the clams, the snails, and the seaweed salads.  The cucumbers are an order of magnitude better than what I am used to, and the city’s status as a beer capital comes from the earlier German occupation.

qingdao

In two days of going around, I did not see a single Westerner.  It is sometimes considered China’s most livable city, here is Qingdao on Wikipedia.

How bad a tragedy is the Volkswagen fraud?

The NYT symposium is here, including Robert Reich, Dan Ariely, and myself, among others.  Here is my piece, excerpt:

One plausible estimate suggests this additional pollution has been killing 5 to 27 Americans each year, with that number worldwide reaching up to 404 as a maximum.

To put that number in context, the World Health Organization estimates that about seven million people die each year worldwide from air pollution. Even within the United States, early deaths from air pollution have been estimated to run about 200,000 a year, in comparison to which the losses from the Volkswagen scandal are a rounding error. For the American deaths, however, the culprits are often cars, trucks and cooking and heating emissions, so there is no single, evil, easily identified wrongdoer at fault. As Pogo recognized, often the real enemy is us.

Here are alternative estimates of the death from Volkswagen, published after my piece was set to run but the comparisons do not change fundamentally.  From that same article here are two paragraphs of note:

Don Anair, deputy director of the vehicles program at the Union of Concerned Scientists, said the precise effect of the Volkswagen fraud would require intense and complex computation.

Still, he cautioned against taking the view that the Volkswagens have reversed the progress with pollution from automobiles. Since the standards went into effect from 2004 to 2009, he said, emissions of nitrogen oxides have been 90 percent lower. “It’s not like this is going to offset the majority of the benefits of these standards,” he said. “But there will be some impact, and we need to get a better handle on it.”

“Since the standards went into effect from 2004 to 2009, he said, emissions of nitrogen oxides have been 90 percent lower.” is a sentence which I fear will not receive much attention in the current debate.

Why you should visit China more

I suggest two plans, each of which I have been able to implement in a partial way only:

1. Take the train around to random first, second, and third tier Chinese cities.  Many of them will have their own cuisines, or they will represent a nearby regional cuisine.  It’s like discovering the food of a new country.  Imagine if Shandong province were a separate country!  How compelled you would feel to visit it for the food, often considered China’s foundational cuisine, plus it uses the finest vinegars.  And yet, because it is part of “China” (Gavagai!), you feel you already know something about Chinese food and thus the need to sample it is not so pressing.  Redo your framing, and rush to some of the lesser visited parts of China.

By the way, you can stay in the second or third best hotel in most Chinese cities for only slightly more than $100 a night, and yet receive five star treatment and quality.

2. How many provinces does China actually have?  I don’t wish to litigate that dispute, but most of them have restaurants devoted to their regional dishes in Beijing.  These are state-owned restaurants, and most of them are excellent.  Furthermore they are scattered around town, so if you visit them all you will see many parts of Beijing.

A month in Beijing should allow you to visit them all, plus the air pollution really is better these days.

I should add that western China has by far the best raisins I have sampled in my life, most of all the big red raisins.  Until my trip to Xi’an, I had never actually tried a real raisin with the real raisin flavor.  Forget the Terra Cotta Warriors, discover what a raisin is!

How the Chinese view their own climate agreement

Both sides put out their joint statement, the U.S. issuing it via the White House and China releasing it through the official Xinhua News Agency. But whereas one side gave it a high gloss, the other seemed to be trying to bury it under the rug. The top story on the website affiliated with the Communist Party flagship paper The People’s Daily was about Xi and Obama meeting the press  — but the article made no reference to the climate agreement. Other stories on the homepage touched on the climate statement but tended to relegate it to the latter half of the article, and omitted the American-style superlatives. The popular Beijing News, a state-run paper known for gently testing the editorial boundaries, also didn’t mention the climate deal in its Nov. 12 cover story on the APEC meeting that brought Obama to China. It focused instead on the meeting’s anti-corruption accord and progress on plans for a pan-Asian free trade zone spearheaded by China.

Here is one reason why:

Beijing is under fire domestically for its unsuccessful efforts to curb local air pollution, noting that people were furious that authorities managed to clear the air for the visiting APEC dignitaries but can’t do it on a daily basis for their own citizens. ” There may be worries that focusing on climate change rather than air pollution doesn’t meet the public’s main concerns,” Seligsohn said via email.

That is all from a good piece by Alexa Olesen at Foreign Policy.

When will China reverse its carbon emissions?

No one knows for sure, you will find a brief survey of some estimates here.  Let’s start with a few simpler points, however.

First, China is notorious for making announcements about air pollution and then not implementing them.  This is only partially a matter of lying, in part the government literally does not have the ability to keep its word.  They have a great deal of coal capacity coming on-line and they can’t just turn that switch off.  They’re also driving more cars, too.

Second, China falsifies estimates of the current level of air pollution, so as to make it look like the problem is improving when it is not.  Worse yet, during the APEC summit the Chinese government blocked the more or less correct estimates coming from U.S. Embassy data, which are usually transmitted through an app.  A nice first step to the “deal” with the United States would have been to allow publication (through the app) of the correct numbers.  But they didn’t.  What does that say about what one might call…”the monitoring end”…of this new deal?

Third, a lot of the relevant Chinese regulatory apparatus is at the local not federal level (in fact it should be more centrally done, even if not fully federalized in every case).  There are plenty of current local laws against air pollution which are simply not enforced, often because of corruption, and often that pollution is emanating from locally well-connected, job-creating state-owned enterprises.  Often the pollution comes from one locality and victimizes another, especially in the north of the country.   Those are not good local regulatory incentives and it will take a long time to correct them.  Right now for instance Beijing imports a lot of its pollution from nearby, poorer regions which simply wish to keep churning the stuff out.  The Chinese also do not have anything close to a consistently well-staffed environmental bureaucracy.

Fourth, if you look at the history of air pollution, countries clean up the most visible and also the most domestically dangerous problems first, and often decades before solving the tougher issues.  For China that highly visible, deadly pollutant would be Total Particulate Matter, which kills people in a rather direct way, and in large numbers, and is also relatively easy to take care of.  (Mexico for instance has been getting that one under control for some time now.)  The Chinese people (and government) are much more worried about TPM than about carbon emissions, which is seen as something foreigners complain about.  Yet TPM is still getting worse in China, and if it is (possibly) flat-lining this year that is only because of the economic slowdown, not because of better policy.

When will China cap carbon emissions?  “Fix TPM and get back to me in twenty years” is still probably an underestimate.  Don’t forget that by best estimates CO2 emissions were up last year in China by more than four percent.  How many wealthier countries have made real progress on carbon emissions?  Even Denmark has simply flattened them out, not pulled them back.

The Chinese really are making a big and genuine effort when it comes to renewables, it is just that such an effort is dwarfed by the problems mentioned above.

The media coverage I have seen of the U.S.-China emissions “deal” has not been exactly forthcoming in presenting these rather basic points.  It’s almost as if no one studies the history of air pollution anymore.

I understand why a lot of reporters want to “clutch at straws” — it’s good for both clicks and the conscience — but a dose of realism is required as well.  The announced deal is little more than a well-timed, well-orchestrated press release.

Is stopping climate change a free lunch?

We’re again seeing the return of magical thinking in the economics profession and elsewhere.  Limiting climate change is indeed worth doing, but it is not close to a free lunch.  Eduardo Porter makes the relevant point quite nicely:

“If the Chinese and the Indians found it much more economically efficient to build out solar, nuclear and wind, why are they still building all these coal plants?” asked Ted Nordhaus, chairman of the Breakthrough Institute, a think tank focused on development and the environment.

China’s CO2 emissions increased 4.2 percent last year, according to the Global Carbon Project, helping drive a global increase of 2.3 percent. China now accounts for 28 percent of the world’s total emissions, more than the United States and the European Union combined.

“I don’t think the Chinese and the Indians are stupid,” Mr. Nordhaus told me. “They are looking at their indigenous energy resources and energy demand and making fairly reasonable decisions.”

For them, combating climate change does not look at all like a free lunch.

Note that doing something about air pollution and doing something about carbon emissions are two distinct issues.  America did a great deal to clean up its air, for instance when it comes to the dangerous Total Particulate Matter, but has done much less to lower its carbon emissions.  It is no accident that the former is a national public good, the latter is mainly a global public good.  China, India, and other developing nations may well go a similar route and simply keep emitting carbon at high and perhaps even growing rates.   If you lump everything together into a general “the benefits of getting rid of air pollution,” you will be missing that nations can and probably will make targeted clean-up attempts that leave carbon emissions largely intact.

By the way, here is yesterday’s report from India:

“India’s first task is eradication of poverty,” Mr. Javadekar said, speaking in a New York hotel suite a day after a United Nations climate summit. “Twenty percent of our population doesn’t have access to electricity, and that’s our top priority. We will grow faster, and our emissions will rise.”

India is the world’s third-largest carbon polluter, behind China and the United States, and Mr. Javadekar’s comments are a first indication of the direction of the environmental policies of the new prime minister, Narendra Modi…

In coming decades, as India works to provide access to electricity to more than 300 million people, its emissions are projected to double, surpassing those of the United States and China.

If you haven’t tried crossing the street in India, you don’t know much about how hard it is to fix the problem of carbon emissions.

Santa Cruz notes

The town square is lovely, even though they removed the sloth for fear he would electrocute himself.  The population is friendly, the weather is perfect, and there are few sights.  Unlike in much of South America, danger is not a concern.  The small children who hang out in the central square seem to think that a full embrace of a pigeon is a good idea.

The food is excellent and yet you never hear about it.  Try El Aljibe for local specialties (peanut soup, or duck and corn risotto, with egg on top), and Jardin de Asia for Amazonian Andean Peruvian Japanese Bolivian fusion.  It is hard to find the Cochabamba version of Bolivian food that has made it over to the U.S.   The steak here is decent but not as good as Argentina or Brazil.

The taxi equilibrium is that you do not ask in advance what the fare is, because that indicates you do not know.  Be confident, and you will be surprised how little money they ask for.

If you had to pick one city to represent South America as a whole, Santa Cruz might be it.  You can feel elements of Brazil, Argentina, Venezuela, and yes even Bolivia here, all rolled into one.  The proportions of fair-skinned, mestizo, and indigenous people mirrors the Continent as a whole more than the Altiplano.  The secession movement here seems to have failed.  Amazonian indigenous peoples and Guarani are common here.

Arriving at the airport at 3:30 a.m. involves a nightmarish wait.  There is not much air pollution.  I didn’t meet a single person in the service sector who spoke English.  People in Santa Cruz seemed fairly happy relative to their per capita income.

You can study the economic development of China by visiting Bolivia.

Shanghai notes

Very good dumplings and noodle soups can be had on the streets in small restaurants for a dollar or two.  When you look further afield I can recommend Yi Long Court, a very fine Cantonese restaurant in the Peninsula Hotel.  Lost Heaven is a very good Yunnanese restaurant, get the Ti dishes, I enjoyed both branches of this place.  For Shanghai dishes, go to Jesse.

The more developed parts of Shanghai feel much more like the United States than any part of Beijing does, yet many traditional neighborhoods remain and there is plenty of good architecture from the early 20th century.  If not for the air pollution, this would be one of the best cities in the world.  It’s not that cheap, though, once you get past food and taxis.

The long, tree-lined alleys of Chinese neighborhoods have led to a superior reconceptualization of the outdoor shopping mall.

There are policemen who seem to be there to teach drivers how to back into spots using parallel parking.

For eleven years I’ve been writing about “Markets in Everything,” but here in Shanghai I transacted in one of those markets for the first time.  I went to “More Than Toilet,” a cafe/restaurant with a toilets theme.   Your chair is designed to look like a potty, and I was served my watermelon juice in a model of a urinal, with an elaborate straw, $6 for the experience.  (Who knows what I will try next?)  The food that was passing by looked horrible, like Chinese Denny’s on steroids.  I had blogged the original Taiwan branch of the place some time ago.

The luxury malls do not seem to have benches to sit down on and check your email.  But since hardly anyone is shopping in most of those malls, perhaps that doesn’t matter very much.