The value of some goods like wilderness today depends on their futures.
Normally, economists imagine, equal experiences become less valuable as they recede further into the future. But some types of goods don’t have that kind of relationship with future experiences. They can become more valuable as they extend farther into to the future. Take this blog post, for example. I’m really happy that you’re reading it …CONTINUE READING
No, climate change isn’t less of a problem if people get used to a devastated world.
People often adjust to problems that seem terrible upfront. Some studies show, for instance, that people who who lose limbs are very unhappy for awhile but then start to adjust to their positions. Some economists argue that something similar may happen with climate change — we might find that we don’t miss extinct animals or …CONTINUE READING
Some interesting recent publications.
It sometimes takes awhile for journals to reach my desk as they circulate among faculty, so this isn’t hot off the presses. But I’ve been looking at some recent issues of JEEM (the Journal of Environmental Economics and Management), and I found a number of very interesting articles. Fully grasping the articles would require a …CONTINUE READING
The empirical evidence suggests that job loss from regulation is small.
It seems to be easy to make arguments one way or another about the effect of regulation on jobs. What does the evidence say? Those seeking an answer would do well to look at a recent book on the subject by Coglianese, Finkel, and Carrigan. Although the book is broader in scope, it provides a careful …CONTINUE READING
Paul Krugman has a NY Times column arguing, from a Keynesian point of view, that Obama’s climate change program won’t cost jobs. One of my posts a couple of years ago suggested the same idea: in a slack economy, regulatory requirements are a form of stimulus that can actually create jobs because industry has to spend …CONTINUE READING
Discount rates are how economists measure the importance of the future versus the present. If the discount rate is low, we care a lot about the future; the reverse is true if the rate is high. It turns out that one of the key factors driving the discount rate — maybe the key factor — is …CONTINUE READING
The head of OIRA – the Office of Information and Regulatory Affairs at OMB– is often called the White House’s regulation czar. OIRA is charged with reviewing the cost-benefit analysis of all major government regulations. This task is all about economics. Yet OIRA has never established the kind of reputation for economics expertise held by …CONTINUE READING
The key to understanding the economics of environmental protection is the concept of externalities. An externality is simply a cost that one person or firm imposes on another. In general, an externality means that an activity is causing more harm than it should. Of course, a company or individual could decide to voluntarily correct the …CONTINUE READING
Environmentalists should rethink their view of environmental economics, for both intellectual and practical reasons.CONTINUE READING
Much of the effort to rollback current EPA regulations focuses on coal-fired electrical power plants. An article in the August issues of the American Economic Review sheds light on the issues at stake. “Environmental Accounting for Pollution in the United States Economy” is an effort to assess the damages caused by various polluting activities. The …CONTINUE READING