31 Mar 2014

Monday funnies

Mimes can get a little annoying...

Artificial mussels

Gary Chan writes:*

“Artificial mussels” developed from a Hong Kong scientist, Professor Wu, Shiu Sun. Artificial mussels are use for stably detecting content of heavy metals (copper, lead, mercury, zinc, chromium, cadmium) in any kind of waters. It is less affected by the depth of waters and it is cheap. Every artificial mussel only costs five Hong Kong dollars, which is less than one US dollar.

In order to detect heavy metals, what you have to do is tie five artificial mussels together as a group and place in the targeted waters, then you can know what heavy metals are in that area in around one month. Every mussel contains some chemicals that can absorb the heavy metals from the waters. Wu said to make one artificial mussel, it only takes him five minutes. Many scientists from Thailand, Philippine, Ghana, Tanzania, etc. had come to Hong Kong to study how to make and use the artificial mussels from Professor Wu. The scientists hope that they can bring this technology back to their countries for practical application.

Bottom Line: I think this is a wonderful invention especially for developing countries, because it is low cost and can detect many metals. And I am so proud of him, because he is come from the city where I live in. And he motivated a lot young inventors in Hong Kong based on his successes.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

The nightmare on Inner Mongolia grassland

J writes:*

Inner Mongolia is a very beautiful province which has abundant resources including grassland pasture, mineral resource, cattle and sheep. In recent years, a lot of “man-made holes” appears on the grounds, which are abandoned and untreated wasted mine. The main reason is that most small mining owners are coyoting and over mining to maximize their private interest regardless the bad effect to the environment and local residence. Administrative omission is another reason. Government has not promptly monitored the mineral resource and effectively regulated the bad production activity of small mining company. These small mining owners only get the economic benefit from mining and didn't pay any cost for treatment pollution and back-fill the abandoned mines.

The above behaviors led to serious consequences [Chinese]. Firstly, the ecological environment in Inner Mongolia has been severely destroyed. Because of grassland desertification and pasture degradation, ranchers can’t graze on “holes” area; meanwhile, animals that used to live in grassland lost their home. Secondly, the residents’ living environment has been deteriorated by mining pollution. A lot of uncovered sand, blown by wind, heavily pollutes the air. Thirdly, those abandoned mines are not been back-filled which is dangerous to people and animals, who can easily fall inside the holes especially in the bad light conditions during nighttime. Lastly, the chemical residues which are used to smelt gold mines pollute the groundwater, which is a serious threat to the local people’s health.

To deal with this problem, local government must establish efficient exploitation regulations. More important is that officials should be governing mineral resource in strict accordance with the regulation. Besides, government also has to monitor miner’s production activities, punish the miner who didn't follow the rules. Mine owners not only have to pay for the pollution but also compensate local resident.

Bottom Line: Inner Mongolia’s environment has been severely destroyed.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

Methane the cause of global warming

Jeff Sproule writes:*

When thinking about global warming and greenhouse gas (GHG) emissions, most people think about cars being the main culprit. Although they have a large effect on the atmosphere, livestock, especially cattle have more devastating results. Studies vary, but the results show that cattle are responsible for 10-20% of global warming. The main reason is cattle produce an extreme amount of methane from bacteria in their stomachs breaking down food. Methane actually has a greater ability to trap heat in the atmosphere than carbon dioxide. With this extreme amount of methane being produced, cattle are by far the most polluting livestock on the planet. So why are we eating so much of it? The reason is that the price of beef does not take into account all of the costs (mainly the negative externality of GHG's) therefore is consumed higher than the socially optimal level. The simplest way to reduce the amount of beef people are eating would be to create a “methane” tax similar to the carbon tax many countries/provinces have on buying petroleum products.

Bottom Line: Introducing a methane tax would aid the price system into closing the gap between efficiency and environmental friendliness.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

Speed blogging

  1. John Fleck is doing a series of great posts on water near the US-MX border: stranded with neighbors, the environmental-social border of wet and dry and the All-American canal, which is bigger than the Colorado River at that point

  2. California doesn't have a drought problem or water management problem. It has a demand problem. That's why "water cops" are ticketing people all over Sacramento. People need to be told what to do because they have no water meters! (To get LOTS of information on water in CA, watch these UC Davis seminars) Finally, this paper draws on Spanish experience to explain how California water markets fail

  3. I left a huge comment on managing water in British Colombia (many points drawn from Living with Water Scarcity). You can comment until 10 Apr, but you may want to sign a petition right now opposing a recent Canadian law "that gives oil, gas and mining companies the power to drill exploratory wells, build roads and dig giant test pits in BC’s provincial parks -- all in the name of pipeline and transmission line "research'." Holy dead whales, batman, sounds like Japan's destructive, corrupt policy!

  4. The NYT on climate-induced flooding (Miami is top of the list in the US) and how the (non-whale-killing) Japanese are adapting to floods
H/T to OB, CD and RM

28 Mar 2014

Friday party!

My dad and I are Gerswin fans, and this is genius:

Who Benefit From Beijing Smog?

L writes:*

It is not news that waves of toxic particles smog attacked Beijing since 2014 January. PM2.5 became a new “popular” word in China. The residents complained about it, and everyone wanted the government to take action on it. It seems every resident is a victim; but who benefit from the Beijing smog?

First, people who often drive cars are winners, because they save their time and enjoy the convenience. But they are not the only ones who get benefits. Beijing is the capital city of China, also the most popular. It is not big but crowded. Almost 75% of its residents were not born in Beijing. They move to Beijing and work there for more chance. If people drive cars are winners, then people whose jobs are related to “driving” also benefit from the smog because they earn salaries on it. Car garage men, car sellers, gas stations workers, parking lots workers…and even the lady who sells soy beverage at a gas station all benefit from the issue.

Bottom Line: The smog is a result of economic development in China. It should be solved as a long term problem instead of expecting the government remove the smog during one night. Each resident of Beijing should be aware of their responsibility because everyone benefited from its development.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

There is no such thing as clean coal

D writes:*

Ordos is a city in northern China. Although many people wouldn't recognize the name, Ordos is important economically. Its GDP per capita was greater than Hong Kong’s in 2012. How could that be possible? The answer is black gold - coal - a natural resource that spurred growth in many other cities in northern China since the turn of the century. Prior to 2000, cities like Ordos were under-developed, with animal husbandry as the primary economic activity. An increasing reliance on coal has contributed to China’s rapid economic growth and in particular, it has accelerated the growth of coal-producing cities. Propelled by coal, Ordos has experienced a typically unhealthy development pattern. Coal mine owners become overnight millionaires, government officers are promoted quickly to central government, car dealers sell expensive cars to local people and there are new night clubs, restaurants, and hotels opened every day. However, their clean land is gone, their animal husbandry business is ruined and their air quality has deteriorated. In fact the biggest economic cost for them is not the transportation fee for coal but an environment that has become polluted.

China’s coal sector is not only the world’s largest, but also the most dangerous and most polluting. New central government leadership and a five-year plan recognize that the development of cities like Ordos needs to be radically altered. A good example of action beyond words is the central government providing direction and incentives to local government to redevelop animal husbandry and other environmentally friendly businesses.

Bottom Line: Development is important but both the long and the short term have to be considered together with the environment.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

What is the cost every time you flush?

Zeliang Wang writes:*

People use water everyday, your liquid waste would go to WasteWater Treatment Plant through underground pipeline. The liquid waste is going to primary treatment plant where wood, stone, sands and other solids are removed, after that, waste goes to secondary treatment where the most of organic, bacteria and solid sludge are filtered. After all the procedures, the water would be discharged to river. What is the cost every time you flush? I looked at my toilet, it costs 6 litres of water per flush, from the utility billing of Vancouver, one unit water is $2.385 (one unit is 2,831.6 litres), one unit of sewer water is $1.906, thus, through calculation we can get that one flush cost about $0.01. That is so cheap that could be negligible for every one. However, what I calculated is the basic cost that would appear on your billing, there could be more social cost and negative externalities that is unpredictable if people flush food, cooking grease, medication and oil. Cost of flushing these waste:
  1. Less oxygen in ocean because food need oxygen to decompose which is harmful to the fishes and our fishery industry.
  2. Blockage happens in the pipeline because cooking oil become solid and this may lead sewer overflow.
  3. The medication is hard to clean out so your drinking water could contain limited level of pharmaceutical.
  4. One drop of motor oil can pollute 50 litres of water, and cost more to consume the organic from the wastewater.

On the other hand, if people recycle the waste in proper ways, there is no such cost to us and there could be more benefit. For example, cooking grease can be recycled and converted into biofuel which is in application currently. If food go to landfill and composted properly, it would produce “compost (like soil) and biofuel” that can run vehicles.

Bottom Line: When you know how our wastewater treatment plants work and the cost of flushing food and chemicals, we should not flush everything. Recycle the waste as much as you can.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

Anything but water

  1. "Experts" are still struggling with suggestions on how to reduce carbon output/climate change. Three (or six!) years ago, I spoke in favor of a carbon tax in developed countries and actions to improve living standards in LDCs (often possible if fuel subsidies are removed). My ideas are still the same, except that some countries are now starting to see the folly in subsidizing low carbon technologies...

  2. In 1850, Frederic Bastiat published That Which is Seen, and That Which is Not Seen. I recommend that you read it to understand how lobbyists take YOUR invisible money and jobs to "produce" visible gains. For a modern example, read how Congress is wasting $billions to send "patriot coal" to Germany. We keep our soldiers warm at (at least) triple the cash/carbon cost of using local energy

  3. Vancouver's "alcohol deregulation" creates windfalls for liquor stores, probably not by accident

  4. Energy lobbyists overestimate the cost of new regulations, but so do regulators. Reasons: (1) regulators are from or work for industry or (2) people are afraid of change

  5. A thousand years of European border changes may explain why the EU won a Nobel Peace Prize for NOT going to war. (Russia is doing its best to foul that record.)

27 Mar 2014

The tragedy of the industrialization of China

S writes:*

Ever since the beginning of 2013, I have been hearing in news about severe air pollution in many major cities of China. The situation has worsened over the past few years. Some scientists say that it will take China more than ten years to clean the polluted air. My grandfather has once said to me: “I am excited to see those pavilions with highly advanced technologies in the great Expo, but I also miss the fresh air and clean streets there used to be”. “There ain't no such thing as a free lunch", says Edwin G. Dolan. Everything in this world has a cost. While China is enjoying all the benefits under a booming economy, the country must also consider the negative impacts of industrialization on its environment. Some of the most polluted cities in China are revolved around Hebei province. The province is known as the center of the country’s steel and cement production. These industries account for the main cause of the heavy smog in the capital city of China, Beijing. The situation is paradoxical, if the government forces to shut down the factories, millions of people will lose jobs and suffer from a bad economy. However, if the government does not take any actions, people will also suffer from deterioration in health caused by the toxic smog. In a critical time like this, I suggest the government to shut down factories that frequently ignore pollution limits, reduce exports of steel and subsidize in other industries. In the meantime, the government needs to protect workers from sudden unemployment, it is necessary to invent instruments similar to the Employment Insurance in Canada. In the long run, it also needs to invest in eco-friendly production technologies and develop stronger institutions for environmental regulation.

Bottom Line: Severe air pollution in China harm present and future generations. The government needs to take the lead in environmental management before everything is too late!

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

The Implement of Chinese Environmental Policy

W writes:*

So far, China is emitting the most carbon dioxide in the world. The Chinese government is saying that we have to lower the carbon dioxide. However, as the local governments carry out, local officers are implementing it in different purpose other than corruption.

As my family experience, the local officers in order to achieve the goal of reducing carbon dioxide, they shut down the electricity of the entire industry park in town, for example, every Monday, and Wednesday. Therefore, the factories could not produce any more during Mondays and Wednesdays. No production, no pollution, very “brilliant” decision. Actually, it is impossible for factories to stop working. They have their own generators. Generators burn diesels, then a shortage of diesels occurred.

That’s how the officers achieve their goal to reduce carbon dioxide. On the surface, the carbon dioxide is reduced because of no production. Statistical bureau collect data from local government not from individual factories. In fact, the pollution is even more, individual generators can’t be as efficient as power plant. We have to find out a way that can really help to reduce the pollution.

Bottom Line: The policy of reducing carbon dioxide is actually increasing carbon dioxide.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

Are we losing Winter Olympics?

Shengxi Cheng writes:*

Global warming is challenging the Winter Olympics Games. Even though audiences enjoy viewing the game in warm winters, but the Olympians are getting harder to present their best performances under inconsistent weathers. The reason for that is many athletes had to pay more attention on their safety rather than competing since the snow condition was too unstable (especially the snow gets very puffy when weather is not cold enough). I have read some news about one of the American skier who wrote an open letter last week about how the climate change has lead to a poorer condition for winter games, and there are over 100 Olympians in the 2014 Winter Olympics who have signed the letter. So, how could we do better in the future? According to “The Atlantic”, Olympians have informed many world leaders to reduce emission, promote clean energy operations, and speed up on finding solutions in the Climate Change Convention in 2015. If the global warming crisis cannot be solved, the Olympic organizers have to spend a whole year generate man-made snow, or host the event at Antarctica (If it is still cold enough). If that really happened, we will lose not only the Winter Olympic but also our lives.

Under the current circumstances, an enforcement on emission reduction could reduced the GDP (the most obvious way to see the industry development) in short-term. However it benefits the overall society as follow a way of long term sustainable development, every country has realize the severity of global warming problem, but it is difficult to stop because there are many barriers especially the heavy industry on underdeveloped countries. The Winter Olympic problem has redirect our focus to global warming, everyone should do own contribution for our environment.

Bottom Line: Global warming is stealing our Winter Olympic.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

26 Mar 2014

BC Government Unveils LNG Taxation Plan

Mark Levesque writes:*

On February 18 the Government of BC tabled its 2014 budget. In it the government provided details on its plans to develop liquefied natural gas in the province. LNG development is an important natural resource for the government, as the revenues they expect to receive from its development will be critical to the Liberal Party’s election promise of creating a debt-free BC [pdf].

LNG is a natural resource that exists in a liquefied state when cooled to -162 degrees Celsius. In its liquid state the resource is easier and safer to transport, particularly because as a liquid it is safe to transport at standard levels of pressurization, making it non-explosive.

However, while proponents of LNG development are quick to highlight its environmental benefits, there are costs as well. In particular, developing LNG in BC would require an expansion of the provincial energy system, such as a new dam along the Peace River. While dams provide renewable energy, they have environmental costs associated with them as well.

Bottom Line: LNG has tremendous potential for BC, but the decision to develop it must take into consideration the full spectrum of costs and benefits associated with its development.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

Calamities of fossil fuels

Tak Keung Yiu writes:*

Fossil fuels are the most important resources in the world. However, they are also one of the major contributors to environmental pollution. Fossil fuels consist of non-renewable resources, which mean that they take a long time to be formed and are likely to be depleted before this occurs again. While predictions of the depletion of fossil fuel is subject to change as new sources are discovered, it is already widely accepted that, one day, they will be gone. The global consumption of fossil fuels has increased over the past century, meaning that prices have increased as well. As prices increase, more unconventional fossil fuels suddenly become viable alternatives.

The burning of fossil fuels emits nitrogen oxide emissions. This is a result of nitrogen and oxygen gases in the air combining at high temperatures due to combustion. It has become a major environmental problem. Nitrogen oxides are mainly a by-product of human activities, such as transportation and industry. These gases also cause acid rain which affects the health of forests and lower the pH levels of waterways. This contributes to decreased health in plants and animals that rely on these other natural resources.

It is a growing concern in many countries. China is one such country where increased industry has led to increased pollution. Tiny particles in the air lead to damage in human lung and cardiovascular tissues, contributing to cancer, cardiovascular disease, and asthma.

People must invest into renewable resources in order to lower the use of non-renewable resources. This will also help lower prices and reduce pollution from using Fossil fuels. Technologies should be improved to increase energy efficiency and pollution controls.

Bottom Line: Pollution from burning Fossil fuels can be alleviated by use renewable resources and improve the Technologies to increase energy efficiency.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

Water Shortage and Rates in California

Chris Scott writes:*

The extreme water supply shortage in California has to be addressed by water managers and the rates need to reflect the current cost to supply the resource. The picture above of the Folsom Lake Reservoir, which provides water for nearly 500,000 people in California, illustrates the severity of the drought currently taking place. The picture on the left shows the reservoir on July 20, 2011 at 97% of its total capacity compared to the picture on the right of the reservoir just over a month ago at 17% of its total capacity. Folsom Lake and every other major water reservoir in California is currently significantly under their historical averages of water capacity for this time of year. With this trend showing up over the past few years, it has me wondering why the prices or rate structures have not changed drastically.

In California the two most popular water rate structures are “uniform rates” and “increasing block rates”. I agree that both of these structures are good in the sense that the people that are consuming the most water have the highest bills. What I disagree with is that in most cases in California it is the commercial and industrial customers, who use significantly more water than the residential customers, that pay the uniform rates and it is the residential customers that pay the increasing block rates. This means that for residential customers, who use far less compared to commercial customers, have increasing per unit costs, therefore decreasing demand for water the more they consume. Commercial customers on the other hand, have the same per unit cost no matter how much water they consume, therefore the same demand for water regardless of consumption level. This constant per unit cost for commercial customers gives no incentive to use less water during a drought because their variable costs remain the same regardless of consumption.

Bottom Line: Since water is a finite resource, especially in California, it only makes sense to have increasing block rates for everyone. Since the more water you consume the less is available for everyone else, your per unit rate for water should increase the more water you consume to reflect the water you are taking away from others consuming. If commercial customers see their variable costs going up and their margins going down, this gives them an incentive to be more efficient with their consumption or face diminishing returns.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

Six years of aguanomics

On the fifth anniversary of this blog, I wrote that Cornelia and I were returning to North America to reconnect with friends and family and find jobs. I also predicted that I would finish my book before we left Europe in July.

We did move to Vancouver, find jobs, see old friends and make new friends, but we also decided that it's better to live in Amsterdam, so we're moving back in less than a month.

I didn't start Living with Water Scarcity until September and it's nearly done. Today is the first time I've posted the cover anywhere. The interior has more words and some great illustrations, so I hope you're looking forward to reading it. (It's really interesting to see how people buy, review and use books. I also like the design/publish/marketing process, as it lets me be creative about presenting ideas.)

This blog is where that book and The End of Abundance began. It's a place for me to write about water issues and for us to discuss them. Aguanomics has been -- and continues -- to be a place of ideas (and an occasional joke). Your participation is what makes those discussions interesting, and I plan to continue blogging into the future. (I have an idea for another blog; I'll reveal it -- if it still seems like a good idea -- later this year.)

World water year, every year

Every year, the media and various water-oriented organizations indulge in a one-day frenzy of awareness. It's ironic that all the work put into those results and reports is often wasted because authors are exhausted and readers cannot deal with the surge of information. (I delete all the press releases.) This blog covers water issues year 'round because (1) there's plenty of interesting stuff going on all the time and (2) it takes time to understand the links and forces that drive water policies, allocations, and results.

Yesterday, for example, I made one point several times: don't look at the net impacts (=benefits-costs) of a policy; look at the winners and losers if you want to know how it came into effect and will work. (I was talking about policies that allow oil/gas companies to pollute groundwater next to First Nations settlements in BC and Alberta.)

I've found that it's better to focus on the same, simple ideas until people get them. There are a lot of sophisticated models, analyses, data, etc. related to water, but most people lack the time to understand them and a reason to do so. They want to know a few simple things to do first, which makes sense to me.

Here are a few, in no particular order:
  • If you want a particular environmental status, then make sure you leave adequate water to achieve it
  • If water supplies are running low, raise the price of water to reduce quantity demanded. For retail water, this means raising the price of tap water. For bulk water (irrigation, industry), this means market pricing of available quantities
  • Make sure that the people who benefit from infrastructure pay for it
  • Businesses can pay the full cost of water because it's just another input. People can pay the full cost also -- except the very poorest people (<$2/day)
  • Politics can make winners and losers, so avoid political solutions for private goods (most water)
  • and so on...
Me, up a Colombian tree
It's very cool how people are really interested in water issues (I always have something to discuss with strangers), but it's also a little sad. Bad water policies attract attention, concern and headlines; good water policies are invisible.

FYI, I've tagged a number of posts "AG101" for aguanomics 101, i.e., posts that cover foundational or recurring themes. It's sometimes hard to know what to read when there are 4,800 posts!

Some statistics

As with last year, I see that overall traffic and new visitors fell in the past year vs. the year before [pdf]. The sad explanation is that people are not as interested in water issues or my blog. The happy explanation is that people came by, learned what they wanted to, and left. The sad explanation is more likely, but it's also hard to keep people's attention on water in the same way as you can keep their attention on a broader economics blog (e.g., Marginal Revolution). Or perhaps people have less time for everything, as they try to "do" twitter, reddit and other websites I haven't heard of. (Or perhaps, these statistics miss ±1,700 people reading the blog via RSS and other remote services.)

The blog's technorati rank was 3,135/105,767 in 2011 and it's 3,199/66,613 now (authority has fallen from 482 to 435). Fierce competition at the top has kept me in place at the same time as a bunch of blogs have shut down.

Spam provides a measure of (perverted) prestige. I get a few offers per week from people who want to write guest posts advertorials. Spammers leave a few comments per day. #sopopular

Another fact of interest is the geographical change in aguanomics's audience, which has grown worldwide at the same time as it's fallen in the US [pdf]. That diversification is a useful sign.

Bottom Line

I like blogging and will continue to do so as I return to Amsterdam and look into work as a consultant and perhaps a lecturer. I hope that you're enjoying the blog -- feel free to send suggestions, questions and gossip.


25 Mar 2014

Hong Kong: Waste-Disposal Charge Ineffective Alone, Educating the Public Brings Result

Christina Lam writes:*

Garbage is a significant issue that influences environment. After garbage trucks pick up and drive away with the garbage that we produce, most of us feel that our garbage is gone and has somehow disappeared. Often, people have no idea about how garbage can affect the environment.

In my hometown Hong Kong, garbage has become an issue. Hong Kong is a tiny city with more than 7 million people. Can you imagine there are only three landfills and some of them are close to residents? As garbage decomposition takes many years, especially non-recyclable garbage, the Hong Kong government is prompted to act to reduce the volume of household garbage.

Hong Kong government was planning on charging families for waste disposal in an attempt to reduce the volume of household garbage. Although Taipei and Seoul have implemented this policy, I do not feel that it will work for Hong Kong. As Hong Kong has a wide wealth disparity, this policy does not solve the problem effectively. The cost of waste disposal may cost too much for the poor, but the rich may feel nothing at all.

There is no real solution to the problem of garbage. In my opinion, one way to reduce the quantity of garbage in Hong Kong is to provide a good education on garbage classification. Countries like Canada and Japan are particularly successful with this type of education. Although Hong Kong has implemented garbage classification, people are not attentive enough nor care to actually sort their garbage. By educating the people in Hong Kong, they would have a better understanding on the advantages of sorting their garbage and recyclables. Moreover, the Hong Kong government can encourage countries to use recycled products, such as providing subsidies. These recommendations in addition to the fees can boost garbage reduction as imposing garbage charge alone is not effective enough for a substantial change.

Bottom Line: Charging garbage fee alone is ineffective in substantially reducing garbage in Hong Kong, but education and encourage policies are tools in to help encourage the reduction of garbage in Hong Kong.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

The Impact of Cars on the Health of Individuals

Irene Ma writes:*

The increased demand for cars over the past few decades has had a negative impact on the health of individuals. As people spend more time in their cars they after are not able to engage in healthier modes of transportation such as walking, biking, or taking transit. The more time that is spent driving, especially in rush hour traffic, increases the stress levels of individuals which can potentially have a negative impact on their mental and physical health. This suggests that resources could be allocated more efficiently since driving consumes a large amount of resources when compared to other modes of transportation. In addition to the consumption of resources, driving also has a detrimental effect on the health of others because of the pollution that is emitted by cars.

The solutions for this issue involves several possibilities: a) providing current drivers with discounts on monthly transit passes to change their behaviour, b) providing greater monetary incentives for people to purchase more fuel efficient vehicles to reduce pollution, and c) increasing the cost associated with driving (gas, insurance, and licensing fees) to discourage driving, which can help to reduce overall congestion. The suggested solutions will be effective at changing behaviours, reducing pollution, and improving congestion which can help to enhancing the health of individuals.

Bottom Line: In being able to decrease the amount of time people spend driving will help to improve their health while also reducing both pollution and congestion.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

Beijing is like Los Angeles

Zhe Zhang writes:*

Haze in Beijing and some other cities in China has become a serious pollution problem now. People are paying much attention on air quality than before since it has a big impact on people's life. People living in those cities are suggested to reduce their outdoor activities, some elementary schools even cancelled their outdoor P.E classes.

Fortunately, the central government is taking actions to cut pollution: targeting carbon per unit of GDP, implementing environmental laws, and trying to move in the right direction. The pollution in China today reminds me of the air pollution happened in Los Angeles last century, I think China is going through the same process during development, but as citizens and the government concern more about the pollution, this issue will be solved in the future.

Bottom Line: China will learn the lesson of how to develop sustainably.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

Speed blogging

  1. Duke Energy spills lots of toxic stuff. Political friends try to bail Duke out. Caught by enviros and EPA and reversed. We need to replace crony capitalism with performance insurance [pdf] to reduce these scams (AND improve oversight AND pay for clean ups)

  2. ND frackers have been dumping radioactive oil waste in water. Frackers CAN pay and SHOULD pay to produce more cleanly. I said that nearly 3 years ago in this (prescient?) op/ed, where I also explain how clean production is more profitable

  3. Racist price gouging on bottled water in W VA? Price discrimination (selling scarce water for more, to everyone) is better than racial discrimination

  4. Fleck covers the (experimental) restoration of flows on the Colorado. Fascinating insights on hydrology vs anthropology

  5. Good article discussing how northern California irrigators are not doing the Delta any favors
H/T to RM

24 Mar 2014

Monday funnies

I think they've got incentives figured out.

Palm Oil Delusion

Karen Keung writes:*

Why do people buy handmade soaps? Its consumers consists of those who support a more natural and sustainable lifestyle. As a small-scale soap merchant, palm oil has become an indispensable ingredient in creating high quality, vegan friendly products. However, the use of palm oil has become controversial; its method of production causes immense deforestation in palm oil producing countries and threatens endangered animals that reside in rain forests, such as the Sumatran Orangutans.

The amount of palm oil my business requires is unlikely to affect rainforests on such a scale – the problem stems from the increased demand for biodiesel. In order to compete in this niche market a switch must be made from regular palm oil to higher priced “sustainable” palm oil to adhere to consumer’s lifestyles and morals. Currently, my palm oil supplier only stocks the regular sustainable type and the organic type, with the organic one priced even higher; both are labeled “Certified Sustainable Source”. This leads me to question the authenticity of sustainability and where the extra costs of the oils go.

Inconspicuously certified organic palm oil may not be sustainable – e.g. the method of transporting oil is environmentally harmful. Certified Sustainable sources, such as RSPO, ensure that the planting, harvesting, packaging, and transporting of oil are environmentally responsible and are fairtrade certified. This means that certified sustainable palm oil should already be organic and extra steps are taken to guarantee environmental sustainability. Knowledge that my personal choices will not affect the problem as a whole, there are certain questions that require analysis when purchasing the oil:

What methods do organizations utilize to ensure sustainability? Are the logistics transparent? Why are there two types of certified sustainable oils to choose from when both should already be organic?

Bottom Line: After in-depth consideration, the decision is to appeal to consumers and support the environment. Immense reduction in palm oil usage should be applied and suitable substitutions should be sought

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

Growing Health Risks of Traffic Pollution in Major Canadian Cities

Ko Chun Ming writes:*

Traffic-related pollution is a growing health concern for Canadians living in large cities.

The main reason why this problem occurs is because large cities such as Toronto, Vancouver, and Calgary attract growing numbers of people from all over the country who are seeking out job opportunities and a diversity of life experiences. While migration to large cities is positive for the economy, this growth is accompanied by increased traffic and gas emissions. Another reason why this problem occurs is that many citizens remain unaware of the impacts of traffic pollution. For this reason, many fail to alter their traveling habits.

In addition to pollution exposure directly from traffic, it is estimated that 10 million Canadians are exposed to pollutants because of their close proximity to major urban roads. Health experts claim that this type of exposure is linked to many health problems, including heart disease, pulmonary problems, lung cancer, and premature births.

Health experts have identified four main solutions to this problem. First, people can reduce vehicle emissions by purchasing electric or hybrid cars. Second, governments could improve infrastructure by creating more efficient roadways and new cycling routes. Third, governments could adopt new city management that places buildings further away from major roadways. Fourth, governments could reduce congestion by educating the general public about the impacts of traffic-related pollution and by encouraging new traveling habits.

Bottom Line: Traffic-related pollution can be mitigated by new infrastructure policies and greater citizen awareness about the nature and impacts of this growing problem.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

The benefit of solar model

Kailun Fan writes:*

The invention of solar energy relives the tight supply of other natural resources. To use solar energy in order to replace other natural resources such as fossil fuel has following benefits. First, the sunshine is widespread and has no regional restrictions. You can get it anywhere if you want, whether land or sea, mountains or islands. It can be directly developed and utilized; also it does not need mining and transportation. Secondly, it can protect environment and using solar energy, it not only protect environment, but also will not pollute the environment. It is one of the cleanest energy and will not worsen pollution. Thirdly, the solar energy has huge capacity; the radiation of solar that can reach the surface of the earth each year is equivalent to 130 trillion tons of coal. Today, the total amount of solar energy is the world’s largest energy that can be developed. Finally, the persistence of the solar energy, according to the current production rate of nuclear that produced by sun, we can estimate the hydrogen capacity can be maintained ten billions of years. However, the life of the earth will be around billions of years, those data tell us that sun’s energy is inexhaustible.

Bottom Line: However, the use of solar energy is still in initial stage, mainly used as solar hot water system, solar greenhouse and solar power, we can apply solar energy to all aspects in near future.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

Water tariffs and consumption in California

I asked my students to look up water prices, consumption and temperatures in California [google form]. After removing duplicate cities, I got information from 53 cities [xlsx].*

I then calculated an average price per 1,000 gallons for a household using 7,500 gallons/month (that's about 250 gallons/day or 930 liters/day), which works out to about 100 gallons/day for a household of 2.5 people -- roughly the same consumption of San Francisco residents.

A simple statistical analysis shows that consumption is positively correlated with fixed costs and temperature and negatively correlated with variable costs and precipitation.

The rationale behind temperature and precipitation is simple: people use more water (on lawns) when they live in arid places.

I cannot think of a good reason for the consumption-fixed cost relationship, except that wealthier cities may spend more on infrastructure for people who use more water.

The negative relationship between price and consumption is obvious (to an economist): people use less water when it's expensive.**

All of these variables impact consumption in different ways, but their weighted impact can be estimated by running a multivariate regression. When I do this,*** I find that consumption and price effects persist, but temperature and precipitation effects do not.

These results are easy to interpret when you add a little common sense. An increase in fixed charges is associated with an increase in consumption, but it's unlikely that raising them will cause consumption to increase. There's an underlying, omitted variable that's driving both results.

The effect of price is more straightforward: higher volumetric prices are associated with lower consumption. Indeed, they probably reduce it.

For more on this, check out American Water's 2012 survey of prices. There, you will see that Las Vegas prices are half San Francisco prices. Where's the most expensive water in the US (in that survey)? Seattle and Portland. That's because the price of water service reflects the price of infrastructure, not water scarcity.

Bottom Line: The law of demand holds. The easiest way to lower water consumption is raise prices.

* Hey, Daly City! Chill out! You don't need 11-step increasing block rates [pdf]. Try two, like San francisco or -- better -- one. Then customers can understand what's going on. Speaking of that, I dropped two cities with budget-based prices, because it's impossible to know the price of water for an average customer. I hope managers are setting them right (and fairly) because no outsider will even know!

** It's more accurate to compare the cost of water service in terms of fixed costs plus variable costs for 7,500 gallons of monthly use, but I just looked at variable charges at that consumption. See the XLSX for service costs per 1,000 gallons.

*** Results:

reg pcc fc volume temp precip, ro
Number of obs 53
F(4,48) 7.16
Prob > F 0.0001
R-squared 0.23
Root MSE 89.5
Per capita consumption Coef t P>t [95% Conf. Interval]
Fixed charges 4.2 2.33 0.024 0.5 7.8
Volumetric charges -18.2 -2.96 0.0 -30.5 -5.8
Average temp 3.9 0.62 0.539 -8.7 16.4
Annual precip -0.08 -0.81 0.423 -.28 .12
_constant 165 1.19 0.238 -112 442

21 Mar 2014

Friday party!

There are many more here

... and here's a NSFW (but funny) one...

Happy Spring Equinox!

Genetically modified foods are harmful

Mei Ling Fan writes:*

In simple terms, GM foods are created by taking specific gene from one plant and insert it into another plant. Grains, vegetables and fruits can all be genetically modified through genetic engineering technologies. The purpose of creating GM foods are increase plant yields and enhance nutrition. As we all know, in order for human, other animals and plants to survive on the earth, the environment of Mother Nature must stay balanced. GM plants can break that balance by completely annihilate the living environment of certain spices of insects and plants. In long run, when Mother Nature corrects herself, it may come to our own kind.

The most controversial topic on GM foods is its effects on human health. The main concern is that there are no research in present can prove whether GM foods are harmful to human health or not. However it is obvious that if people continue consuming GM foods without knowing its effects, it will be too late to reverse when the disaster strikes.

Bottom Line: Therefore, in order to prevent massive disaster from happening and to protect Mother Nature and ourselves, GM foods need to be protested by us all.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

Smog in China is not severe enough?!

Z writes:*

Someone says china has the dirtiest air in the world. It might be right but not the top one in history. In 1952, London suffered exactly the same problem, so what made them decide to solve their smog problem? According to the story I read last week, “From December 5 to 9, the smog killed approximately 120,000 people and shocked the world into starting the environmental movement."

It seems like the current environment situation in China is not severe enough to draw enough attention around the world, or maybe some countries just pretend to ignore the situation that Chinese people are facing. According to the study from the journal Proceedings of the National Academy of Science, about a third of china’s air pollutants are associated with production of goods for export. If the Chinese government started working on air pollution, reducing the export which means affect other countries' economy will not be avoided. I think all these countries are just focusing on their short-term benefit and turning a deaf ear to the long-term ones. Yes, China’s smog is a regional disaster but just temporarily. A new study says that “Asia’s pollution might be having climactic effects far greater than previously quantified, contributing to more intense cyclones over the northwest Pacific Ocean."

Bottom Line: Solving the current smog situation in China needs all other countries attention and help, they need to give pressure to Chinese government even there are some negative economic effects on their own countries.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

The Great Bear Rainforest

Ruan Tao writes:*

The Great Bear Rainforest is a zone of coastal temperate rainforest located at the North and Central Coast of British Columbia. It is home to many Aboriginals, animals and plants. The environmental affairs of the Great Bear Rainforest have been discussed for many years. However, it will still take quite a long time to fully resolve the problems. The resolving of these problems needs efforts of different kinds of social groups such as the B.C government, forestry industry, environmental organizations and the First Nations government. As a whole, the First Nations should be the one who have legal rights to the resource management because they are the owners of the forest and enjoy the benefits and bear the costs of outcomes mostly. Moreover, any other group that are stakeholders of the Great Bear Rainforest should attain an opportunity to participate in the decision-making process and address various kinds of novel views to improve the quality of the decision such as extracting resources or protecting the environment.

Bottom Line: The Great Bear Rainforest affairs should be handled by different kinds of social groups and they need to co-operate in order to generate the best outcomes of the resource management and the environmental protection.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

20 Mar 2014

Lifecycle of an iPhone

Kai Yang Yap writes:*

One of the revolutionizing innovations in the tech industry is the line of iPhone by Apple. This product has generated throngs of followers who religiously purchase every new product that is introduced. The purpose of this blog post is to highlight a few shadow prices that were not taken into account by consumers when making a decision to purchase an iPhone.

Coltan is a mineral that can be found in every iPhones as its unique semi-conductor attributes allows storing charges. It is also recognized as a blood mineral as it has funded civil wars which has killed 5 million people and resulted in rape of 300, 000 women in the past 15 years.

IPhones are produced by one of the largest manufacturing companies, Foxconn. There have been many reported controversies regarding the work conditions, child labor and even workers committing suicide.

Bottom Line: This post isn’t to satisfy some unfulfilled vendetta against the usage of technology. It is important that we as consumers are aware of hidden external cost when making a decision participate in any transactions.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

PM2.5-The Pain of Breathing

Steven Kwok writes:*

In nowadays, most Chinese people concern about neither the increasing wages nor the prices, but a breath of fresh air. Since many regions in China especially in developed areas, the air pollution is very serious. The most famous air pollution is the haze problem, which is the most severe at the capital city of China—Beijing. The air quality in Beijing is very poor since the excessive PM2.5. Therefore, there are many new disease names have been created, for example “Beijing cough”, which is one kind of respiratory diseases caused by air pollution. Since the excessive pursuit of GDP growth at the expense of the environment, Beijing at present is same as a few decades ago in London and the result is health problem. In addition, the poor air quality gives a great inconvenience to the people in their daily lives, for instance people have to wear mask when they go outside so the masks become a necessity to Chinese nowadays. Thus, the people in China hope the Chinese government could introduce a policy of environmental protection, which includes energy conservation, and emission reduction and slow down in economic growth in order to say goodbye to PM2.5 and to give back us a blue sky and a fresh air.

Bottom Line: Do not sacrifice the environment for the growth of GDP

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

Say Goodbye to nuclear energy in Europe?

Catherine Li writes:*

Due to the severe consequences of “Fukushima Daiichi nuclear disaster” in 2011, Germany, one of the most nuclear energy dependent European countries, has speeded up its changing process from nuclear energy to alternative energy. The government made a political decision on June 6th, 2011, that shutting down all its 17 nuclear plants by 2022. As followers, Swiss and Belgium also made similar decisions. Even France, a country highly dependent on nuclear energy, made the commitment of reducing it nuclear usage from current 75% to 50%. More other European countries, such as Ireland and Austria, they have decided even before Fukushima to be free of nuclear energy, and now Europe has a strong alliance against nuclear power. Will they bring Europe to say Goodbye to nuclear energy?

It is hard to say. On the one hand, the nuclear free countries have to find more followers within European Union, because countries like France and UK, they still have strong desire to keep or even extend their nuclear power network. On the other hand, how to minimize the cost of fulfill the vacancy by “nuclear power-off”? The countries have to pay more on discovering new alternative energy and more advanced technology. Then the tax payers will somehow undertake this cost. One analysis shows that in Germany, consumers are already bearing higher electricity prices than before.

There are still lots of challenges for whole Europe to say Goodbye to nuclear power in a short term. But I believe that what Germany and other free-nuclear countries are doing is the correct way to protect our planet and the global environment. Canada, with only one province with nuclear plants (Ontario), is worth thinking, if such kind of change would also make sense--by using more renewable resources.

Bottom Line: To protect our own planet or even individual ourselves, the transfer from nuclear energy to more renewable resource is worthwhile.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

Speed blogging

  1. Circle of Blue investigates the institutional failures that made the W VA toxic spill more likely

  2. Customers who see "neighbors'" water consumption drop their use by 5 percent on average [pdf]. That's a nice way to shift the demand curve in, but I prefer to use higher prices to slide down the demand curve! (See page 14 of my first book [pdf])

  3. Tim Haab takes apart Congress's backpeddling on removing flood insurance subsidies. So sad

  4. Some perspective on green infrastructure

  5. Here's a big, recent OECD report on Dutch water governance [pdf]. I haven't read it, but I don't see any problem with pushing for more engagement with citizens on goals, spending, etc.

  6. Iran faces a "dead lake" problem similar to the Aral Sea. It's more likely that the lake will survive with presidential backing, but not if farmers are allowed to irrigate away all its waters
H/Ts to RM and TM

19 Mar 2014

An environmental dilemma

MC writes:*

Air pollution in China has been a hot topic over the past few years. Recently, it’s brought up again because of PM2.5. Almost all the cities along the eastern coastline suffered from this crisis.

Burning coal takes a large proportion in bad air quality. In northern part of China, people especially need coal (as a major energy source) to gain heat in winter. The Chinese use and produce coal very extensively because it's cheaper in every way relative to other sources, and at the same time they are frustrated about the environment since it is like a dilemma: they need coal but coal gives them trouble. Two decades ago, people can still enjoy the shiny day and a starry night with maybe not so much money in hand, but now, the atmosphere is yellow and the money in hand can’t necessarily solve the problem. On the other hand, the government put too much attention on economic growth but neglected the environmental impact on the whole society and people’s welfare. It is a similar dilemma for the government: a rapid growth is at a cost of severe air pollution.

Bottom Line: It’s an environmental dilemma for the Chinese because a country like China with command economy needs to do something to meet the “growth standard”, in this case, the coal production. However, the production is too much that it generates a concerning negative externality. The government has to design efficient regulations and take effective actions to reduce anxiety from both globe and humankind.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

Do you know about peak phosphorus?

Jiwon Choi writes:*

Today, many people are concerned about peak oil, which means after reaching the maximum point of production, suddenly, oil supply will decrease. Oil is an important resource in agriculture, transportation, and energy. However, most people are forgetting about phosphorus, which is an important source of energy in agricultural system. What is phosphorus and peak phosphorus? It is a chemical, the 15th element from the periodic table, which can be obtained from mining phosphate rocks. Phosphorus is an important source of energy to make a fertilizer and we were using phosphorus to produce fertilizer more than a hundreds of years. Recently, demand on fertilizers increased, which means increase in demand of phosphorus. The total reserve of phosphate rocks across the country is over 51000 metric tons. Under the sea, there are more phosphate rocks, but it is hard to mining it.

Peak phosphorus will occur when phosphate rocks run out which will reduce supply of phosphorus. The side effect from running out of phosphorus will be an increase in price of fertilizers, and food shortage. This means it will be hard to grow crops and will cause increase in price of corns and wheat. Corns and sugar canes are sources of foods, but also it is source of energy which we can obtain ethanol from them. Peak phosphorus will cause increase food price, food shortage and energy price. Then what is the solution to this situation? In order to obtain phosphorus other than rocks, we can recycle human bio-waste. Using bio-waste is efficient, because waste can be recyclable and it reduces the demands of phosphate rocks. It can also help in regulating population growth in high population countries.**

By limiting population rate, it will decrease food demand, and it will prevent over mining of phosphate rocks. If our population grew rapidly, there would be more demand on foods and peak phosphor might reach earlier than 2033. In twenty years, scientists are expecting phosphorus will reach the peak of its production. We need to do research on new technologies that can help us obtain phosphorus from something other than phosphate rocks.

Bottom Line: In my point of view, what I learned in my resource management class, peak phosphorus will be happen if we overuse phosphate rocks or fail to find substitution for phosphate rocks. We need to find new ways of make new kind of fertilizers.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

** Editor's note: I'm very curious about this connection.

China Is Hurting Itself

C writes:*

Nowadays, China is facing one of the most crucial factors of environmental issues, which is called “Wu Mai” (that is “haze” in Chinese). According to the WWF, in recent decades, China has suffered from many different kinds of environmental problems. Also in the article, EU Trade Commissioner Peter Mandelson claimed that “China produces a new coal-fired power station every week, and will be the world’s biggest emitter of carbon dioxide by 2030”.

As a Chinese citizen, without angry, I was quite nervous and sad after my father told me many stories, which happened in my hometown---Nanjing. For example, people are debating the best model numbers of 3M masks to buy through the Internet, and many of them make use of air purifiers to clean the indoor air, same as my parents.

Generally, everything of value has a cost. China’s economy has developed rapidly, but at a price. Power plants, factories and heavy industries are all belching out black, dirty air, at the cost of people health and our environment. However, if everyone is sick, are there any benefits to improve the economic growth? Back to the history, what Beijing is experiencing nowadays, is quite similar to what happened in London 1952 when a temperature inversion combined with emissions from domestic coal fires to kill thousands of people, which including many young and old people. Eventually, London had spent almost 30 years to bring the pollution under control; but it may take more time for China unless the Chinese government recognizes the trade off between economic development and environmental equity.

Bottom Line: Chinese government needs to combat air pollution crisis

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

18 Mar 2014

Detergent saves wildlife!

Kelly Pan writes:*

I went to a supermarket planned to buy some household cleaning products last week. When I was wandering around the aisle where carries different brands of detergents, one particular dish soap brand caught my eyes. The reason was this brand (company) "helps wildlife". I remember I have seen a TV commercial shows it helps to clean marine birds which have been exposed to oil spills. As we have learned earlier, oil spills can have some serious negative impacts on marine ecosystem.

The advertisement makes consumers to buy their products, not only because the soap cleans dishes but also it is good for the environment by protecting marine birds. The price we paid is not only for the product itself; we can also help the environment and the animals. The company can make more money by donating part of its profits.

Bottom Line: Companies should not only concern about profits, they also need to develop more products which can help our environment and ecosystem.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

To buy, or not to buy, that is the question

Edward Liang writes:*

The most recent big new for tech savvy people was the announcement of new Samsung galaxy S5. Without going into too much detail on the features, basically the S5 is bigger, better, and faster compared to the last generation. These aspects sound great on paper, but the question is, does average consumer really “need” the new features? Or are they just another marketing gimmick like every other press conference from other manufacturers? The problem here is the benefits from what the marketing team tells us is way bigger than the actual benefit itself. For example, the marketing may empathize that with the better camera you can take pictures that are above HD quality, but can an average person really distinguish the difference between HD and above HD quality? Even if the person can distinguish it, does he really need it? The necessity problem really extends into the production problem of newer cellphones, as majority of them are assembled in developing countries, which have lower labour cost, but the product will be sold at developed countries for much higher price. Not only the inequality of the revenue and income wage during production, also pollutions from the production, and the E-waste from the old cellphones.

Bottom Line: There will always be newer and better products every year, but the purchasing power is depending on the consumer; sometimes whether we should buy the newer cellphone to satisfy our wants or just stick with our old phones that are just as good, the decision can be tough. Ultimately, to buy, or not to buy, that is not the only question, we should also consider all the externalities before making the purchase decision.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

Fresh Water Scarcity

Alvin Chien writes:*

In many ares of the world fresh water is scarce. Smart water management can help preserve this resource, and reduce the costs of treating or importing water. What are the causes of water scarcity? Water scarcity is caused by environmental and human factors. In hot dry climates, such as deserts, there is a general lack of fresh water sources. Some areas also experience temporary or seasonal droughts that limit the amount of available fresh water. The state of California in the U.S., for example is currently experiencing a severe drought.

Human factors also contribute to scarcity. Water is used for irrigation, as well as many other purposes like drinking, cleaning and washing. How people collect and recycle water also has an impact on the amount of fresh water available for various uses. Fresh water scarcity can have severe effects. Crops can die, and people can go hungry or suffer serious health problems from the resulting lack of food and drinking water. Water scarcity affects every part of an ecosystem, including all plants and animals.

Bottom Line: Proper water management is therefore very important. Water management solutions include collection and storage, rationing, water treatment centers, and even importing/exporting. Applying these solutions effectively means that water can be shared between places that have lots and those that do not have enough, and conserved in places where scarcity exists.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

Speed blogging

  1. Santa Cruz, California is responding to "serious water shortage" like a conflicted drunk: YES, you can water your yard but NO, you will be fined $100 if you do so at the wrong time. After giving up on a link, I finally found Santa Cruz's water prices [pdf], which are cheap for some water but expensive for more. Those prices are clearly NOT high enough, since per capita use is 95 gallons/person/day (Sydney is about half that), and that $100 fine will buy you 20*748 = approx 15,000 gallons of water. Raise prices and put down the gun!

  2. Santa Cruz is not as crazy as Los Angeles, which puts lawns FAR ahead of people. I wrote about that on Zocalo Public Square. The obvious solution is to end LA's policy of allocating more water to people (and politicians) with large lots. The long-term solution is to listen to Andy of TreePeople: trees can improve Southern California's water quality, storage and flows

  3. I spoke on Los Angeles, the Delta and other local issues last week ("Living with Water Scarcity -- Options for California" -- PDF slides and 65 min MP3) at Stanford's Woods Institute for the Environment

  4. More evidence that large dams are uneconomical (they don't even get into negative environmental impacts)

  5. Competition and transparency: private water vendors help the poor (in Karachi, Pakistan) when they replace failing public services. Kenyans who could complain about failing water service (on their mobile phones) got a lot more [pdf]

  6. A long history of the All American CanalCalifornia's big (SWP & CVP) canals and some recent news on Imperial Valley's conflict over fallowing (for money) and farming (for the community). I predict that IID is going to get a LOT smaller, as it's much easier to import food to Southern California than export people from there. In the meantime, IID can minimize the harm by auctioning water among farmers.
H/Ts to PB, MK, DL and JW

17 Mar 2014

Too Many Disadvantages to Wood Houses!

Y writes:*

Given how concerned British Columbians (actually, Canadians!) seem to be with environmentalism -- recycling is as common as breathing -- it is amazing that we continue to ravage our forests and export our softwood lumber to Asia. The truth of the matter is that the majority of Asians aren’t too keen on having homes built from wood. It is found to be fairly impractical material in the long run for a building... and even if this wasn't so, China is one of the world’s main centres of lumber production, so this is a huge waste of Canada’s natural resources! Why do we waste such a precious resources in Canada on an area with more lumber supply than demand? Softwood houses are a Western signature, and it is economically careless to foist this on Asians. Where basic construction is concerned, this material amplifies any noise that takes place in the home (necessitating further soundproofing), and there is always the underlying terror of fire could disintegrate everything in minutes. This doesn’t mean concrete bunkers are the Asian alternative, but the cons outweigh the pros when it comes to houses made of lumber.

Bottom Line: Deforestation and exporting softwood to Asia is a destructive, environmentally-unsound method of sustaining Canada’s economy and a slow destruction to our well endowed natural resources.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

Will China's environment become better in the future?

Z writes:*

China is now the world second largest economy, with such high pace of development and industrialization, it comes with great cost, various environment pollution. A measurement of air pollution called PM 2.5 has been mentioned in China social media lately. These particulates matter have serious damage on human beings. Daily exposure to PM 2.5 above 25 is not recommend yet Beijing smog has reached 2540 times more than the safety standard. The air pollution in China has bad influence on both economy scale and environment scale, most foreign large enterprise and investment draw back from Beijing, the negative externality is huge and hard to recover if situation persist.

But things are getting better, in my point of view, there are three main reasons for the reduction of air pollution, first one is the transformation of economy, the transformation from industrialize sector to service and green factory sector will help reduce the air pollution. Next one is the awareness of self-well beings, as people get more wealthier, they tend to care more about their health, they do not want the economy boost at the cost of their own health. Last one is the technology development, more and more environmental friendly product has been invented, like maglev trains or electricity cars. Moreover, clean energy source is alternative way to reduce air pollution as well, for example, solar energy.

Bottom Line: China has developed very fast in the past 50 years at the cost of various pollution, but they already aware the problem and they are on the right path to solve it. With the help of technology, China’s environment will be better as well as the whole world environment in the future.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

Solar power revolution?

Yung Chu Chau writes:*

Solar power converts sunlight to the use of electricity. It’s known as one of the clean energy on the earth. However, technology, price and environment reasons make it hard to be the most efficient energy to use for now.

Current technology hasn't yet develop efficient solar panel to receive solar power from sunlight. It’s really inefficient in midnight, underground and cloudy weather. The availability of sunlight is unstable during the day. Therefore, usually require a second energy system to back-up the shortage period. Price of solar power is relatively high compare to current major energy use (ex. petroleum). Although sun is free itself technology of converting and receiving sunlight is still high. As I said, technology is inefficient. It requires huge solar panel to convert enough sunlight for use. The opportunity cost for the surface that places only panel is high. It can be used to something else. The space wasted and materials needed to produce panels can be harmful for environment.

Solar power can still be competitive energy choice for the future. As the current energy price rises due to increase demand. Price of solar technology will no longer be a problem. As I talked above, most issues come from the lack of technology develop. Company should focus on increasing investment on research and development, to make benefit greater than cost.

Bottom Line: Solar power has not yet ready to be promoted to the world.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

Monday funnies

This, via DV, is painful to watch (let alone experience)

Anything but water

  1. Pleasant places to live may help find places (in the US) to AVOID when climate change turns up the variation

  2. The economics of the sex (and drugs and guns) trade

  3. WTF? "Alberta Partners with Major Oilsands Companies to Develop Kindergarten to Grade Three Curriculum" (it gets worse)

  4. Painful winter = higher energy bills. Yes, that's another "problem" with climate change

  5. Enron of the Year: Chesapeake Energy screws landowners on fracking royalties by transferring its network to a shell company and billing itself to reduce profits and royalties

  6. Climate change will reduce fish size (higher temperatures) and drive them crazy (Ph imbalance)
H/T to CD