Category: economics

Environment or Economy: A Story of Opportunity Cost

Environment or Economy: A Story of Opportunity Cost

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.

Yankee Gas, Wilton Gas Expansion Project
Yankee Gas, Wilton Gas Expansion Project” by yankeegasmedia is licensed under CC BY-ND 2.0.

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/ 

Are there enough minerals in the world for a total transition to an alternative energy system?

Are there enough minerals in the world for a total transition to an alternative energy system?

There’s an ongoing debate concerning the availability of minerals needed for a full transition to alternative energy sources. This conversation involves factors such as the Earth’s resource capacity, energy return on investment (EROI) for various energy technologies, technological advancements, and the practicality of shifting away from fossil fuels.

Many discussions have raised concerns about the adequacy of critical minerals required for renewable energy technologies like solar panels, wind turbines, and electric vehicle (EV) batteries. These technologies rely on materials such as rare earth elements, lithium, and cobalt, which might not be as abundant as more common resources. However, advancements in technology and improved recycling methods are being considered to address these concerns.

Recently, I have been reading about energy return on investment and energy flows in the current system (Brockway, 2019 and Barnard, 2023). Energy return on energy invested (EROI) is a calculation that experts use to try to answer questions about transitioning the energy system. EROI tells us the proportion of return on investment for producing energy and this can be then compared to the percentage that is used in the system and the investment needed to use it. Unfortunately, some methodologies for calculating EROI focus on the production side and compare energy source to source. These experts claim that since the EROI on oil is so much higher than for renewables, transition would be impossible from a sheer energy perspective. Other experts have begun to look at energy flows through the system, factoring wasted energy into the equation. These experts are saying that renewable energy produces  such little waste that the EROI is comparable with oil after factoring in efficiency (Brockway, 2019). Still others are saying that as the cost of extracting and processing the finite resource rises the transition to renewables is inevitable (Barnard 2023). 

A diagram of a energy consumption

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Energy is often viewed as the economy is, as a supply and demand equation. After all, the economy is largely a story of energy inputs and outputs. On the supply side, people pay for energy produced and delivered with utilities accounts. This view is loaded with assumptions and hides energy waste out of view entirely. As a result, consumers pay for the lost 65% of energy generated in the delivery fees along with grid maintenance costs!With the supply side getting most of the attention we can easily stop imagining a brighter future with a thriving economy for our descendants.

However, the demand side of the equation is simply the wattage hours, rather than the cost of wattage hour. The wattage hours metered, the gallons pumped, or cordage dropped represents the demand side of the equation. A recent article by Micheal Barnard, for example, says that, “The primary energy fallacy is the assumption that all the energy, in all of the oil, gas and coal that we burn today must be replaced. We don’t need to replace it, we need to replace the unwasted energy services.” (Barnard, 2023). And that is less by a factor of two-thirds! Viewing it from this perspective suddenly seems much more doable.

The technologies are developing rapidly, for storage especially, but the intermittency of renewable energy is still a challenge to be met. The scale of that challenge, however, is less ominous than I thought. If we are building that new system for energy actually used and not comparing sources solely on the basis of production ROI, the future looks brighter. While concerns about mineral availability and EROI are well founded, ongoing developments suggest that a complete transition to an alternative energy system is plausible. This transition will likely require a combination of technological advancements, efficient energy utilization, and a shift in focus from energy replacement to maximizing energy services while reducing waste.

By Rachel Lyn Rumson


References

Barnard, M. (2023, February 13). Why Aren’t Energy Flows Diagrams Used More To Inform Decarbonization? CleanTechnica. https://cleantechnica.com/2023/02/13/why-arent-energy-flows-diagrams-used-more-to-inform-decarbonization/

SKAGEN Fondene (Director). (2023, January 16). Mark Mills: The energy transition delusion: inescapable mineral realities. https://www.youtube.com/watch?v=sgOEGKDVvsg

Brockway, P. E., Owen, A., Brand-Correa, L. I., & Hardt, L. (2019). Estimation of global final-stage energy-return-on-investment for fossil fuels with comparison to renewable energy sources. Nature Energy, 4(7), Article 7. https://doi.org/10.1038/s41560-019-0425-z

Rachel’s Journal Round Up Q3 2023

Rachel’s Journal Round Up Q3 2023

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. 

Rohlin, S. (2023). Challenges to Identifying Economic Development Impacts – Sage Journals. https://journals.sagepub.com/doi/pdf/10.1177/08912424221140867?download=true 

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.
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. 

Liu, C. Y., Doussard, M., & Lowe, N. (2023). Fixing work, and Moving Beyond It. – Sage Journals. https://journals.sagepub.com/doi/full/10.1177/08912424221141081 

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.

Bartik, T. (2022). Seize the time: Needed research on local economic development in an Era of Increased Attention to Problems of Pace – Sage Journals. https://journals.sagepub.com/doi/abs/10.1177/08912424221140027 

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. 

Shang, B. (2021, June 25). The Poverty and Distributional Impacts of Carbon Pricing: Channels and policy implications. – IMF. https://www.imf.org/en/Publications/WP/Issues/2021/06/25/The-Poverty-and-Distributional-Impacts-of-Carbon-Pricing-Channels-and-Policy-Implications-50222 

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.

Lithium Mining: The Economics of the Future

Lithium Mining: The Economics of the Future

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. 

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/

Rachel’s Journal Roundup Q1 2023

Rachel’s Journal Roundup Q1 2023

Climate Change and the Farm Business —

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


Coastal amenities and Sea level Rise

Igidae Coastal Trail.” by dombrassey is licensed under CC BY-SA 2.0.

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.

Guilfoos, T., & Walsh, J. (2022, October 7). A Hedonic Study of New England Dam Removals. Ecological Economics. Retrieved March 8, 2023, from https://www.sciencedirect.com/science/article/pii/S0921800922002853 


Marine Tourism Levies?–  

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.

Irwan, N., & Wolf, D. (2022, May 25). Time is money: Water quality’s impact on home liquidity and property values. Ecological Economics. Retrieved March 10, 2023, from https://www.sciencedirect.com/science/article/pii/S0921800922001446


PFAS Chemicals: Why Prevention is the Best Medicine

PFAS Chemicals: Why Prevention is the Best Medicine

What are PFAS chemicals? Although the name is obscure, their effect is widespread and overreaching. PFAS are a group of approximately 9000 hazardous chemicals used in both industrial processes and consumer goods. PFAS chemicals were created in the 1930s and subsequently used in America’s commercial and industrial sectors, even contributing to the success of the Manhattan Project. After the efficiency of the chemicals became widely known, their usage increased dramatically. But because of the ubiquitousness and persistence of the chemicals, they ended up in our wastestream, with widespread consequences. 

For both environmental and economic reasons, waste treatment facilities have historically sold sludge to farmers to be used as fertilizer. This saved money for farmers and municipal waste facility operators as it seemed to be a practical disposal method. In short, this process was a prime example of the circular economy at work, and many environmentalists (including some of us at rbouvier consulting) lauded the practice. Unfortunately, PFAS chemicals (also known as “forever chemicals”) have since been demonstrated to be hazardous for the environment, capable of rapidly spreading, and extremely durable. PFAS chemicals spread through groundwater aquifers, air, building improvements, surface soils, deep soils, and water. In humans, exposure to PFAS chemicals has been linked to thyroid disease, testicular and kidney cancer, pregnancy-induced hypertension, ulcerative colitis, and increased cholesterol. Lastly, PFAS chemicals harm the environment and have a negative effect on wildlife. 

In other words, the well-intentioned use of the sludge as fertilizer ended up harming the very farmers it was intended to help. In Maine, that has led to financial disaster for many dairy farms and disruption to the local food system. Moreover, rather than being able to be used as fertilizer, the sludge has had to be diverted to landfills, where the liquid sludge may cause an imbalance and increase the risk of collapse. 

How did this happen? And what can we do to ensure this doesn’t happen again?

Vehicle for application of liquid sludge” by Sustainable sanitation is licensed under CC BY 2.0.

Prior to 2016, many chemicals were regulated under the Toxic Substances Control Act (TSCA), which gave the EPA authority to require reporting and restrictions for various chemicals. Unfortunately, it was widely acknowledged to be ineffective. In 2016, Congress overwhelmingly passed a bill updating TSCA that would test unregulated chemicals currently on the market to ensure they meet environmental standards. Among these chemicals is, of course, PFAS, which have already been shown to be toxic for the environment. 

While a good start, it will still take decades for the EPA to test and approve of chemicals already present in the marketplace, let alone new ones, which are being introduced all the time. In the meantime, cleaning up PFAS chemicals will be expensive. Inaction, though, would also be costly, although those costs (primarily health and productivity) are not always as overt. The Investment and Jobs Act, which passed with bipartisan support, allocated roughly $2 billion dollars to help remedy the effects of PFAS chemicals on drinking water. 

Complicating things further, state level approaches to PFAS chemicals vary widely, as reported in a recent article in the Portland Press Herald. California, a state known for its commitment to environmentalism, has taken no action to stop the spread of PFAS contaminated sludge onto farmland. This is a position polar opposite to Maine, which sparks several questions. Does California know something Maine doesn’t? Are there additional environmental and economic factors at play? Meanwhile, the EPA has yet to announce a formal position on how to address PFAS chemicals, a result which many states are waiting on before taking action. Ultimately, the strong contrast in responses between California and Maine – two traditionally environmentalist states – shows that the issue of PFAS chemicals is far from settled.

The concern about PFAS chemicals is a prime example of actions that seem to save money in the short run, but are actually costly in the long run. Economists call these actions “false economies.” This is our mission at rbouvier consulting, to address environmental issues from an economic perspective. If you are interested in this issue, the referenced sources below provide more detail, or contact us directly. 

Post by Connor Feeney

Works Cited

Tachovsky, M., & Bell, R. (2021, May 11). Real estate damage economics: The impact of 

PFAS “forever chemicals” on Real Estate Valuation. Taylor & Francis. Retrieved March 21, 2023, from https://www.tandfonline.com/doi/full/10.1080/10406026.2021.1923926 

Cordner, A., Goldenman, G., Birnbaum, L. S., Brown, P., Miller, M. F., Mueller, R., Patton, 

S., Salvatore, D. H., & Trasande, L. (n.d.). The true cost of PFAS and the benefits of acting now. Environmental Science & Technology. Retrieved March 8, 2023, from https://pubs.acs.org/doi/10.1021/acs.est.1c03565 

Environmental Protection Agency. (n.d.). EPA. Retrieved March 21, 2023, from 

https://www.epa.gov/pfas/key-epa-actions-address-pfas

Overton, P. (2023, March 19). From Maine to California, the solution to sludge disposal is not settled. Press Herald. Retrieved March 21, 2023, from https://www.pressherald.com/2023/03/19/from-maine-to-california-states-struggle-with-sludge-solutions/

What is a Regenerative Economy?

What is a Regenerative Economy?

Does it mean biological means of production? While regenerative farmers are talking about high yields with no-till methods and soil biodiversity, some economists are talking about “a new vision for prosperity” that leaves behind the “rational man” of neo-classical economics for a new model of participation and dignity, one that meets the social needs of everyone while operating within the ecological limits of the planet. 

One of the most prominent voices for a regenerative economy is Kate Raworth, author of Doughnut Economics: Seven Ways to Think like a 21st  Century Economist. Raworth recently spoke at Schumacher Center for New Economics on the topic of Planetary Economics: New Tools for Local Transformation. In her talk last November to a record-breaking number of attendees for the Institute, Raworth suggested that transformation of the economy to save the planet is imperative and that the innovation we need is going to come from that bottom-up and be local. She is offering the Doughnut model as a guide and has launched the Doughnut Economics Action Lab as a collaborative toolbox for local economic renewal and participatory climate action.

The basic theory on Doughnut Economics focuses on a thriving future that emerges from balancing the ecological ceiling and the social foundation. The model has been adopted by over 40 cities and regions including Philadelphia, Amsterdam, Leeds, Barcelona, Mexico City, and Toronto. Place-based administrations and community coalitions around the world are using it as a way to reimagine and recreate the future in balance.

Raworth suggests that through multiple crises, humanity is awakening to an awareness of our profound interconnectedness with the living systems of Earth, and each other. Raworth’s idea for a regenerative and distributive economic reality is interesting. The framework borrows from the UN’s 17 Sustainable Development Goals to define the social foundation as the essential of life. The outside of the doughnut are the planetary boundaries defined by Roskstrom et al (2009). The planetary boundaries are what keeps life working on Earth. Raworth compares her doughnut to the dynamic circles of various Indigenous cultures around the world symbolizing health and wellbeing. She says that she is coming to see the doughnut as a “Western economic mindset recovery program”.  

We are paying attention to Doughnut economics because of the way that it embeds the economy within society and within the environment.

What does this mean for our clients and colleagues? We think that the model is useful as a holistic view for municipalities, civic organizations, businesses, trusts and finance. Whichever sector you are in, whether you’re in the visioning stage, looking for participatory tools for engagement or need just-in-time research or local impact analysis, we can help. Our consultants will partner with you to help you learn about the challenges of the changing world. 

Here are the eco-social and inventories areas of the doughnut. Contact us to learn more about the Doughnut or any of these parameters. Let us know if you are working on a Portrait of Place.

Ecological ParametersSocial Parameters
climate crisismobility / transportation 
load on the soilcommunity and connectedness
freshwater consumptionsocial participation and equality
loss of biodiversityhousing and energy
greenhouse gas emissionshealth and education
waste production, pollutionfood and water
deforestation and land use changework and income
air pollutionculture
peace and justice
political participation

Blog post is by Rachel Lyn Rumson


References

Rockström, J., Steffen, W., Noone, K. et al. A safe operating space for humanity. Nature 461, 472–475 (2009). https://doi.org/10.1038/461472a

Assessing the Carrying Capacity of the Blue Hill Peninsula

Assessing the Carrying Capacity of the Blue Hill Peninsula

What trends in Maine (unceded Wabanaki Territory) are threatening conservation of the farmland, forests, wetlands, and wildlife habitat that is needed to sustain ecological and community health in a changing climate?

As our communities attract more and (perhaps more urban and wealthier) households, how will the influx affect the capacity of our communities to sustain itself?

regional carrying capacity measures are social, economic and physical

The team at rbouvier consulting recently completed a study: “Assessing the Carrying Capacity of the Blue Hill Peninsula,” looking at just that. The project was done at the request of Blue Hill Heritage Trust (BHHT), a conservation organization that is shifting the meaning of conservation from recreation and scenic preservation to working lands and community use. BHHT uses outreach and education to increase the chances of fulfilling their mission: “to lead in conserving land, water, and wildlife habitat on the greater Blue Hill Peninsula; to teach and practice a stewardship ethic; to promote ecological, economic, and community health for this and future generations” (BHHT, 2022). The study looks at the current trends of climate and covid migration impacting the communities of the Blue Hill, Brooklin, Brooksville, Castine, Deer Isle-Stonington, Penobscot, Sedgwick, and Surry. 

Want to know what we found?

For this research, rbouvier consulting looked at two specific trends: 1) pandemic-related population trends and climate-related migration trends, trends that have the potential to impact the entire state.) Our charge was specifically to to the following:

  1. Assess the extent of COVID-19-related migration on the peninsula and its impacts.
  2. Investigate if climate migration is happening on the peninsula and what the future impacts may be.  
  3. Assess the carrying capacity of the Blue Hill Peninsula and the region’s ability to absorb an inflow of migration.

To assess how the COVID-19 pandemic impacted domestic migration patterns on the peninsula, researchers used change-of-address (COA) request data to quantify estimated change in population due to Covid-19. They identified the origins of movers to the project area, from 2018 to 2021 and determined the origins of migrating households. The findings show a clear overall increase in total COA requests (both permanent and temporary)  to the peninsula presumably due to COVID-19 (22%), with variable rates in each community, changing the trend from negative net population to positive. The group also looked at both school enrollment data and housing prices to learn more about the impacts on migration locally. Findings include:

  • Both temporary and permanent migration spiked in March 2020. Compared to March 2019, permanent COA requests were up over 53%, while temporary COA requests were up by almost 264%.
  • However, in 2021, those trends seem to have reversed, and net COA requests were once again negative, indicating that the population influx may not have been permanent.
  • Incoming COVID-19-related migration patterns reveal people moving to the peninsula were predominantly from outside of New England and from urban areas.
  • The number of building permits increased slightly, as did home sales and real estate prices.

To assess the impact of climate migration on the Blue Hill Peninsula our researchers were concerned with assessing a) if climate migration is occurring, and, if so, b) who is migrating and from where. To investigate these questions, we completed a literature review of climate migration studies, and inquired into national taxation data published by the IRS to compare filings before and after the pandemic. As part of our investigation, we compared migration trends with weather information for specific climate events and gleaned demographic information about climate migrants to the Blue Hill Peninsula. Further assessment was done to estimate the impact of this trend on housing, jobs, infrastructure and schools.

  • Households driving current climate migration trends have the financial wherewithal to move by choice to escape from perceived dangers (wildfires, flooding, hurricanes, or a pandemic).
  • The households that migrated to Hancock County in 2020 had an average income that was 20% above the average household income for the county in 2019.  

For this study, rbouvier consulting defined carrying capacity in terms of regional sustainability. Looking at regional analysis and tourism impact studies, we determined three interconnected component systems that simplify regional systems: a) physical, b) economic and c) social. With these three focus areas, we developed candidate indicators and screened those indicators for data availability and accessibility. Initial data collection focused on establishing a threshold level for each. With these indicators and baselines set, we evaluated each indicator against the threshold and were able to categorize each indicator with a rating scale based on levels of constraint on the system.  When we combine migration findings with carrying capacity analysis, the findings reveal present and future constraints on the carrying capacity of the region as follows:   

  • The impact of a wealthier, more urban population may affect the carrying capacity of the peninsula. 
  • The wastewater treatment facility in Blue Hill is not likely to be able to withstand a significant increase in population. Moreover, the facility is at risk from sea level rise. 
  • Roads and schools are likely to remain unconstrained for the foreseeable future.
  • Land for development is already constrained, though it varies in each community.
  •  There appears to be enough land for farming, but to the extent it is being farmed is unknown. Preservation of farmland is already below  conservation targets. 
  • Both cost of living and housing affordability are likely to worsen, as is the economic inequality in the region. 
  • Social conflicts are likely to accelerate between long-term residents and new arrivals.

 Why is this work important?

We feel that this is exactly the kind of research that communities should have at their disposal while they are working on planning the future in uncertain times. The pandemic might have spurred  a spike in migration, but  climate migration seems to be an progressive trend, bumping up migration with each significant climate event. That is why we have begun to study the migration trends for Cumberland County. We expect to release our findings to the public soon. So, stay tuned for that. In the meantime, we have permission to share the study if asked. If you would like to read Assessing the Carrying Capacity of the Blue Hill Peninsula, please drop us a line.

What You Need To Know About Maine’s Recycling Reform

What You Need To Know About Maine’s Recycling Reform

By Kayley Weeks

Maine lawmakers have passed the nation’s first extended producer responsibility law for packaging materials made out of materials such as plastic, cardboard and paper. The new law will require producers of products that are sold in Maine to pay a fee based on the type of packaging material they adopt for their products. While the law targets all types of packaging material, it is primarily meant to mitigate the impacts of plastic. 


Photo: Plastic waste on the ground” by Ivan Radic is licensed under CC BY 2.0.

Plastic is currently the most common material used for packaging. According to the Natural Resource Defense Council, 300 million tons of plastic are produced each year worldwide. Plastic was mass-produced for the first time after World War II.1 Companies preferred manufacturing plastics over traditional materials due to plastics’ overall versatility and affordable cost, resulting in the “Plastic Boom.” The rapid rate of plastic production did not leave significant planning time for the proper disposal of this material. In most municipal waste processing facilities, the majority of plastics are not recyclable. 

Before Maine passed the extended producer responsibility law, municipalities were financially responsible for processing any waste created by packaging materials. Municipalities generally send their recyclable waste to a processing facility. These facilities contract brokers to sell the material on the raw material market.2 It has been common practice for difficult to recycle waste to be sold and shipped to other countries that have their own waste disposal and processing laws. There is a common misconception that all recyclable waste is ethically disposed of, but hard-to-recycle waste often ends up in landfills in developing countries or unregulated dump sites resulting in harm to the people and environment. 

Extended producer responsibility creates an incentive for producers to use packaging that is more sustainable and less costly to recycle or dispose of. Without such an incentive, producers will continue to use what is of least cost to them, leaving disposal costs to fall on the shoulders of consumers and municipalities. 

In July 2017, China, the country that until then had been the primary buyer of the United States’ recycling material, banned the import of many types of foreign waste under Operation National Sword. Other bans followed. The impact of those bans reverberated throughout the world.  

Waste disposal costs increased sharply. In 2019, according to a report conducted by the Maine Department of Environmental Protection, managing waste from packaging materials cost Maine municipalities between $16 million and $17.5 million each year.That cost is then passed on to taxpayers.

Maine’s new law requires private companies to pay in advance to cover the cost of the disposal of accumulated packaging materials. The stewardship program achieves this by requiring producers to pay into a fund based on the amount and recyclability of their products. The collected funds will be used to reimburse municipalities for eligible recycling and waste management costs. 

Since Maine’s law was passed, Oregon and Colorado have recently implemented their own extended producer responsibility laws, meeting Canada and many European countries who have had similar programs for years. This new legislation could help to decrease property taxes throughout the state, because taxpayers will no longer be responsible for covering the cost of packaging waste disposal. But, do not expect to see an immediate change. Due to the complexity of the reform and the large number of impacted stakeholders, the law will not formally go into effect for another 18 months. Municipalities will most likely receive their first payments in 2027. 

This is an example of what economists call “internalizing the externality.” By incorporating the cost of proper disposal into their production costs, producers are incentivized to develop packaging that is less costly to properly dispose of, and consumers may be prompted to buy products that are less damaging to the environment. Incorporating the full economic costs – financial, environmental, and social – into the price of a product will lead to more responsible long term decisions. 

Plastic was first mass-produced post-World War II. Then it surged again in the 1960’s and 1970’s 1. Consumers preferred plastics over traditional materials due to plastics’ ability to be produced in many different shapes and sizes, overall versatility, affordable cost and sanitation. These characteristics led to the rise of plastic, otherwise known as the Plastic Boom. The rapid rate of plastic production did not leave significant time to properly plan the best approach for disposing of this material. Today, plastic is the most common material used for packaging.

In the past, municipalities were required to pay for their own recycling or try to sell it on in the waste market. China, historically, has sorted waste and  reimbursed municipalities for valuable items. Now, municipalities have to pay other countries to take their waste, and the majority of that waste ends up in landfills in developing worlds, or unregulated dump sites. Not properly disposing of plastic waste is harmful to the environment. This is an unpleasant awakening to Americans due to the conjured up reality that there is a serious exportation problem. 

What exactly is producer responsibility? Producer responsibility will require that the companies that make products sold in Maine,  pay a fee per ton of packaging material that they create based on how recyclable the packaging is. The idea is that material that is easy to recycle will cost less, while harder-to-recycle materials will require a larger fee. The fees will then be reimbursed to municipalities. 

Producer responsibility creates an incentive for producers to use packaging that is more sustainable and easy to dispose of. Without any incentive, producers commonly cut corners to save money by using cheaper materials to package their products. 

Since January 2018, this practice has taken a toll on municipalities because China began to refuse to take any foriegn waste. Cities and towns have to pay more for recycling since China’s ban because there is no place for hard to recycle materials to go. 

In June 2021, Maine passed a new law requiring private companies to shell out the cost to dispose of packaging waste. Maine is the first state in the nation to pass this sort of legislation, meeting other countries around the world who have had similar programs for years. This new legislation could help to decrease property taxes throughout the state. But, do not expect to see an immediate change.

The law was originally drafted by the Maine Department of Environmental Protection in 2019, and was finally passed last summer. Due to the complexity of the reform and the large number of impacted stakeholders, the law will not formally go into effect for another 18 months. Municipalities will not catch sight of their first payments until 2027. 

Blog Post by Kayley Weeks.

1 Rogers, Heather. “A Brief History of Plastic – The Brooklyn Rail.” The Brooklyn Rail, May 2005, https://brooklynrail.org/2005/05/express/a-brief-history-of-plastic. Accessed 24 June 2022.

2 US EPA. “Recycling Basics | US EPA.” US Environmental Protection Agency, 21 December 2021, https://www.epa.gov/recycle/recycling-basics. Accessed 13 July 2022.

3 Natural Resources Council of Maine. “New Maine Law Will Shift Recycling Costs to Producers of Packaging Waste.” 13 July 2021, https://www.nrcm.org/sustainability/new-maine-law-shift-recycling-costs-to-producers-packaging-waste/. Accessed 8 July 2022.

China Recycle Ban Brings Challenges and Opportunity

China Recycle Ban Brings Challenges and Opportunity

Recycling changed dramatically in 2018, when China went from accepting 45% of the world’s plastic waste to almost none. As a result, by 2030, up to 111 million metric tons of plastic could be displaced.[1]

All that extra plastic, as well as the paper and other materials China is refusing, has significant and far-reaching effects. It impacts waste management systems and the economics of recycling, and it may also force people to re-evaluate their behavior.

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