The Maine State Legislature recently proposed a bill regarding fossil fuels and environmental policy. The bill would prohibit gas companies from charging consumers in order to finance expansion of gas service mains and gas service lines, effectively serving as a ban on natural gas expansion. The bill would not affect existing service lines.
Proponents of this legislation, led by William Harwood, cite a 2019 law requiring the state to reduce greenhouse gas emissions by 45% from 1990 levels by 2030, and 80% by 2050. This will be impossible, they argue, if natural gas continues to expand its presence in the state. Harwood further argues that electric heat pump usage will increase, reducing dependence on natural gas and limiting the damage that would come from halting its expansion.
On the other side are natural gas companies such as Summit Utilities who argue that Maine does not have the tools necessary to replace natural gas and that any move to preemptively do so comes at a cost to consumers. There have also been arguments presented about how the language of the legislation could inhibit energy innovation. Jenni Tilton-Flood, who is working with Summit Utilities to yield renewable energy from manure emissions, stated that “Projects like these can’t happen” if the legislation is enacted because prices will not be able to increase to finance such innovative projects.
These arguments are not mutually exclusive. Two things can be true at once: halting fossil fuel expansion is likely necessary to hit environmental targets but this will come at an economic cost for ratepayers (at least in the short term) at a time when utility rates are on the rise in Maine. There is a clear opportunity cost present in this choice. The choice comes down to value priorities and differing interpretations on the level of economic harm stemming from the proposed legislation.
However, these choices and considerations were delayed for a year, and the Maine State Legislature is now considering legislation that would fund a series of studies aiming to identify the role of fossil fuels in the state’s energy future. Proponents of both this proposal and the initial legislation aim to highlight the fact that expanding fossil fuels is incompatible with Maine’s stated energy goals. Ultimately, this decision to delay consideration of legislation halting fossil fuel expansion shows the controversy and strong disagreements stemming from differing value priorities and opportunity costs present with action and inaction.
If you are interested in this topic, please see the references below for more information.
Works Cited
Singer, S. (2024, January 23). Bill to scale back natural gas in Maine draws strong opposition at public hearing. Press Herald. https://www.pressherald.com/2024/01/23/bill-to-scale-back-natural-gas-in-maine-draws-strong-opposition-at-public-hearing/
The sharp rise in extreme weather events such as floods and heat waves have increased the need for governing bodies to adapt. The general consensus indicates that municipal governments are best positioned to do this given their unique and proximate knowledge of local infrastructure needs. Accordingly, this study comprises a literature review of local municipalities in all seven continents to find common trends and challenges with climate change adaptation measures. The study placed an emphasis on larger cities due to their strong fiscal capacities as well as their increased likelihood of attaining international funding. Specifically, the paper focuses less on policy measures and more on the capacity of municipalities to implement adaptation measures.
The paper found several general trends. For one, adaptation policy, to varying degrees, has been hampered by both political and financial limitations. This is especially pronounced in smaller municipalities, where lack of capital and human wherewithal significantly limits the potential for adaptation measures. Overall, financial difficulties can largely be attributed to a small tax base and a lack of economic diversification.
In addition, it was found that efforts were hampered by uncertainty around which levers of government were actually responsible for crafting and implementing adaptation measures. Generally, localized government would presumably be responsible, but centralized government across numerous states have hindered local efforts or attempted to fill the void themselves. Ultimately, the literature suggests there are significant administrative and political impediments in the way of crafting and implementing climate change adaptation measures.
As demand for alternative energy sources increases, the construction of wind turbines has steadily increased over the years. However, one of the biggest concerns surrounding wind turbines is concern over its potential impact on property values. To address this concern, this article engages in a comprehensive study on the topic. Previous studies around adverse property values have come back with starkly different conclusions, so there is no general academic consensus on this topic. This study differentiates itself by focusing specifically on wind farms/wind turbines.
Overall, the results found that for properties within 1.89 miles of a wind turbine, property values changed by -0.68%, while properties farther than 2.8 miles had virtually no effect. For policy makers, this study helps alleviate concerns about the construction of wind farms as well as indicating what level of compensation may be necessary for homeowners. Ultimately, this topic needs to be studied more, as the author notes, but this article nevertheless represents an important milestone on the potential adverse effects of wind turbines on property values.
Renewable energy has become an increasingly desirable alternative to fossil fuels due to its ability to better preserve natural resources, reduce pollution, and create cheaper energy. Subsequently, investment in renewable energy has increased substantially over the last decade, and wind energy now accounts for 8.2% of the American energy market. While there is a general consensus that wind energy is more environmentally friendly, there is less consensus on what form that takes.
This study, conducted in Texas, assesses the impact of wind energy on air pollution. To conduct the analysis, data was collected across three primary categories: electricity generation, meteorological and air quality, and emergency department admission records. The authors hypothesized that because wind generation does involve the releasing of emissions wind energy would be associated with less pollution across the state. Results demonstrated that the generation power from wind energy was associated with less air pollution. However, results varied both spatially and temporally. The results found that areas near coal plants benefited more from wind energy (in terms of less air pollution than areas that were not close to existing coal plants. The effect of wind generation on air pollution rates appears to increase in magnitude (i.e., become more negative) when more wind generation comes during grid-uncongested hours (such as at night, when demand for power is lower) and during off-peak wind periods. The results suggest that wind energy is associated with less air pollution, resulting in greater human health benefits, but that reducing grid congestion could increase the size of that effect.
Lakes are an appealing environmental amenity that provides recreational, aesthetic, and ecosystem benefits. Environmental economists (like us at rbouvier consulting) are often asked to measure the economic benefit of cleaner lake water quality. While there have been many studies demonstrating the relationship between cleaner lake water quality (typically measured by water clarity) and property values, there have been few studies that have attempted to determine whether that relationship is constant across regions of the United States.
This study attempts to answer that question by using data from Zillow’s former Transaction and Assessment Database. Unfortunately for researchers, results suggest that no, there is no one definitive “number” that can be used to assess the relationship between water quality and property values. The elasticity of property values to lake water quality (i.e., the responsiveness of property values to lake water quality) varies significantly across regions, and any attempt to “smooth out” the relationship by looking at larger spatial scales could result in bias. Also of interest (at least, to practitioners) is that the choices made by the investigator in modeling the relationship may also be a source of variability.
The authors therefore recommend caution in “transferring model results across spatial boundaries.” For those reasons, any further attempt to determine the relationship between lake water quality and property values should be conducted at a local scale.
Rachel’s journal selections were summarized by Connor Feeney this quarter from the following publications.
The selected article summaries for this quarter focused on carbon taxation and the natural capital of forests and their impacts. As always, the articles are selected from peer reviewed academic journals.
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Castellanos, K. A., & Heutel, G. (2019, May 6). Unemployment, labor mobility, and climate policy. Journal of the Association of Environmental and Resource Economists Volume 11 Number 1, January 2024 JAERE https://www.journals.uchicago.edu/doi/full/10.1086/725482
Unemployment, Labor Mobility, and Climate Policy assesses the impact of a carbon tax on the economy. More specifically, this study looks at the relationship between a hypothetical carbon tax and employment in the United States through the usage of a mathematical economic model. For the purposes of the study, a $35 carbon tax was examined. The authors ran two scenarios, one with complete labor mobility and one without any mobility.
The results indicated that a $35 dollar carbon tax would have a minimal impact on aggregate employment (-0.18% with no labor mobility and -0.17% with labor mobility) in either scenario. However, once broken down by sector, sectors involved in the extraction of fossil fuels faced significant losses in employment. Meanwhile, sectors involved in the production of green energy benefited from the carbon tax – resulting in an increase in employment. To dampen these results, the authors recommend pairing a carbon tax with a distributional mechanism targeted towards communities that would be most adversely affected.
With carbon taxes becoming increasingly looked to as a potential solution to climate change, understanding its impact on employment will be critical for policymakers and the public going forward.
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Grover, I., O’Reilly-Wapstra, J., Suitor, S., & Hatton MacDonald, D. (2023, June 22). Not seeing the Accounts for the Forest: A systematic literature review of ecosystem accounting for forest resource management purposes. Ecological Economics. https://www.sciencedirect.com/science/article/pii/S0921800923001854
This article is a review of case studies that use the System of Economic Ecosystem Accounting (SEEA). SEEA is only one approach to ecosystem accounting, which is an attempt to integrate physical accounts of natural capital with economic values. SEEA first arose out of concern that standard measures of economic prosperity ignored the role of natural capital and ecosystem services. . The review identified a total of 35 empirical publications, and categorized them into the following global regions: Europe (43%), Asia (20%), America (14%), Africa (9%), Oceania (3%) and Europe/Asia (3%) as well as global scale assessments (8%) at regional (54%), country (23%) and multi-country (23%) levels. The largest percentage of publications covered forest specific ecosystems. Of these, a large portion focused on forest management and policy. The authors identified various gaps and challenges in how SEEA is applied, especially in countries lacking governmental and institutional support – arguably the regions that might benefit the most from a rigorous accounting of natural capital. The authors conclude with a call to make ecosystem accounting more widely available and accessible.
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Zhao, J., Daigneault, A., Weiskittel, A., & Wei, X. (2023). Climate and socioeconomic impacts on Maine’s forests under alternative future pathways. Ecological Economics, 214, N.PAG. https://doi.org/10.1016/j.ecolecon.2023.107979
This article looks into the future of Maine’s forests under several “shared socioeconomic pathways,”* taking factors into account such as climate change and forestry management. The study integrated a harvest choice model with varying socioeconomic and climate change conditions to estimate the future of Maine’s forest sector under a range of possible scenarios.
The results indicated that without increased rates of harvesting, forest ecosystems would grow by 144% on average over the next 80 years. It was found that climate change had a positive effect on forestry growth. In fact, forest growth was the highest under the highest emission scenario (164%). Economically, harvesting was expected to peak in 2060 in most scenarios, before declining at various rates up to 2100. Interestingly, the researchers found that socio-economic drivers had larger effects than climate change on timber harvest and carbon stocks.
*The shared socioeconomic scenarios were developed by an international group of scientists and economists to map out potential futures, given certain assumptions about socio-economic responses to the “representative concentration pathways” (RCPs). The RCPs themselves were developed by an international group of researchers to describe different concentrations of greenhouse gasses in the atmosphere.
The selected article summaries for this quarter focused on local economic development. A range of issues were covered, such as the aftermath of Covid-19, migration, the Great Resignation, commuting distances, and more. All of the articles are in peer reviewed academic journals.
This article is a commentary on the causal impacts of economic development. The author argues that, going forward, researchers need to focus more on distributional changes, the effects of migration, and the impact of Covid-19.
“Pawns with stacks of coins.” Concept of social and economic inequality by focusonmore.com is licensed under CC BY 2.0.
Due to increasing income inequality, it has become a necessity to look at economic outcomes more broadly. Typically, economic studies focus on the median/mean effect of a program, or alternatively focus exclusively on low-income individuals. The author argues that looking at an entire economic distribution is crucial to understanding the true effect of any particular economic policy/trend. One specific issue cited was how studying an entire distribution allows one to see how many workers are moving up and down the economic ladder, which has important policy implications.
The author also wants more focus on how migration affects economic development in local regions. For example, the author cites a case where money was given to help individuals in a local area obtain jobs and gain qualifications, but an indirect consequence of this was outsiders migrating to take advantage of these benefits. Lastly, the author wants to discuss how Covid-19 will affect the economy in the future. One issue that is directly highlighted is remote work and how this could increase the spatial scope of labor markets.
This article discusses how Covid-19 created a fundamental shift in the U.S. labor market. The author goes into how the Great Resignation has been an underlying issue for years caused by technological advancement, globalization, and the decline in unionization, rather than a sudden change in attitude, as it has been portrayed. In addition, there has been a widening gap between “well-paying jobs”, and lesser paying jobs. Meanwhile, moderate skill jobs that straddle this economic divide are increasing in scarcity.
The author concludes that the solution to this problem is a renewed focus on job quality (as opposed to job quantity) in both the workplace and public policy at large. The author cites examples of small scale universal basic income and a $22/hour minimum wage in the fast-food industry as positive and necessary steps to relieve economic struggle in the United States.
Kures, M., & Deller, S. C. (2023). Growth in Commuting Patterns and Their Impacts on Rural Workforce and Economic Development. – Economic Development Quarterly, 37(1), 54–63.
This article discusses recent changes in commuting patterns, as well as the general benefits and costs of commuting on workers. The information presented was gathered from the United States Census Bureau.
The article outlines several benefits and costs to commuting noted in the research. Some studies have indicated that commuting is good for workers because it is an activity devoid of family/work burdens. Furthermore, commuting has also been associated with improving urban-rural integration. Most studies, however, have indicated that commuting is a cost to workers, and commutes longer than 50-60 miles cease to be beneficial.
The number of stretch (long distance) commuters has increased from 11.0% to 13.6% of the workforce. Workers earning $1,250/month or less were more likely to be stretch commuters. However, since 2002, the greatest growth among stretch commuters comes from those making $3,333/month or more.
Overall, the paper concludes by stating that higher rates of commuting require increased economic and social collaboration between communities. Those who spend more time commuting spend less time in their communities, so integrating communities together would be beneficial from both an economic and social perspective. While research is limited, some studies have indicated that long distance commuting has naturally contributed to cross-community integration, resulting in positive externalities such as lower poverty rates. Local policymakers should work to promote this further.
This article outlines five areas surrounding local economic development where more research is needed: better definitions of local labor markets, policy tools to help economically distressed neighborhoods, types of jobs that have growth prospects and also provide long-run job opportunities for workers who lack a bachelor‘s degree, estimates of how local worker skill-upgrading programs affect labor market outcomes, and more rigorous evaluation of both customized business services and comprehensive regional economic development strategies.
On a basic level, local labor markets are simply an area of space with enough internal employment activity that an economic shock would affect the entire region. The author emphasizes the importance of selecting a proportional labor market to achieve accurate and useful data – larger labor markets risk ignoring local communities, but narrow research affecting only a few communities risks ignoring broader economic outcomes. The author concludes by mentioning that the rise of remote work further complicates the issue of local labor markets.
In regard to “distressed neighborhoods”, defined as places with high unemployment and low income, the author states that more research is needed on how to create increased employment and upward mobility in these communities. The author also notes that “distressed neighborhoods” are disproportionately populated by Black Americans.
Looking to the future, the author argues that more research is needed on what job types will be well paying and in demand in the future. Many high paying managerial and professional jobs have too many educational credentials to be accessible. Instead, the author promotes “mid wage” jobs, which require little education but provide living wages. The author concludes by advocating for more research on how to promote and create these types of jobs.
With reference to skill upgrading programs, the author explains the current lack of research on the topic. While some local studies have pointed out possible benefits, there is little research about the side effects of these policies. Do skill upgrading programs promote migration, thus causing an increase in housing prices? These are questions that remain largely untouched.
Lastly, the author supports more research in economic development services for individual businesses and local economies. Services to businesses have the potential to affect other facets of a local economy in unpredictable ways. Similarly, larger federal programs, such as the recent CHIPS Act, need to be researched to determine whether local economic improvements were worth the cost of the program. Overall, the article above outlines five aspects of the economy that need to be further examined.
This article discusses the impact of carbon pricing (otherwise known as a carbon tax) through the lens of consumption, income, health, and revenue recycling.
In regards to consumption, the article says that research is still emerging, but studies have indicated around 70% of energy price-driven input changes are passed down to the consumer. However, this varies by fuel and there is not a uniform consensus. In theory, carbon pricing would incentivize firms to improve energy efficiency or transition to renewable energy. This behavioral response could lower the burden of a carbon tax on both businesses and consumers. In fact, the article states that, “A carbon price of US$30 per ton of CO2 would reduce carbon emissions by about 14 percent, mostly because of consumers substituting away from emissions-intensive goods rather than lowering consumption in response to across-the-board price increases” (Shang). Lastly, the paper warns policymakers about the rebound effect, where increased energy efficiency leads to cheaper energy in spite of the carbon tax resulting in more carbon emissions.
A carbon tax would negatively impact workers in “brown” jobs, such as the coal industry. Even a gradual carbon tax would cripple the industry, and on a global level a carbon tax would negatively impact countries that rely heavily on oil for economic growth and government revenue. On the other hand, a carbon tax would improve the viability of renewable energy, causing an increase in investment and employment in this sector.
From a health perspective, 4.2 million people die each year of carbon pollution. Health benefits from carbon pricing vary wildly by study and by population type. Ultimately, The evidence on how carbon pricing affects health outcomes is still unfolding.
Revenue recycling refers to how the revenue raised from a carbon tax is spent. These plans vary heavily, ranging from cash transfers to infrastructure projects. The article does not promote any specific proposal, only outlining a goal of reducing poverty and income inequality.
The article then presents details of different revenue recycling plans and how different countries across the world have implemented a carbon tax. The article concludes by warning that most countries have been tepid in implementing carbon taxes, an unacceptable outcome given the time sensitive nature of climate change.
In New England, even though most sources of drinking water are lead free, lead was a common material used for constructing pipes until 1986. Even today, while copper has eclipsed lead as the most common material used for pipes, lead solder can still be used to join copper pipes. Corrosive water can then cause the lead to leach into the drinking water. Lead contamination from drinking water is one of the most common forms of lead poisoning in both New England and across the country.
Every state in New England still has lead pipes carrying water to houses (as well as lead contamination in schools). In Rhode Island, for example, there are 30,000 known lead service lines that are a contamination risk. Fortunately, New England is taking steps to remedy this problem. There are two “fronts” on which the battle against lead contamination in drinking water is being fought: in public infrastructure, such as schools, and in private residences and businesses, which is more challenging. In terms of schools, Maine, Vermont, and New Hampshire require consistent testing to see if lead is contaminating the water supply. In all three states, tests have come back confirming that a portion of the public school water supply is contaminated with lead. Meanwhile, Connecticut, Massachusetts, and Rhode Island do not require schools to test for lead, although Massachusetts has a robust voluntary testing program. Connecticut, for its part, does require young children to get tested for lead, but does not extend this requirement to schools. Assisted by the Bipartisan Infrastructure Law, states are investing in replacing lead pipes with safe, modern ones. These projects will not finish overnight, but still represent an important step in the right direction. On the federal level, the Lead and Copper regulates the amount of lead and copper in public drinking water, which currently stands at 15 ppb (parts per billion) for lead. However, science (and indeed the EPA) has emphasized that no amount of consumed lead is healthy or safe.
The Environmental Protection Agency recently estimated there are 9.2 million lead pipes carrying water throughout the country. Lead, which is commonly found in paint, ceramics, plumbing materials, gasoline, batteries, and pipes, among other products, has numerous negative health effects if consumed. Adults who consume lead can face high blood pressure, as well as kidney, brain, and reproductive complications. Adults are most commonly exposed to lead through drinking water as well as consumer products. Meanwhile, children who consume lead can face brain damage, slowed growth and development, and even hearing and speech problems. Children are most likely to be exposed to lead through paint dust. To address this long standing problem, the recently passed Bipartisan Infrastructure Law allocates $15 billion towards replacing lead pipes.
The social and physical costs of lead contamination, such as how lead disproportionately harms poor communities, are relatively easy to see, but it is important to consider the economic consequences as well. From an economic standpoint, health externalities such as kidney or brain complications harm the economy in the form of further burdening the logistics and finances of the healthcare system. Meanwhile, stunting childhood development harms long-term earnings, and some studies believe that lead exposure increases crime. In 2019, lead exposure cost Maine $226.8 million dollars, Connecticut $984.4 million, Vermont $115.9 million, Massachusetts $2.0 billion, New Hampshire $272.9 million, and Rhode Island $257.1 million. This expense includes costs of reduced lifetime productivity, greater health care, education, social assistance expenditures, and premature mortality. State and federal budgets, as well as the private sector all bear a portion of this cost. Ultimately, the exposure of both children and adults to lead contamination is as much an economic issue as a moral one.
Although the health problems associated with lead in drinking water have been known since at least the late 1800s, the problem still remains. Lead contamination is a prime example of how environmental and economic issues are very intertwined. Both the private and public sectors should continue working to reduce (and eventually eliminate) lead contamination in both children and adults. Doing so would be wise from both an economic and moral perspective. Overall, while lead poisoning might seem like a moral problem, its economic consequences prove that lead contamination is a multifaceted policy issue worthy of attention.
By Connor Feeney
Works Cited:
El-Dib, I. (2021, November 12). Lead exposure poses threat, especially to children, in Rhode Island. The Brown Daily Herald. Retrieved April 12, 2023, from https://www.browndailyherald.com/article/2021/11/lead-exposure-poses-threat-especially-to-children-in-rhode-island
Frazin, R. (2023, April 4). EPA estimates 9.2 million lead water pipes in US, doles out funding to replace some of them. The Hill. Retrieved April 12, 2023, from https://thehill.com/policy/energy-environment/3933154-epa-estimates-9-2-million-lead-water-pipes-in-us-doles-out-funding-to-replace-some-of-them/
Costa, C. (2022, May 31). All Maine schools are required to test for lead. here’s what they’re finding. newscentermaine.com. Retrieved April 12, 2023, from https://www.newscentermaine.com/article/news/investigations/testing-reveals-alarming-levels-of-lead-in-school-drinking-water-maine-cdc-drinking-water/97-0d23e363-5e9e-4d7c-b12c-259113d20e9a
Emanuel, G. (2023, February 24). Mass. gets a ‘C-‘ in effort to address lead in school drinking water. WBUR News. Retrieved April 12, 2023, from https://www.wbur.org/news/2023/02/24/lead-water-school-daycare-facility
Tan, T. (2023, January 8). Lead water pipes in 300 Bennington homes have been replaced in pioneering project. VTDigger. Retrieved April 12, 2023, from https://vtdigger.org/2023/01/08/lead-water-pipes-in-300-bennington-homes-have-been-replaced-in-pioneering-project/
Fleisher, C. (2018, July 13). Get the lead out. American Economic Association. Retrieved April 12, 2023, from https://www.aeaweb.org/research/lead-poisoning-health-intervention-long-run-impact-charlotte-north-carolina
Lloreda, C. L. (2020, January 14). Lead poisoning hits low-income children harder than their affluent neighbors. Massive Science. Retrieved April 12, 2023, from https://massivesci.com/articles/lead-flint-water-crisis-poverty-income-health-pollution-poor-rich/#:~:text=They%20found%20that%20children%20from,highlighted%20in%20red%20and%20yellow.
Altarum. (n.d.). Value of lead prevention. http://valueofleadprevention.org/index.php?error=2
Perls, H. (2022, August 10). EPA’s lead and copper rule: Examining challenges and Prospects – Environmental & Energy Law Program. Harvard Law School. https://eelp.law.harvard.edu/2021/01/lead-and-copper-rule/
The recent discovery of a “world-class” lithium deposit in Newry, Maine, has sparked off a contentious debate over the environmental and economic future of the State. In response to this revelation, a recent bill was proposed to change Maine regulations to allow for unlimited mining for metals of any size, with up to 100 acres per individual location. However, the bill would retain Maine’s regulations requiring developers to prove that there will be no acid mine drainage or harm to water before any mining begins. Currently, Maine only permits open pit metal mining in 3 acre sections.
Geologists believe the lithium deposit has a value of over $1 billion dollars, presenting Maine with an economic opportunity. The lithium crystals appear to be of very high quality, far surpassing the quality necessary for batteries. Furthermore, the change in regulations will affect the harvesting of other metals considered crucial for the transition to green energy, including a manganese deposit in Aroostook county. This has led to several environmental groups, including the Maine Department of Environmental Protection, coming out in support of this regulatory change, while others want the acre limit reduced or outright oppose the relaxation of mining regulations.
There are also several other bills under consideration by the Environment and Natural Resources Committee. These alternatives present a range of options, such as a five-year moratorium on lithium mining, as well as a proposal that would exempt the type of minerals found in Newry from the law altogether.
At the center of this mining debate is whether or not the definition of “metallic mineral” should be changed. Advocates want to make exemptions for lithium and other metals used in renewable energy. This is because Maine’s quarrying rules are much less stringent, making for a more efficient but less stringent process.
Under current law, “metallic mineral” is a policy definition which depends on what the harvested metals are used for. This makes it difficult to classify minerals on how they might be used in the future. This is especially true in regards to Newry, where the metals would be sold to out of state distributors.
This topic is a clear example of how environmental and economic issues intersect. The push for sustainable green energy is creating a demand for lithium and other metals. This, in turn, necessitates more mining, which has a negative effect on the environment. Meanwhile, for the State of Maine, taking advantage of these deposits presents economic opportunities at the potential cost of the local environment. In a strange political twist, prominent environmental groups are calling for an expansion to mining and decreased regulations surrounding these metals, making the calculation that the long term economic and environmental benefits outweigh the risks. In conclusion, the national transition towards renewable energy is shaping the economic, cultural, and environmental debate in Maine. It will ultimately be up for the state to decide, but the economic and environmental tradeoffs are fascinating and caught our attention here at rbouvier consulting. If you are interested in this issue, the referenced sources below provide more detail, or contact us directly.
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Works Cited: Cough, K. (2023, April 24). State lawmakers consider removing size limits on open-pit metal mines. Press Herald. Retrieved April 25, 2023, from https://www.pressherald.com/2023/04/23/state-lawmakers-consider-removing-size-limits-on-open-pit-metal-mines/
This article analyzes the effects of climate change on food production and farm income. Climate change is expected to exacerbate economic, environmental, and biotic (pests/diseases) uncertainties currently present in agriculture. More specifically, the primary focus of the article is the effect of climate variability, subsidies, and farming practices on the stability of food production and farm income. To accomplish this, the study used 929 farms as case studies across England and Wales between 2005-2017. The study found that variability in temperature and rainfall reduces the stability of farm income and food production. Although variability in climate can be largely outside of the farmers’ control, the authors’ findings indicate that proper farm management may be able to mitigate this effect.
The study found that farms with greater agricultural diversity had more stable income. Likewise, bigger farms were found to have greater financial stability due to both economies of scale and greater soil diversity. Climate conditions were found to affect the stability of both farm income and food production. Subsidies, meanwhile, were found to have a minimal impact on the stability of farm income. The study also found that more concentrated farms (those that spend more on fertilizer, pesticide, and concentrated animal feed) had less income stability but more stable levels of food production. Moreover, the benefits of stable food production were found to benefit larger and medium size farms the most. Lastly, farms with high input expenditures were found to be less efficient, implying that although food production increased with more concentration, this did not correlate to additional income stability for farmers. The article recommends several policies to increase income stability without jeopardizing food production, such as reducing input use, diversifying agricultural output through the use of targeted incentives, and increased incentives for precision farming.
Harkness, C., Areal, F. J., Semenov, M. A., Senapati, N., Shield, I. F., & Bishop, J. (2022, November 24). Towards stability of food production and farm income in a variable climate. Ecological Economics. Retrieved March 10, 2023, from https://www.sciencedirect.com/science/article/pii/S0921800922003378
This article explores the economic value of the sea coast through airbnb comparisons (the price of coastal properties vs. inland properties) across 67 municipalities in the Balearic Islands, Spain. The authors choose the Balearic Islands to study due to its high property value and high erosion risk. The study then discusses how climate change has affected coastal assets, and how action will need to be taken to reverse this trend. Although the study takes place across the Atlantic, the results are applicable in the United States due to the universal fact that humans (especially tourists) value coastal properties, and climate change is of course not limited to coastal Spain.
The study finds that Airbnb guests are willing to pay a premium for beach length, the presence of vegetation, the type of coastal frontage and whether the beach is in an urban environment. Meanwhile, the type of sand on a beach has virtually no effect on Airbnb prices. The study also mentions the importance of beach width, which by itself does not add much to the beach aesthetic, but provides important resiliency to erosion. The article concludes by mentioning the obvious economic benefits these coastal premiums provide for local communities, and their risk of eroding over time. Measures will need to be taken to preserve not just the coastal value of the Balearic Islands, but coastal areas across the world.
Boto-Garcia, D., & Leoni, V. (2022, October 1). The Economic Value of Coastal Amenities: Evidence from Beach Capitalization Effects in Peer-to-peer Markets – Environmental and Resource Economics. SpringerLink. Retrieved March 8, 2023, from https://link.springer.com/article/10.1007/s10640-022-00735-5
The Value of Dam Removals—
This article examines the pros and cons of dam removal in Maine. On one hand, removing a dam may enhance wildlife by allowing fish passage. On the other hand, dams can provide recreational and economic value to residents, and are even part of local historical identities. Current academic research is largely split on the topic, indicating that there is no general consensus on the issue of dam removal. Furthermore, the process for removing a dam is relatively complex. To study the effect of dam removal, the authors use 75 case studies – the largest sample size to date, and conclude that dam removal has a minimal impact on home value except for properties that are extremely close to the dam in question (100 meters or less).
Ultimately, the authors believe that dam removal would be beneficial for the environment with minimal economic cost. A limitation of this study is that it focused primarily on rural areas, so the results may not be applicable to urban and suburban environments.
This article outlines the need to adopt a behavioral approach built around marine conservation, specifically a tourism levy, whereby tourists would pay a premium when visiting (and using) the oceans of local communities. Unlike past proposals, whereby the revenue collected would be directly invested into local marine conservation efforts, the authors argue that since tourism is not heavily present in the global south (which would benefit the most from such a tax), the revenue from such a tourism levy should go towards a global marine conservation effort. The article surveys tourists to see if such an idea could work in practice. The results found that support for a “tourism levy” depended heavily on income and already present beliefs on the environment. Moreover, the study was limited to English speakers, as well as skewed towards wealthier tourists. As such, it is still hard to assess how practical a tourism levy would be. However, it is undeniable that action needs to be taken to address the degradation of marine ecosystems and wildlife. Overall, this article discusses a potential market solution to the proven “commons” problem of marine degradation.
Booth, H., Mourato, S., & Milner-Gulland, E. J. (2022, August 6). Investigating acceptance of marine tourism levies, to cover the opportunity costs of conservation for Coastal Communities. Ecological Economics. Retrieved March 9, 2023, from https://www.sciencedirect.com/science/article/pii/S0921800922002403
Water Quality and Property Values–
This article discusses the issue of water quality in the Chesapeake Bay. The Chesapeake Bay is the center of a multimillion dollar seafood industry – creating tens of thousands of jobs – and supports one of the largest property markets in the United States. However, despite recent improvements, declining water quality in the Chesapeake bay due to urban and agricultural runoff is putting these economic assets at risk. The article focuses on studying what, if any, correlation exists between water quality and home liquidity. The study collects data from properties within 2 km of the Chesapeake Bay and in either Anne Arundel, Baltimore, or Harford (all counties in Maryland) as well as the city of Baltimore. The authors explain the importance of this study by saying that a failure to account for the effect of water quality of home liquidity would result in policymakers underestimating the economic benefits of clean water – leading to a suboptimal outcome.
The study found that clean water does correlate with higher home liquidity. The correlation increased the closer houses were to the Chesapeake Bay, but was present at all distances. This was determined primarily by sellers getting more for their homes with less time on the market compared to areas with lower water quality. Shorter listing periods are beneficial to sellers in the form of reduced stress and less holding expenses. Home prices were also higher for houses closer to the Chesapeake Bay. Overall, the study suggests that the benefits from water quality improvement are 13.3% higher when effects on liquidity are considered alongside property value increases. Overall, this study provides an important and underreported perspective on the economic benefits of improving water quality.
