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Rising seas, rising problems: Using locally relevant data to prepare solutions.

Rising seas, rising problems: Using locally relevant data to prepare solutions.

What is a Nor’Easter?

In January of this year, coastal communities on the East Coast were hit with a Nor’easter that set record snow falls in Boston. The storm brought more than just snow, with severe winds, power outages, and flooding. Nor’easters are a type of storm caused by low pressure moving along the coast. Pressures from a storm moving along the coast cause strong winds to push water toward the shore. Some coastal areas in the state were completely underwater around high tide from the storm surge flooding. Waves toppled over seawalls, flooding streets. The island of Nantucket saw the worst of it. There were even reports of young men using a canoe to travel through the flood streets of Nantucket. Storm surge from the nor’easter also caused significant erosion to the beaches along the coast. Local papers in Boston have reported on stories of storm surge erosion cases on Cape Cod where houses fall into the sea. One house in Truro, MA lost twenty 20 feet of Earth underneath it. It was standing on pilons for months as surge after surge eroded the remaining due, as local planning officials tried to decided how to move the historic building. It was moved at the time of this writing.

The Issue 

While nor’easters are an event that New England has long been familiar with, climate change has already begun to exacerbate the severity and frequency of these storm events, along with their consequences. Storm events, extreme high tides, and rising seas intensify flooding and put vulnerable communities at risk. The number of coastal flood days in Massachusetts, shown in the graphic below, increased drastically in the last two decades.

Findings from 2016 from at Climate Central study covered by the New York Times, via https://riskfinder.climatecentral.org/state/massachusetts.us?.

Solutions & Our Contributions 

It is becoming increasingly clear how important it is for communities to prepare for a changing climate. As the implications of climate change come to a head, effects will be felt disproportionately across populations, communities, regions, and industries. It’s vital that we assess the areas in which we are vulnerable and are resilient. 

rbouvier consulting recently partnered with the Southern Maine Planning and Development Commission (SMPDC) to assist in their economic resilience planning project for coastal York County, where we were tasked with conducting a socio-economic impact assessment of sea-level rise and storm surge to six coastal communities in southern Maine. 

Geospatial experts from GEI Consultants were also partnered on the project. With capabilities of today’s geospatial technology, GEI Consultants were able to provide us with the physical vulnerabilities of the project area at different sea-level rise and storm surge scenarios. They combined data on businesses, roads, and other important infrastructure with floodplains to produce geospatial layers and other data products that show what of the infrastructure in the area will be impacted at 1.6 and 3.0 feet of sea-level rise.This information allowed us here at rbouvier consulting to determine what culturally and economically significant infrastructure is at risk of flooding or impaired access, such as economic service areas or beaches that draw tourists into Maine. 

Using business-level data on sales revenue and employees, along with data on local demographic and economic conditions, rbouvier consulting was able to assess how sea-level rise will affect output and employment in the area. We determined what industries in the area are most at risk based on the businesses that are within floodplains, and related the risks posed to those industries to the health of the local and regional economies. Conducting a socio-economic impact assessment of sea-level rise tailored to the local conditions of the communities in the project area allowed us to pinpoint areas of economic vulnerability and resilience, and subsequently determine a number of adaptation and mitigation strategies we feel best prepares these communities for a changing climate. 

If you’re interested in talking to rbouvier consulting about climate change solutions and the types of services we offer, please send us an email.

Blog Post by Averi Varney.

The things we value

The things we value

Graywalls, CC BY-SA 4.0 https://creativecommons.org/licenses/by-sa/4.0, via Wikimedia Commons

As an environmental economics firm, we are often called upon to assign a dollar value to something that doesn’t normally have a price tag assigned to it. This is often a confusing, and sometimes contradictory, idea to many people.  In the United States we live in a culture that tends to equate something’s value in terms of how much it can be sold for. It’s easy enough to say that the value of a forest is in the number of board feet of lumber that would be produced out of it, but that wouldn’t give you the value of the forest’s beauty, or the watershed protection benefits, or the clean air it provides.

To assign a value to these things we might look at the mental and physical health benefits of spending time in a beautiful place; increased mental and physical health can result in decreases in medical costs. A forest’s watershed protection can be measured in the cost savings of reduced levels of water filtration needed for drinking water, and clean air benefits can be seen in reduced rates of lung disease and the associated costs of treating it. And those dollar values can be presented to city councils, congress, or whomever else you might need to convince that protecting forest land has value beyond just the timber in its trees.

While this may be great for trying to persuade your local city council that a patch of forest is worth protecting, it rapidly proves inadequate when looking at the personal, more human value.

How do you put a dollar value on being able to look back on the memory of walking through the woods with your children and being witness to their joyful explorations of the natural world? How do we quantify the opportunities for human connection provided by parks, forests, and other open, and thus safer, spaces during a pandemic? How do we quantify the loss when the spaces in which we created memories, found peace, or took refuge are gone?

A poet might say we measure these things by the space they take up in our hearts or the hole they leave behind when they are gone. But then we aren’t really known for valuing the words of the poets either.

What if we expand beyond forests? How do we put a value on the feeling that comes with having a safe, warm place to live?  Or not having to choose between one’s health and the expense of a medical bill? What is the value of the absence of hunger?

Many of us don’t ever think to put a value on those things because we’ve always been safely housed, had access to medical care, and have never experienced food scarcity. These things have no value to us until we find ourselves without them.

Is the value of a safe place to live measured in the number of nights you go to sleep without worrying where you might sleep tomorrow? Can access to medical care be measured in the years of memories you are able to make, and the stories you can pass on because you lived instead of dying too early?  Is the absence of hunger quantified by the thoughts you are able to think when your brain is not busy figuring out where the next meal comes from, or how to feed your children?

The pandemic has made many of us realize the value of the things we couldn’t put a price on until they were made absent in our lives. Gathering with friends and family, being able to spontaneously hug another person, the enjoyment of previously innocuous activities like sharing a meal together, and a general feeling of being safe in the world. And for a whole lot of people, it was the first time that they experienced the thought that there might not be a tomorrow.  They were only able to assess and quantify things like human connections and what it means to feel safe by their sudden absence.

There is one more step in assigning a value to something, and that is using that value to communicate the need for action. Just as we might use the value of watershed protection to communicate the need for the protection of forests, we can use our new understanding of the value of safety, connection, and hope to advocate for others.  We can remind ourselves that while this feeling was new to us, there are many people who live entire lifetimes where the possibility of tomorrow is not a given.

The value of human experience isn’t measured in a dollar amount but in what we choose to do with it. Let’s make 2022 the year we take what we have learned and use it to make sure that tomorrow is something we all have the opportunity to look forward to.

Quarterly Journal Review

Quarterly Journal Review

It’s been a while since I’ve shared quarterly journal reviews! In this post I review interesting journal articles from the first three quarters of 2021.

  1. Banerjee, P., Pal, R., Wossink, A., & Asher, J. (2021). Heterogeneity in Farmers’ Social Preferences and the Design of Green Payment Schemes. Environmental and Resource Economics, 78(2), 201–226. https://doi.org/10.1007/s10640-020-00529-7

The first article to catch my attention was Banerjee et al. on the design of green payment schemes.  The article discusses “green payment schemes,” or payment programs designed to give an incentive for farmers to produce “public goods” – to provide more conservation areas, for example, or to practice no-till farming methods to reduce soil erosion. However, the authors point out that typical green payment schemes ignore differences among farmers, and assume that all farmers are solely motivated by profit. Banjeree et al develop a model that takes into account farmers’ different motivations, and the existence of a social norm for environmental preservation. They conclude that coupling a monetary payment with a “social award” would entice more farmers to take advantage of green payment schemes. 

  1. Corona, J., Doley, T., Griffiths, C., Massey, M., Moore, C., Muela, S., Rashleigh, B., Wheeler, W., Whitlock, S. D., & Hewitt, J. (2020). An Integrated Assessment Model for Valuing Water Quality Changes in the United States. Land Economics, 96(4), 478–492. https://doi.org/10.3368/wple.96.4.478

I was also fascinated by an article written by several economists (plus a biologist and an engineer) at the US Environmental Protection Agency. It discusses an integrated assessment model (IAM) to measure the effects of policies designed to improve water quality. (IAMs have been used most popularly to look at the effects of climate change mitigation policy on economic outcomes.) For an economist like me, this model could potentially fill a huge hole. We may know the pathway from an environmental policy to water quality, and we may know some information about the connection between improved water quality to social and economic benefits, but an IAM links the two, making cost-benefit analyses easier to perform and understand. As the authors explain, the modeling platform is designed to quantify the economic benefits of water quality improvements to the nation’s freshwater rivers and streams” (page 479). After describing the model, they apply it to a case study in the mid-western United States. Although the model is still being developed, they hope to make an open source version of it available in the near future. 

  1. Dunning, K. H. (2020). Building resilience to natural hazards through coastal governance: a case study of Hurricane Harvey recovery in Gulf of Mexico communities. Ecological Economics, 12.

Another article that speaks directly to one of the projects that we are working on now is this article, which asks, “how [do] institutions for coastal governance respond to hazards, and how do those responses relate to resilience of human and natural systems?” Essentially, the author’s key takeaway is that higher levels of government take longer than is necessary to respond to disasters. Because of this, she recommends the formation of “sub-national” collaborations, including charity and non-profit groups. While coordination among such groups can be challenging, planning and assigning roles before a disaster strikes can save crucial time, money, and resources.   

  1. Da Rocha, J. M., García-Cutrín, J., Gutiérrez, M.-J., Prellezo, R., & Sanchez, E. (2021). Dynamic Integrated Model for Assessing Fisheries: Discard Bans as an Implicit Value-Added Tax. Environmental and Resource Economics, 80(1), 1–20. https://doi.org/10.1007/s10640-021-00576-8

Switching gears a little to another area that I am interested in and that is relevant to my adopted home state of Maine is this article on banning “discards” in commercial fishing. The “bycatch” issue in commercial fishing has always been a problem: as fishermen are focused on catching high value fish, any fish they catch “incidentally” may be discarded as bycatch. Most of the time, that bycatch does not survive. Several countries have implemented discard bans in various forms. This article examines discard bans using an integrated assessment model (see above). They find that discard bans not only improve the sustainability of a fishery, but can also increase economic welfare in the long run. 

  1. Carlsson, F., Gravert, C., Johansson-Stenma, O., and Kurz, V. 2021. “The Use of Green Nudges as an Environmental Policy Instrument,” Review of Environmental Economics and Policy 15:(2). https://www.journals.uchicago.edu/doi/abs/10.1086/715524

If you follow behavioral economics at all, you’ll recognize the term “nudge.” A “nudge” in terms of economics is defined as “a change in the [decision-making] environment that influences people’s behavior without prohibiting any choices or significantly changing the economic incentives”.* Economics is all about incentives – subsidizing behavior we feel is important or beneficial to society, while taxing those behaviors we feel are harmful to society. A nudge is a bit different – the idea here is that policy makers can change people’s decisions by simply changing the environment within which they make those decisions. Probably the most famous example is that of contributions to retirement accounts, whereby businesses discovered that people contributed more to their retirement accounts if they had to “opt out” (i.e., actively choose not to participate) than when they had to “opt in” (i.e., actively choose to participate. According to standard economic theory, that context should not matter to an individual’s decision-making process. But evidently it does. 

The authors divide green nudges into pure green nudges, and moral green nudges. A pure green nudge simply makes it easier for an individual to choose a more environmentally-friendly option (for example, making the “green energy choice” the default rather than an alternative, or, making the environmentally friendly options more prominent on a menu or in a grocery store). A moral nudge rewards individuals for “doing the right thing” by intentionally triggering a psychological response such as pride or shame. Examples of moral nudges might be moral suasion, social comparisons, or goal setting and commitment. 

Research that compares the effectiveness of green nudges versus more conventional economic policy instruments is still in its early stages, but it is a fascinating area of study. 

* Thaler, R., and C. Sunstein. 2009. Nudge: Improving decisions about health, wealth, and happiness. New York: Penguin.

  1. Gawith, D., Hodge, I., Morgan, F., & Daigneault, A. (2020). Climate change costs more than we think because people adapt less than we assume. Ecological Economics, 173. https://doi.org/10.1016/j.ecolecon.2020.106636

Finally, I was also intrigued by this article, as rbouvier consulting is currently working on a project estimating the economic costs of sea level rise in a county in southern Maine. This article discusses how the current estimates of the cost of climate change may actually be too low, because those costs assume that people will adapt to climate change (for example, planting different crops, changing occupations, or moving locations) if they can. However, literature in behavioral economics (see article above) points out that individuals are much less pliable in their behaviors than traditional economists would like to believe. The model and empirical is rather technical and probably inaccessible to those not familiar with sophisticated environmental and economic modeling. The basic idea though, is simple: because of barriers to behavioral change, individuals may not adapt to climate change as much as economic models assume, and therefore climate change may be even more damaging to the economy than previously thought.     

~ Rachel Bouvier

2020 sucked…but there’s good news

2020 sucked…but there’s good news

A week ago, I sat down to write an end of year blog post. My colleague Joie had assigned me the task, “2020 sucked but here’s some good news.” It felt overwhelming and impossible. What good news could I possibly write about, during a raging pandemic, ongoing environmental gloom, protests against injustice all over the country, gridlock in Washington… You see my dilemma. My first thought was to give up, and email Joie to say that I just couldn’t do it.

But I hate letting Joie down. So I did what anybody would do in this situation, and googled it: “positive environmental news 2020.” Turns out that there are several sites out there that are devoted to posting positive environmental news stories – not in a Pollyanna-ish, stick-your-head-in-the sand kind of way, but more as a counter to the persistent doom-scrolling many of us have been engaging in lately.

I read about the founder of one of these sites, Grant B. from Happy Eco News . He writes, “I found that when I really started looking, I could see in between all the doomsday articles and posts, were a few that were actually very positive. And so I started saving them with the intention of sharing with friends to let them know that there is some good news.” One thing lead to another, he says, and now he posts on average five times a day, and rounds up the week’s news with the weekly Top 5. Clicking on random posts within the website, I realized that there is a lot of good news out there, but our minds get hijacked by the constant doom-mongering. Outrage gets more clicks than hope. News networks and social media algorithms know that, and they take advantage of it.

So here are a few positive developments from the past year that focus on the intersection between economics and the environment:

1. President-elect Joe Biden has pledged to return to the Paris climate accord, and has appointed John Kerry as “climate envoy” and Gina Mccarthy as climate czar (Kerry’s focus will be international, while Mccarthy’s focus will be domestic) Biden’s Twin Climate Chiefs, McCarthy and Kerry, Face a Monumental Task). While we try not to be too overtly political in this blog, the fact that the climate will be elevated to such a high level in the incoming administration gives me a little hope. Not too much- I’m not going to go crazy or anything – but some. Plus, as I’m always reminding my students, real climate action takes place at the state and local level, and there’s a lot going on in Maine (where we’re located) right now.

2. Renewable energy is gaining ground. Coal is finally on the decline. Britain is ending subsidies for fossil fuel industry. While I am mindful of the difficult transition those who work in the fossil fuel industry are facing, ultimately this is good news both for the climate and for air quality.

3. Past and current injustices are being uncovered. The shooting of Breanna Taylor in March and the horrific murder of George Floyd in May served as (yet another) wakeup call to the reality of structural racism in this country. While there’s a real temptation to think that things are getting worse, perhaps they are finally being uncovered, to paraphrase adrienne maree brown. We cannot create a more sustainable future without acknowledging and reckoning with our past. 

4. The Great American Outdoors Act. Not only is the Great American Outdoors Act one  of the biggest pieces of federal environmental legislation since the Clean Air Act, it is also one of the few examples of successful bipartisanship that we can point to. The legislation provides badly needed funding to restore crumbling infrastructure in our national park system, and guarantees a steady stream of funding for the Land and Water Conservation Fund.

 5. Technology. Advances in lithium batteries could soon make the “million-mile” battery within reach. Advances in hydrogen fuel cell technology, as well, could help us in our quest to decouple the economy from fossil fuel use

6. Socially responsible investing hits the big time. 2020 actually began with a letter from Larry Fink, CEO of BlackRock, to his investors. In that letter, he called for a fundamental reshaping of finance, recognizing that climate risk is financial risk. BlackRock is now, in their own words, putting sustainability at the center of their investing. It remains to be seen whether this gesture marks a seachange. But when the world’s largest investment firm makes a commitment to sustainability, others will sit up and take notice.

So, yes. 2020 was a dumpster fire of a year, no question. And yet, there is some positive news on the environmental / economic front. We just need to remind ourselves to look.

Green Economic Recovery

Green Economic Recovery

Michael Surran, CC BY-SA 2.0 https://creativecommons.org/licenses/by-sa/2.0, via Wikimedia Commons

The one-two punch of recession-pandemic this year has made vulnerability a more pressing topic globally. While resiliency has been discussed in our previous blog post, how to develop it requires a thorough understanding of where the metaphorical weakest link is. COVID-19 has proven to be an accelerant in many industries both in terms of developing trends and uncovering flaws in our economy. These vulnerabilities become much more apparent when considering the risk to human life imposed to our communities. 

U.S.News & World Report ranked Maine as the most economically vulnerable state to the pandemic. Maine has the highest percentage of citizens over the age of 65 (20.6%) and our economy is the 6th most dependent on tourism and hospitality. The state is in economic hardship from missing out on the full summer tourist season which has rippling effects across small businesses. While the pandemic may not be a long-term problem for the state, the vulnerabilities it has exposed will be and should be addressed now to develop resilience.

Looking further ahead, Maine has other long-term economic vulnerabilities. The dependency on tourism and hospitality has shown us that having diverse industry representation like manufacturing and skilled professionals is essential for economic resiliency and growth. The global climate crisis will have lasting impacts to the state’s economy and public health. The Gulf of Maine has been found to be warming faster than 99% of the global ocean, disrupting the fishing industry and weather patterns in the area. The threat of sea level rise will dramatically impact coastal communities around the state which represent 34% of its population. The economic impact of these changes means that the once scenic locations are at greater risk of flooding, higher insurance rates, and less attractive for industry. Due to these challenges, Governor Janet Mills has set goals to reduce greenhouse gas emissions by 45% by 2040 and 80% by 2050. 

A new study from Robert Pollin and the Political Economy Research Institute at UMass-Amherst shows how to start the economic recovery in Maine by addressing the climate crisis.  The primary directive is for the state to invest in large scale projects to update the energy structure of the state. Coming from both the supply and demand side with energy efficiency standards and expanding on renewable energy in wind and solar. Given the temperature shifts in the state, energy efficiency is invaluable to buildings in the area so public buildings would undergo deep energy retrofits.

The economic impact of the program would be dramatic, estimating that $2 billion in investment from public and private sources would create nearly 15,000 jobs by 2022;  An investment of this scale would represent 2-2.5% of Maine’s economy each year.  Short term stimulus will boost the current recovery and long-term infrastructure investment will create jobs at scale and with longevity. The long-term annual investment of $500 million from 2021-2030 would create 7,300 jobs per year. These would be good paying working class jobs that would support Maine families. 1

Transitioning into clean energy will  help shape a new perspective around climate policy with equity in mind. Creating good working-class jobs demonstrates that tackling climate change isn’t an elitist issue and the benefits of doing so far outweigh the costs. Nate Barr of Zootility, tool manufacturer turned mask maker, has a factory right next to the Portland Waterfront, he says “If we don’t tackle climate change, we’ll literally be underwater.” While it may be more expensive to address climate change than ignore it in the short term a greater vulnerability will be exposed in the not so long-term. Climate change will then cripple local economies much like COVID-19 has already. 

Our firm looks to address environmental issues to improve economic conditions. We do this by expanding our perspective to see how vulnerabilities can transition into resiliencies. Maine wasn’t built to handle COVID-19, but it can develop the infrastructure to combat the climate crisis and come back stronger from this pandemic. 

Policy implementation like this will need broad public support to create significant change. Elected officials base decisions on their constituents’ views highlighting the importance of clear public opinion. Look at your elected officials and see their stance on climate change. Write to them and share your views on making the economy more equitable and sustainable to create the shift needed for change. Policy decisions are one of the most effective ways to address climate change and develop a more climate conscious economy. We understand that political views are very personal but the impacts of climate change will be very real. Knowing where elected officials stand before November 3rd will make you an informed voter and citizen, but most importantly, make sure you vote.

Written by Tom Dolloff, Intern

  1. Schreiber, Laurie. “New Study: Maine Can Recover from Economic Crisis by Addressing Climate Change.” Mainebiz, 31 Aug. 2020, www.mainebiz.biz/article/new-study-maine-can-recover-from-economic-crisis-by-addressing-climate-change?utm_source=Newsletter.
River Voices

River Voices

A flier that includes information on the publication of the book River Voices published by North Country Press.

We are excited to announce the publication of River Voices: Perspectives on the Presumpscot published by North Country Press. The book includes a chapter by Dr. Rachel Bouvier, “The Economic Value of a Restored Fishery on the Presumpscot River.”

In describing the chapter Dr. Bouvier said, ” I discuss the economic value of restoring a native alewife run to the Presumpscot River, one of the most heavily dammed rivers in the northeast. The chapter discusses traditional economic values such as increased property values and tourism, as well as less well measured – but no less important – values such as community revitalization, quality of life, and civic pride. It is not often that we get a second chance at something, from an ecological perspective. But just last year, one of the dams that has been impeding alewife from returning to the Presumpscot was removed. It heralds a new era for the fish, for the city of Westbrook, and for the environment.”

The publishers website describes the book as “a celebration of a river, a vision of stewardship and caring, with chapter topics ranging from geology to Native American history to fighting for fish passage. Illustrated throughout with original and historical works of art, this book embodies the concept of managing a river through appreciation of all of its attributes and aspects. If you live in this watershed you will appreciate it.  And if you live somewhere else, this is a model for caring for a river.”

For more information or to purchase a copy of the book visit North Country Press.

Quarterly Journal Reviews

Quarterly Journal Reviews

1. Economic valuation of green and blue nature in cities: A meta-analysis

Marija Bockarjovaa, Wouter J.W. Botzena, Mark J. Koetse

Ecological Economics 169 (2020)

Environmental economists have long maintained that nature and the ecological services that nature provides are vastly undervalued. This undervaluation of “natural capital” relative to other types of capital is one of the primary drivers of environmental damage.  But getting the prices right – putting a “value” on the environment – is not an easy thing to do well. Many times we rely on complicated statistical models (see below) to attempt to  “tease out” the value that people put on the environment by looking at their actions, or by their responses to carefully designed surveys.

Environmental economists have been relying more and more in recent years on a methodology called “benefit transfer.” Essentially, this is a method by which the value of a certain environmental good or service in one area is simply applied (transferred) to another area. While easier and certainly cheaper, there are serious methodological concerns about the technique.

One way of circumventing some of those difficulties is to use a method called meta-analysis – whereby many different environmental valuation studies are brought together in one large dataset and analyzed for any statistical regularities. This particular study examined 60 such studies worldwide, focusing on the economic value of nature in cities, to determine characteristics that are associated with either a higher or lower stated value.

The authors find, not surprisingly, that an area’s average income level is associated with a higher stated value. “The interpretation is that natural areas in regions with a 1% higher income have a 1.4 to 1.5% higher value.” They also find that areas with a higher population density also have higher values.  Secondly, the authors look at the vehicle through which the value is elicited- in other words, whether the survey respondent was asked to value urban nature through a tax, an entry fee, or a donation to a fund. Interestingly, results demonstrate that “nature values elicited by means of a tax as a payment vehicle were systematically valued lower compared to values elicited by means of other payment mechanisms, such as an entry fee or a donation to a fund.” Finally, the authors examine different types of urban green space, and find that parks are the highest valued type of urban greenspace, followed by “blue sites” (Iakes, rivers, ponds, etc.).

2. Who Cares? Future Sea Level Rise and House Prices Land Economics • May 2020 • 96 (2): 207–224

Olga Filippova 

Cuong Nguyen 

Ilan Noy 

Michael Rehm

Does the finding that a property is at risk from sea level rise lead to a decrease in property value? This article takes advantage of a unique case study in New Zealand to address that question. In 2012, the Kapiti Coast District Council produced and published detailed projected erosion risk maps. The Council then notified property owners in areas deemed to be at risk, and placed that information on memorandums that were then made available to every potential property buyer. Later, in 2014, the council had to remove the maps from online access, due to the actions of a small but vocal group of property owners worried about the effect of the information on property values. These events set up a perfect experiment for the researchers, as they could compare property values and sales during the time that the information was made available to the period when it was not. 

After conducting the analysis, the authors conclude the following: “Overall, given the known hazard risks, buyers are still willing to pay the same premium for these coastal properties, and appear to largely ignore the new information they received in 2012. In short, the erosion risk information being placed in the LIM reports seems to have had little effect on property pricing.”  While this effect may seem counter- intuitive, it is actually consistent with other studies examining the effect of what is seen as a risk in the distant future. While other studies have found that current flooding affects property values, people react less strongly to threats that are seen as hypothetical or occuring in the distant future. 

3. Legacies of Lead: Estimating Home Buyer Response to Potential Lead Exposure

Nicholas B. Irwin Land Economics • May 2020 • 96 (2): 171–187

Much like the previous study, this study examined the effect of a potential environmental threat – this time lead exposure – on property values. In this study, however, the author found that houses most likely to contain lead and located in areas that had been labeled “at risk” by the state of Maryland experienced a substantial price penalty of 7.7%. Using sophisticated statistical techniques, the author was able to determine that the price penalty was “attributable solely to the information about potential lead exposure,” not to other characteristics of the property or the area. Furthermore, the author found that the negative effect persisted and actually became stronger over time.

The author also found evidence that neighborhood composition shifted following the implementation of the program, “with a decrease in the number of white mortgage applicants in at-risk areas and an increase in the spread of incomes for all mortgage applicants.” The author then warns of the unintended consequences of such a program, noting:

“the goal of the policy was to prevent childhood lead exposure by coarsely targeting potential lead risk areas, which shifted home buyers’ perceptions of risk based on an entire area’s designation as a risk zone. This then capitalized in the form of lower house prices for houses located in the at-risk areas most likely to contain lead, which, in turn, altered said neighborhoods as they became less attractive to some while becoming more affordable for others. These changes in neighborhood composition could be leading indicators for longer-term cycles of neighborhood decline due to a perceived stigma of living in an at-risk area.” 

These findings have clear implications for environmental justice, and point to the need to think carefully about the unintended consequences of a program such as this one. Yes, residents should be made aware of the potential risks of the area in which they live; but the policy also may have created a situation where some individuals were able to escape that risk, while others may have been forced to accept a tradeoff between homeownership and increased environmental risk.

Resilience in the Age of COVID-19

Resilience in the Age of COVID-19

An example of climate change resilience planning chart

In our field, the term “resiliency” is typically thought of as resiliency to climate change . However, economic resiliency can also be resiliency to any sort of disaster – economic, human- caused, or “natural”. Economic resiliency or an economic resiliency study (sometimes called a vulnerability assessment) involves taking a good hard look at your community or your company, its strengths and weaknesses, and the connections between its various parts. If one part of the system breaks down, what are the impacts of that on the larger system? If one component is particularly vulnerable to an outside threat, are there alternatives if (when?) disaster strikes?

COVID 19 is making these vulnerabilities abundantly clear. Although vulnerability to climate change and vulnerability to a pandemic are different threats, , they involve some of the same basic questions. A closer look actually reveals some connections between the two seemingly different issues. 

For example, let’s look at why the United States has had such a difficult time rolling out adequate testing. Yes, the capacity is there, as the federal government has said, but the theoretical capacity is different from the actual ability to complete the entire sequence of events from start to finish. It actually is a good case study that illustrates the connections between public health, supply chains, and climate change.

Let’s start by looking at the chain of events that has to take place in order to carry out a successful testing regime. Yes, we need to have a lot of tests available -and we need to have a lot of medical personnel able to administer those tests. Most tests are administered via a swab that is inserted in the patient’s nose to where the nasal passage intersects the back of the throat, meaning we need to have an adequate number of specialized swabs available. After the specimen is obtained, the swab then needs to be transported in sterile saline  to a lab for analysis. Once at the lab, there needs to be an adequate amount of materials to run the analysis, including chemicals, machinery, and people. Only then can the results be made available. Looking at the chain of events and the things needed for each event to occur can reveal a lot about the vulnerability of a system. A chain is only as strong as its weakest link, as the maxim goes.

Remember Hurricane Maria? Hurricane Maria savaged Puerto Rico in 2019. It turns out that most of our country’s manufacturing of saline and saline bags is located on the island. The testing swabs mentioned in the previous paragraph need to be stored in saline in order to be transferred to a lab for testing. While health economists highlighted this weakness in the medical supply chain during the flu season of 2018, it was not adequately addressed.

 This example underscores the idea that analyzing vulnerability to an unexpected event – whether to a hurricane or a pandemic – follows the same formula: Vulnerability = exposure times probability times impact. It also highlights the fact that vulnerability to one disaster (hurricanes) can exacerbate vulnerability to another ( a pandemic).That vulnerability can have serious economic implications, as we are finding.

Our next blog post will be on economic vulnerability to COVID-19, and the way communities can build resilience.

Black Lives Matter

Black Lives Matter

Black Lives Matter

When talking about sustainability we often use the metaphor of a three legged stool.  We take great pains to explain how each leg – economic, social, and environmental – is essential to ensure that the stool will hold the person who sits on it. The person in this metaphor is us, human beings and the world we live in.

If these three pillars are the stool’s support, justice is the glue that holds them together. Without justice the stool will not stand. If we take an honest look at the sustainability table we are all gathered around, the faces are mostly white, and there is no place to sit.  

This is not new. Racism is present in every aspect of our culture. Our own movement of environmentalism has a history that is rooted in racism

The death of George Floyd at the hands of Minneapolis police officers has placed our failures as individuals, and as a culture, before us. We can’t deny the lack of justice in our country.  We can’t claim to be working towards a more sustainable world and turn away. 

As a company and as individuals we support and stand with Black Lives Matter.  We acknowledge our own shortcomings, our own biases, and our own culpability in the unjust society that privileges us at the expense of others. We are committed to educating ourselves, to investigating the consequences – intentional and unintentional – of our actions and the policies we support, and to emphasize the essential role of justice and equality in working towards a more truly sustainable society. 

Resources:

Black Lives Matter

Environmentalism’s Racist History

How Sustainability Professionals can Uplift the Black Community

Third Quarter Journal Reviews

Third Quarter Journal Reviews

1. Can proximity to urban green spaces be considered a luxury? Classifying a non-tradable good with the use of hedonic pricing method Edyta Łaszkiewicz⁎, Piotr Czembrowski, Jakub Kronenberg  Ecological Economics 161 (2019) 237–247

In this article, the authors examine apartment rents in Lodz, Poland, to see whether proximity to “green space” (defined as parks, forests, cemeteries, and allotment gardens) could be considered a luxury good, by which the willingness to pay increases disproportionately as income increases. The authors examined how apartment rents varied according to distance to green space, while controlling for other factors such as square footage and other characteristics. Results demonstrate that proximity to parks and forests has a positive effect on apartment rents – in other words, the closer the park or forest, the higher the apartment rent. However, the results demonstrated that proximity to cemeteries has a negative effect on apartment rents. Although the authors did not discuss this, there is an environmental justice component at play here – if proximity to urban green space is considered a luxury good, then low-income housing is likely associated with a lack of urban green space.

2. From supply to demand factors: What are the determinants of attractiveness for outdoor recreation? Lea Tardieua, Laetitia Tuffery  Ecological Economics 161 (2019) 163–175

Sites such as national parks and other outdoor recreation parks must pursue the dual goal of environmental conservation and attracting recreation.   Managers of such sites constantly face the challenge of increasing visitors without destroying the attributes that appeal to such visitors in the first place.  However, models that predict how attractive a site is to recreation are typically different from those that predict how ecosystem services vary by site. Because of this, it is difficult for managers to evaluate land use tradeoffs. The authors of this study combine data on visitation to a national park in France with spatial data showing characteristics of the specific areas that were visited, and simultaneously relied on a model that predicts habitat quality (the InVEST software). The authors find a negative correlation between the attractiveness of a site to recreation and habitat quality, implying that the two goals (increasing recreation and preserving biodiversity and habitat quality) are at odds. This is not terribly surprising. However, the integration of the economic “travel cost” model with the habitat quality model may be helpful to evaluate the trade-offs arising from land use change proposals.

3. Microclimate effects of wind farms on local crop yields Daniel T. Kaffine Journal of Environmental Economics and Management 96 (2019) 159–173

In Maine, as well as in other states, the possibility of using wind farms to generate more renewable electricity has become a key strategy in mitigating climate change. In many cases, wind farms are sited on agricultural farms as a possible added source of income to farmers. However, one of the possible externalities of wind farms – the effect of wind farms on crop yields – has not been much studied in the economics literature. This article examines microclimate effects: the changes in local temperature, moisture, and carbon dioxide concentrations due to “vertical mixing, turbulence, and wakes created by wind turbines that extend well-beyond their local footprint” (p 159). The article itself is fascinating – describing the scientific microclimate effects of wind farms and their resulting effects on crop yields (soy, wheat, corn, hay, and wheat). Fortunately for advocates of wind power, effects of wind farms on crop yields are either positive (in the case of corn, soy, and hay) or statistically insignificant (in the case of wheat). 

4. The effects of recreational cannabis legalization on forest management and conservation efforts in U.S. national forests in the Pacific Northwest Mark Klassen⁎,1, Brandon P. Anthony Ecological Economics 162 (2019) 39–48

A fascinating and timely study, this article considers the effects of recreational marijuana legalization on forest management and conservation efforts.  The authors point out that illicit drug crop cultivation has actually been identified as a “major stressor impacting the management of public lands,” as over half of the marijuana plants eradicated in 2008 had been grown on public lands. The environmental impacts of such illegal cultivation has led to removal of native vegetation, diversion of natural waterways, agro-chemical pollution, and littering. Furthermore, safety concerns organized crime syndicates had made it difficult for national forest employees and researchers to pursue management goals. Finally, the US Forest Service had to spend resources on monitoring and enforcement, meaning that they could not devote those same resources to other pursuits. The authors attempted to discover whether the legalization of marijuana had reduced the amount of illegal grow sites, which in turn would reduce both environmental and safety concerns. They conclude that “the legalization of recreational cannabis is significantly correlated with a reduction in the annual number of discovered grow sites in national forests in Oregon, while found insignificant in Washington (47).”